Australian miners could surf another commodity super-cycle in 2021 as tight supply, inflation, money printing and a tumbling US dollar combine to ramp up commodity prices.

The iron ore spot prices climbed above $US170 a tonne this week, driving a surge in the major miners that pushed the S&P/ASX 200 to a 10-month high on Friday.

The resurgence of metals miners will leave investors flush with dividends in 2021, according to Don Hamson, founder and managing director of Plato Investment Management.

“BHP, Rio and Fortescue are pulling iron ore out of the ground at $US12 or $US14 a tonne, so there’s a pretty good margin there,” he said.

Even after its latest price surge Fortescue should still offer a 10 per cent gross yield, comparable to the big four banks in their heyday, according to Dr Hamson.

This article was published by The Australian Financial Review on January 9, 2021. Click here to read the full article. 


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