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After a spectacular run, mining stocks are bleeding - and may not stop soon

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Rate hikes have stoked fears of demand destruction and recession.
Rate hikes have stoked fears of demand destruction and recession.
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After an extraordinary run last year, when many of the world's largest mining companies booked record profits and paid record dividends, the commodities cycle has turned, with rising interest rates and inflation stoking fears of further demand destruction.

Some of the world's largest mining stocks have lost ground in the past six months, with the likes of BHP and Anglo American falling 31% and 20% respectively. Most major miners now have a breathtakingly low price to earnings ratio of six and below - indicating that their shares are undervalued relative to the money that they are generating.

While there's certainly blood in the water, it may however be a bit too soon for investors to consider plunging back in.

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