How I invest and make money from ASX mining shares

I like investing in ASX mining shares, but only at particular times.

A mining worker clenches his fists celebrating success at sunset in the mine.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The mining sector is a fascinating industry full of compelling companies. I think it's possible to invest in ASX mining shares and make good money. But I'm using a particular investment method to do it.

There are many different mining companies on the stock market, including those producing iron ore, lithium and gold, to name just a few.

Some of the ASX's best-known companies are miners, such as BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO), Fortescue Ltd (ASX: FMG), Pilbara Minerals Ltd (ASX: PLS), Northern Star Resources Ltd (ASX: NST) and Newmont Corporation (ASX: NEM).

However, bear in mind that the share prices of mining companies can be highly volatile, particularly when commodity prices move around quite substantially.

Volatility can create an opportunity

When the whole ASX share market drops during a bear market, there are loads of opportunities to find oversold stocks.

Sometimes ASX mining shares can go through a painful decline, even when the overall market is stable.

No one can forecast with certainty when a commodity price will fall, which is why the profit and share prices of mining companies can be so unpredictable.

The investment advice of "buy low, sell high" is essentially how I approach my investments in ASX mining shares.

I buy when the market sentiment is weak, and the outlook is worrying. I haven't sold any of my resource shares yet, but if I were looking to sell, I'd endeavour to do it when the commodity price is relatively strong.

The types of investments I like

For example, I've invested in Fortescue shares quite a few times when the iron ore price was below US$100 per tonne, and there were worries about the Chinese real estate and construction sector. Buying at that low level unlocked a large dividend yield, and I'm (currently) sitting on good capital gains.

Just over a year ago, when copper prices were weaker, I was looking at Sandfire Resources Ltd (ASX: SFR) as a clear opportunity because of its heavy share price decline (at the time) and exposure to the long-term decarbonisation tailwind.

I've been wrong plenty of times about ASX mining shares, and I may end up being wrong about my investment in Pilbara Minerals.

But, it seems to me that if investors can be brave and choose good miners at a time when the outlook for the commodity price is weak for the foreseeable future, that may be the most opportunistic time to buy.

I'm most optimistic about copper miners because of the decarbonisation tailwind.

I'd be interested in BHP and Rio Tinto because of their growing copper exposure, but iron ore prices remain high, so I am willing to be patient.

Lynas Rare Earths Ltd (ASX: LYC) is an interesting one to me because of its share price decline, but its commodities are still integral to the global economy.

ASX lithium shares are a mixed bag. The lithium price has sunk, yet lithium demand is expected to keep rising. I chose Pilbara Minerals in the sector because it's already producing lithium, it has big plans for growth, and its balance sheet is strong.

I believe volatility can be our friend as long as we're willing to be brave to buy and don't get too greedy when it comes to selling at a certain price.

Should you invest $1,000 in Cogstate Limited right now?

Before you buy Cogstate Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Cogstate Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has positions in Fortescue and Pilbara Minerals. 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.

More on Resources Shares

Miner looking at a tablet.
Resources Shares

Mineral Resources share price slides despite significant reserves growth

An 89% resources upgrade hasn’t boosted Mineral Resources shares today.

Read more »

Copal miner standing in front of coal.
Resources Shares

How much upside does Macquarie tip for New Hope shares?

A softer-than-expected quarter has impacted the broker's view.

Read more »

2 people at mining site, bhp share price, mining shares
Resources Shares

Rio Tinto share price pushes higher on $1.4 billion lithium agreement

Rio Tinto shares are gaining major lithium exposure.

Read more »

Miner looking at a tablet.
Resources Shares

Up 73% since April, why Mineral Resources shares could keep charging higher

A leading expert says that Mineral Resources shares remain ‘heavily undervalued’. But why?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »

Miner looking at a tablet.
Resources Shares

What's the latest broker ratings on BHP shares?

There's an air of caution floating about BHP shares even with bullish ratings.

Read more »

A young African mine worker is standing with a smile in front of a large haul dump truck wearing his personal protective wear.
Resources Shares

BHP shares last traded at $50 in 2023. When will they get back there?

Let’s dig into the potential for BHP shares to rise.

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 21% on 'exceptional' results

Investors are sending the ASX All Ords stock flying higher on Wednesday. But why?

Read more »