Occidental Petroleum: With a Geopolitical Premium
Longtime CEO Vicki Hollub handed over the reins as scheduled on June 1 to Richard Jackson, previously COO and a longtime company insider. The transition signals continuity. This also applies to debt reduction, which has been a priority since the Anadarko acquisition in 2019. The balance sheet has improved dramatically. Over the past 22 months, the debt level has fallen by a total of USD 15.6 billion to USD 13.3 billion. Of that amount, USD 7.1 billion was repaid by May 2026 alone. Annual interest expenses fell by over USD 830 million. This is a major relief for cash flow.
Oil prices surged by 38% in the second quarter to an average of USD 96.78 per barrel, driven by the Iran crisis. At the same time, realized natural gas prices in the US plummeted to minus USD 1.48 per 1,000 cubic feet, a massive drag on earnings. The agreement in the Middle East caused oil prices to fall back to around USD 70, only to rise sharply again as tensions flared up once more. Analysts remain divided. While Evercore ISI upgraded the stock to “Outperform”, others see significant risks given the earnings per share forecasts, which range from USD 2.22 to USD 10.37.
Based on a conservative assumed realized price of USD 70 per barrel, Occidental could generate free cash flow of about USD 5.1 billion despite the share price decline, supported by lower operating costs and reduced capital intensity. The market capitalization of around USD 53 billion thus appears to be undervalued. The additional potential of CCS technology should not be overlooked in the medium term. However, given the current complex, uncertain situation, it remains a secondary factor for the time being. The picture is quite different when it comes to the capital structure. Berkshire Hathaway owns approximately 26.6% of the common stock. Added to this are preferred shares worth USD 8.3 billion, which pay an 8% dividend and thus continue to exert a clear influence on the group. The share is currently trading at around USD 53.65.
Globex Mining: A Royalty Empire Beyond the Mainstream
The commodities industry thrives on spectacular individual discoveries and clear narratives. Globex Mining has deliberately chosen not to follow this approach. Over nearly four decades, the Canadian company has built a portfolio of over 270 mineral concessions, geographically spread across Quebec, Ontario, Nevada, and other reliable jurisdictions. The minerals are diversified, ranging from gold and iron ore to antimony and other specialty metals. The former explorer has matured into a royalty generator that, through smart acquisitions and partnerships, unlocks value that other market participants simply overlook.
Annual revenue from option payments and land sales ranges from CAD 5 to 6 million, with absolutely no dilution for shareholders. The true potential lies in future royalty payments, which are expected to be unlocked as project development progresses. More than 300,000 m of drilling is currently planned by external partners within the portfolio. The latest results from the Bald Hill antimony project underscore the company’s operational momentum. Grades of over 16% antimony over 5 m, as well as significant gold grades averaging 1.14 g/t over 2.56 m within the antimony zone, are impressive.
Cerrado Gold’s decision to optimize the feasibility study for Mont Sorcier could lead to a delay, but the prospect of annual royalty payments of CAD 7–10 million remains intact. President & COO David Christie, himself an experienced geologist, views Globex as a complex portfolio of assets. This holistic perspective explains the deliberate management of the various components and the discipline to avoid entering into costly takeover battles despite favourable market conditions. A balance sheet with over CAD 40 million in cash and no debt provides operational independence. The share is currently trading at around CAD 1.82.
MP Materials: Record Production and Geopolitical Turmoil
China’s decision to place MP Materials on its export control list has ruthlessly exposed the company’s strategic vulnerability. China remains a critical factor for MP Materials because the company continues to depend on Chinese supply chains for parts of its value chain and access to raw materials. It is precisely this dependence that makes MP Materials a key component of an independent supply chain for Washington. Government support is thus both a blessing and a curse. It secures long-term sales guarantees but increases the company’s political vulnerability. For investors, the question is whether the growing geopolitical risk premium can be offset by operational progress.
The latest quarterly figures impressively demonstrate that the company’s core business is gaining momentum. NdPr production and sales rose significantly, and the Magnetics segment is making significant contributions for the first time. General Motors serves as the anchor customer here. At the same time, MP is pushing ahead with the expansion of the 10X facility in Texas, which is intended to increase magnet capacity tenfold. The Department of Defence is providing support in the form of capital, loans, and price guarantees, which increases planning certainty. However, the ramp-up remains cost-intensive and time-sensitive, especially since China is now blocking access to specialized machinery.
The downside of this expansion is reflected in the balance sheet. MP has been posting operating losses for 11 consecutive quarters, and ramp-up costs are soaring. Added to this is a high concentration of customers, which concentrates business risk. The valuation assumes margins of over 50% that lie far in the future, while timelines for GM’s approval and the ramp-up of the new plants remain uncertain. Anyone investing here is betting not only on technological implementation but also on political stability in an increasingly fragile environment. The share is currently trading at around USD 45.46.
Simply betting on commodity prices is no longer enough. Investors now need to understand far more complex market dynamics. Occidental Petroleum benefits from geopolitical risk premiums and robust cash flow, but remains highly exposed to volatile oil prices. Globex Mining, by contrast, stands out as a debt-free royalty holder with a broadly diversified portfolio of mineral assets being advanced by external partners. MP Materials is driving the development of an independent US rare earths supply chain, but continues to grapple with substantial start-up losses and Chinese export restrictions.
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