Barclays has named Epiroc and Sandvik as the mining equipment companies best positioned to benefit from what its analysts describe as a gold-led spending cycle, rather than a broad-based commodity super cycle. Analysts led by Vlad Sergievskii emphasize that the current environment is concentrated around gold-related investment rather than simultaneous spending increases across multiple commodities.
The bank projects global mining capital expenditure - capex - will increase by 8% this year, the fastest annual rise in three years. However, Barclays says those gains are concentrated almost entirely in gold-related projects. Specifically, the bank expects gold capex to climb 23% in 2026, reaching a level not seen since 2012, while spending on industrial metals is forecast to grow by just 3%.
Barclays elaborates on the forces behind that divergence: "With particularly favourable project economics, robust cash flow generation and the fragmented (less disciplined) structure of the industry, we expect gold capex to continue growing in 2027 as well," the analysts write. By contrast, the bank expects lithium capex to decline by a double-digit percentage and projects no growth for bulk commodities. Barclays notes the gap between gold and non-gold capex growth is the widest since 2016.
The analysts highlight additional indicators of a gold-focused upswing. Listed gold producers are guiding for exploration budget increases of more than 30% this year, and unit operating costs are expected to rise by over 15%. Barclays views this combination of higher exploration spending and rising unit costs as characteristic of upcycle behavior that tends to boost utilisation of mining equipment and aftermarket service intensity.
Against that backdrop, Barclays concludes that Epiroc and Sandvik are advantaged: both companies derive roughly 30% to 40% of their revenues from gold, and the bank expects them to achieve double-digit top-line and order growth this year. By contrast, downstream competitors with only about 15% to 18% of revenues tied to gold are forecast to post revenue growth limited to the mid-single digits.
Barclays also assessed several other equipment suppliers. It retained an Underweight rating on Metso, describing the company as "most vulnerable due to greater reliance on large copper greenfields," and noting its exposure to a backlog that includes projects at risk of delay in Pakistan and the Middle East. The analysts additionally flagged Metso's 21 times 2026 price-to-earnings multiple as elevated.
In a different move, Barclays upgraded FLSmidth to Equal Weight from Underweight. The upgrade was driven in part by a roughly 25% share price pullback since mid-February, which the bank says reduced FLSmidth's valuation to approximately 16 times estimated 2027 earnings. Barclays also raised its price target on the stock to 490 Danish kroner from 372 kroner, and cited improving free cash flow conversion and a more balanced corporate strategy as reasons for the upgrade.
Clear summary
Barclays prefers Epiroc and Sandvik in the mining-equipment sector because it sees the current capex upswing as driven by gold. The bank forecasts an 8% rise in global mining capex this year, with gold capex climbing steeply into 2026 while other commodities lag. Metso is viewed as vulnerable and remains Underweight, while FLSmidth was upgraded to Equal Weight following a sharp share-price correction and improved fundamentals.
Key points
- Barclays forecasts global mining capex to rise 8% this year, concentrated mostly in gold projects.
- Gold capex is expected to increase 23% in 2026, reaching levels last seen in 2012; industrial metals capex is seen rising about 3%.
- Epiroc and Sandvik - each with roughly 30-40% revenue exposure to gold - are expected to post double-digit revenue and order growth, while peers with 15-18% gold exposure may see only mid-single-digit revenue growth.
Risks and uncertainties
- Concentration risk: The capex uplift is concentrated in gold; a reversal in gold economics would reduce benefits for equipment suppliers and affect mining-related service demand.
- Project and operational risk: Companies reliant on large copper greenfield projects face exposure to delays - Barclays cites backlog risk in Pakistan and the Middle East for some firms.
- Commodity-specific divergence: Expected declines in lithium capex and stagnant bulk commodity spending create uneven demand across the mining equipment sector.