Another way to gain exposure to the mining sector is by investing in companies that provide services such as engineering, construction, and site services to miners and explorers. Bell Potter believes there's money to be made by investing in three of these firms.
The analyst team at Bell Potter has said in its end-of-year wrap-up to clients that iron ore and gold production is set to rise over the next three years, "benefiting services companies leveraged to mining volumes".
They went on to say:
In exploration markets, the cycle has clearly demonstrated an inflection, with exploration facing companies reporting increased activity and demand for their services. Junior equity raisings have recently trended above the 2021 and 2011 peaks; as a leading indicator, we expect junior exploration activity to lift meaningfully over CY26.
The analyst team says while East Coast infrastructure looks "patchy" going forward, key sub-sectors such as energy generation, storage, transmission, and water utilities are looking good.
The rapidly expanding data centre sector would also provide tailwinds for companies in the infrastructure game.
So who do they like in the sector?
Develop Global Ltd (ASX: DVP)
This company is a bit different to a straight mining services company, given it is an underground mining contractor as well as the operator of two mining projects – the Woodlawn Zinc-Copper Mine in New South Wales and the Sulphur Springs Zinc-Copper Project in Western Australia.
The company also just last week announced it had won a $200 million contract at OceanaGold's Waihi North Project in the North Island of New Zealand.
Bell Potter said in its note to clients that the company is expected to ramp up to commercial production at Woodlawn in the March quarter of 2026, "representing a major re-rate catalyst''.
Bell Potter has a $5.20 price target on Develop Global shares, compared with the price of $4.36 currently.
IPD Group Ltd (ASX: IPG)
IPD, the Bell Potter team said, delivered better than expected first-half guidance at its recent annual general meeting, and was well-leveraged to the strong spend around data centres and infrastructure.
They said IPD had a "current strong order book and pipeline opportunities", and strong free cash flow over the next two financial years "should support de-leveraging and balance sheet flexibility to target multiple accretive bolt-on acquisitions''.
Bell Potter has a $5 price target on IPD shares compared with $4.07 currently.
Duratec Ltd (ASX: DUR)
This company wins a high level of repeat business in the Western Australian engineering field, due to its reputation and quality of completed projects, Bell Potter said.
Its track record of growth is aided by bringing specialist contractors into the group, adding new customers and markets. The FY25 results saw growth in energy and emerging sectors, with revenue up by 77% to $82.5m and 175.5% to $60.6m respectively, nearly all delivered organically.
The company also has exposure to the defence sector, which should benefit from the AUKUS work to begin soon.
Bell Potter has a $1.90 price target on Duratec shares compared with $1.79 currently.
