2 ASX companies producing minerals the whole world wants: expert

Stocks for this pair of businesses that dig up the good stuff out of the lucky country have a bright future.

It's ironic how Australia is often happily referred to as "the lucky country".

One reason it is described as such is due to the nation's abundance of natural resources. You can visibly see it on the ASX, where mining companies dominate in numbers and market capitalisation.

But the expression originally comes from intellectual Donald Horne, who was referring to Australia as "the lucky country" as a pejorative term.

Horne's point was that Australia's great wealth and power all came about through pure luck, rather than through any ingenuity of the people, political system or economics.

Regardless, our country is blessed with some treasures that foreigners would absolutely love to get their hands on.

And that means companies that are getting that stuff out of the ground and selling it overseas will do pretty well.

Running with that thematic, BW Equities equity salesperson Tim Bleakley named two ASX shares that investors should buy:

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.

Image source: Getty Images

Rare find for rare earths

Many investors know about Lynas Rare Earths Ltd (ASX: LYC) already, but Bleakley feels it is a ripe buy at the moment.

After all, the share price has dropped in excess of 27% since early April.

"The company delivered a strong fiscal year 2022 result," Bleakley told The Bull.

"We like the company's outlook."

In a time of high geopolitical tensions, Lynas' products are in hot demand. It is one of just a handful of businesses producing rare earths outside of China.

"Lynas has one of the biggest high-grade rare earth deposits in the world," said Bleakley.

"Given the scale of its resource, it has the capacity to increase supplies to meet future demand. Rare earths are a key mineral used in electric vehicles."

Lithium is not the only game in town

While shares for lithium producers have risen phenomenally in recent years, there are also other elements that modern batteries require.

Graphite is one that is used heavily in batteries for electric cars, which is where Syrah Resources Ltd (ASX: SYR) comes in.

"Syrah is the biggest graphite producer listed on the ASX," said Bleakley.

"Graphite is a critical mineral for the transition to electric vehicles, so strong demand should persist for many years. The company's outlook is bright."

The Syrah share price has rocketed more than 48% just in the past month, for good reason.

"Syrah was recently selected for a US Department of Energy grant for up to US$220 million," Bleakley said.

"The grant will support the financing for a potential expansion of the Vidalia active anode material facility in the US state of Louisiana."

Syrah shares are up almost 26% year to date.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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