Monday Mining Minutes: Sector has derated relative to the market since the US-Iran MoU

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Monday Mining Minutes: Sector has derated relative to the market since the US-Iran MoU

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20 Jul 2026 00:00:22 ET │ 15 pages

Monday Mining Minutes

Sector has derated relative to the market since the US-Iran MoU

CITI'S TAKE Ephrem Ravi AC

+44-20-7986-2462

MUSINGS – The 1-year forward EV/EBITDA valuation multiple for the sector

has continued to decline since early June 2026. The sector is currently ephrem.ravi@citi.com

trading at a 1-year forward EV/EBITDA multiple of 6.7x, which is Shashi Shekhar, CFA

considerably lower than 7.6x in early June (but higher compared to the long- +91-22-4277-5028

term avg. of c6.4x). The decline followed the US-Iran MoU signed in mid- shashi.shekhar@citi.com

June and the subsequent decline in precious metals/bulks/aluminium

prices. This has also led to sector derating vs. the broader market over the Krishan M Agarwal

same period during which the valuation discount compared to the market +44-020-7986-4092

increased from 47% to 53%. krishan.agarwal@citi.com

Looking beyond 2026, the 2-year forward EV/EBITDA multiple is at even lower levels

of c5.5x, suggesting risks for downward consensus earnings revision for the miners.

Valuation multiples contracted during the 2021–22 commodities rally as the market

struggled to price in duration into elevated sector earnings and was pricing in

earnings normalization. Similarly, the current multiples might reflect earnings likely

settling at lower levels on lower commodity prices.

MINERS — Reporting season for precious miners will kick off on 17 July and we

expect production performance to be sequentially better on lower base (1Q is

generally weaker seasonally). However, production performance could look

somewhat mixed on a YoY basis for these companies. Overall, we expect the