10 Best Mineral Stocks to Buy Right Now

6. Peabody Energy Corporation (NYSE:BTU)

Number of Hedge Fund Holders: 28

Supplying thermal and metallurgical coal to power plants, industries, and steelmakers, Peabody Energy Corporation (NYSE:BTU), ranks as one of the top coal producers globally.  Along with mining, the company provides coal marketing, brokerage, and transportation services. Its operations span across the United States and Australia. The company has been focusing on expanding metallurgical coal production, which is crucial in steel manufacturing.

Owing to this transitional phase, Peabody Energy Corporation (NYSE:BTU)’s financial performance suffered in the year ended December 31, 2024. Revenue declined from $4.94 billion in 2023 to $4.24 billion. Net income saw the largest downturn as it dropped from $759.6 million to $370.9 million in 2024. However, these declines are temporary due to the capital-intensive nature of metallurgical coal production and a longer ramp-up period compared to thermal coal.

Although this transitional phase poses short-term challenges, it is expected to help the company achieve higher margins in the long term. The Centurion Mine in Queensland’s Bowen Basin is expected to produce 4.7 million tons annually. Peabody Energy Corporation’s (NYSE:BTU) acquisition of Tier 1 coal mines from Anglo American will further solidify its position in the industry. By 2025, Peabody expects metallurgical coal production to reach 8.5 million tons, with major contributions from Centurion and Shoal Creek.

Even with promising future production values, the company will be facing external pressures. These mainly stem from the 15% tariffs imposed by China on United States coal exports. These tariffs might impact sales of Peabody Energy Corporation (NYSE:BTU) in the short term. However, market adjustments are expected to mitigate these impacts in the long term by redirecting coal exports from the United States to regions like India and Europe.