MAC: Mines and Communities

The world's top mining companies

Published by MAC on 2020-01-08
Source: mining.com (2020-01-03)

Mining.com reports

The points contained in this article (specifically in its Notes) expose some of the complex methods - often with financial manipulations and attempts at "mining re-definition" - that typify an industry that's lost the direction in which it thought it was heading before the 2008 fiscal disintegration.

 

Top 50 biggest mining companies

Frik Els

mining.com

3 January 2020

MINING.COM’s ranking of the world’s 50 largest mining companies based on market value show a revived industry entering the 2020s but with diverging fortunes for certain subsectors.

At the end of the 2019, the MINING.COM TOP 50 had a combined worth within shouting distance of $1 trillion after adding more than $150 billion in market capitalization over the course of the year.

The top 7 now make up more than half the value of the sector’s top tier as Swiss giant Glencore’s $10 billion annual drop in market cap is more than offset by the gains for the biggest benefactors of palladium’s record run – Norilsk and Anglo American.

Also boosted by nickel’s rally, the Russian company added a remarkable $15 billion on the Moscow exchange last year to become the fourth most valuable miner in the world.

Anglo’s turnaround over the past three years is astounding, going from less than $5 billion in January 2016 to over $40 billion at the end of last year, boosted not only by its stake in AngloPlat but also by iron ore’s resurgence through an interest in South Africa’s Kumba. Iron ore pure play Fortescue Metals was the year’s best performer, jumping 155%, just beating the world’s largest platinum miner.

Unsurprisingly gold producers had a good year and the precious metals miners and streaming companies in the ranking added a collective $58 billion in worth last year even when excluding soaring AngloPlat.

Lithium producers have struggled amid the battery metals rout with Chile’s SQM the biggest loser in percentage terms and only outdone by Glencore in dollar terms. If not for a late surge in Shenzen, Tianqi lithium would have dropped out of the Top 50 altogether while Livent, FMC’s lithium spin-off sits outside the top 80.

China Molybdenum’s exposure to cobalt hasn’t helped its shares either and despite a solid performance in 2019, the stock could only manage position 28 in the ranking after peaking at no 10 in 2017.

Another Asian company experiencing a reversal of fortune is India’s Vedanta which ranked as high as no 12, but thanks to zinc’s woes lost another 22% in value last year.

If gold’s rally continues a bunch of gold miners could enter the MINING.COM TOP 50 including B2Gold at no 52 worth just over $4 billion at the end of last year, Zhaojin Mining (no 54), Yamana Gold (no 53) Detour Gold (no 56).

Other companies that could join or rejoin the ranking include Canada’s Cameco, the world’s number one public uranium miner which sits at no 55 with a market value of $3.5 billion, Peru’s Buenaventura ($4.1 billion) and Ivanhoe Mines, a platinum and copper explorer which rose 80% in value over the past year and is now worth $3.3 billion.

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Notes:

As with any ranking, criteria for inclusion is a contentious issue. We decided to exclude unlisted and state-owned enterprises at the outset due to a lack of information. That of course excludes giants like Chile’s Codelco, Uzbekistan’s Navoi Mining which owns the world’s largest gold mine, Eurochem, a major potash firm, trader Trafigura, top uranium producer Kazatomprom and numerous entities in China and developing countries around the world.

Another central criterion was the depth of involvement in the industry before an enterprise can rightfully be called a mining company.

For instance, should smelter companies or commodity traders that own minority stakes in mining assets be included, especially if these investments have no operational component or not even warrant a seat on the board?

This is a common structure in Asia and excluding these types of companies removed well-known names like Japan’s Marubeni and Mitsui, Korea Zinc and Chile’s Copec. Levels of operational involvement and size of shareholding was another central consideration. Do streaming and royalty companies that receive metals from mining operations without shareholding qualify or are they just specialized financing vehicles? We included Franco Nevada, Royal Gold and Wheaton Precious Metals.

What about diversified companies such as BHP Billiton or Teck with substantial oil and gas assets? Or oil sands companies that use conventional mining methods to extract bitumen for that matter? Vertically integrated concerns like Alcoa and energy companies such as Shenhua Energy where power, ports and railways make up a large portion of revenues pose a problem as does diversified companies such as Anglo American with separately listed majority owned subsidiaries. We’ve included Angloplat in the ranking as well as Kumba Iron Ore.

Chemical companies are also problematic – should Albemarle not be ranked because its potash and lithium operations are such a small part of its overall revenues? The same issue applied to FMC before it spun off its lithium business.

Many steelmakers own and often operate iron ore and other metal mines, but in the interest of balance and diversity we excluded the steel industry, and with that many companies that have substantial mining assets including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others.

Head office refers to operational headquarters wherever applicable, forexample BHP and Rio Tinto is shown as Melbourne, Australia but Antofagasta is the exception that proves the rule. We consider the company’s HQ to be in London where it has been listed since the late 1800s.

Trading data from primary listing exchange and currency cross-rates [are] at the date of publication. Market capitalization calculated at primary exchange where applicable from total share outstanding, not only free floating shares.

 

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