March 14, 2018 / 1:54 PM / a year ago

BUZZ-Goldman says European mining companies are "attractive"

** Goldman Sachs raises its view on European miners to “attractive” from “neutral”, says the sector is on its strongest footing in many years

** The commodity outlook is robust, notes GS, adding that any slowdown in China will be offset by stronger growth in the rest of the world

** Miners have repaired their balance sheets and GS still sees significant FCF available to further lift investor returns

** GS believes that higher inflation and higher capex can be a positive for commodity prices

** It expects production to drop c.2%-5% across various commodities vs. year ago

** “While this might sound bearish, we believe the period of higher commodity prices we see is likely to more than offset any loss in earnings from cost increases/production losses”, says GS

** Adds Anglo American (+2.9%) to conviction list, raising the stock to “buy” on good asset quality, robust balance sheet, attractive FCF generation and improving sentiment towards South Africa

** Has buy ratings on Glencore (also on conviction list), Vedanta, FQM, Lundin, KAZ Minerals and Nyrstar

** Upgrades BHP (+1.5%) and Antofagasta (+3.3%) to “neutral” from “sell”

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