Base Metals

Base metals include nickel, copper, zinc and aluminum. Due to a prosperous global economy and a growing middle class population in major developing countries, prices for base metals have surged. Despite the six year run up in prices for these commodities, the pricing levels is expected to stay high. Demand from the world's most populous countries like China and India are expected to stay strong. In these countries, more people are becoming more urbanized, creating demand for cars and appliances. This in turn creates demand for base metals.

One of the ways investors can profit from these developing countries becoming more industrialized is to invest in well run Canadian exploration and mining companies that produce these base metals. These companies cannot influence the price it gets for its commodities. To create wealth for its shareholders, these Canadian companies must continue to grow their production by adding new reserves and keeping their production costs under control.

Depending on the risk profile of the investor, they can seek higher returns by investing in Canadian exploration companies looking to discover that major minerals deposit. The investment risks for exploration companies are also higher. For those seeking more stable returns, they would invest in the major base metals producers. Good Canadian mining companies tend to have capable management teams, operate in stable countries and manage their costs well.