Rating: Top 50 mining companies double in value from covid low
Measured from the height of the pandemic in March-April last year, the index added $ 754 billion amid debate over whether the industry is at the start of a supercycle to measure in decades or just a post-pandemic boomlet caused by easy money, which will run its course once the economic stimulus is withdrawn.
Mining, like many sectors of the industrial economy, is growing heavier and the top 10 companies contributed more than 60% of overall value added in the quarter.
That’s not to say the rally wasn’t widespread – at the end of the first quarter of last year, a valuation of just over $ 3 billion secured a company a place in the Top 50. while today, number 50 on the list, Fresnillo, is valued at over $ 8 billion.
Taken from the depths of the pandemic 15 months ago, 38 full companies on the list have doubled in value and just one stock – Shandong Gold – is worth less today.
Even relatively underperforming stocks gained an average of 48% over the period.
Iron ore prices above $ 200 a tonne gave the top a boost, with BHP worth $ 97 billion more than at the end of the first quarter of 2020. Vale and Rio both gained more of $ 70 billion. Fortescue has gone from a $ 20 billion inventory to $ 50 billion and is starting to look secure in its top ten, despite swings in its iron ore expansion plans.
A booming iron ore market also provided one of the largest mining IPOs since Glencore in 2011, with Brazilian CSN Mineração continuing to rise to a $ 10 billion stock. The mining unit of steel giant Companhia Siderúrgica Nacional currently produces around 33 million tonnes of ore per year, but aims to triple that number over the next decade.
U.S. iron ore producer Cleveland-Cliffs continued its meteoric run, entering the top 40 for the first time – the stock is up 92% in 2021 and is worth five times what it was in March of the last year.
Lithium and fertilizer producers have taken the rankings by storm this year as conditions in both sectors continue to improve.
Tanqui Lithium jumped 26 locations in the second quarter and posted the second best semester performance after Cleveland-Cliffs in terms of percentage.
Albemarle was just below a market cap of $ 20 billion at the end of the first half of the year, down from less than $ 7 billion 15 months ago when lithium prices languished.
Israel Chemicals returns to the Top 50 after a long absence, joining Mosaic on the best performing list for the second quarter. As a group, the fertilizer companies are worth $ 55 billion, despite the delisting of potash giant Uralkali.
AngloGold Ashanti and Gold Fields did not cross the semi-annual close, further adding to the exodus of gold producers in 2021. A handful of gold companies, including B2Gold, Yamana, Kinross and streamer Royal Gold, have fallen into the top 50 this year.
The combined value of gold, silver and streaming companies in the rankings now accounts for 16% of the index, down from 26% when gold prices peaked in the third quarter of last year. The sector has lost more than $ 30 billion in value since its peak in Q3 2020.
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Source: MINING.COM, Miningintelligence, Morningstar, GoogleFinance, corporate reports. Main exchange trading data, if applicable, currency cross rates on July 7, 2021.
Percentage change based on the difference in market capitalization in USD, not on the stock price in local currency.
Market capitalization calculated at primary exchange, if any, from total shares outstanding, not just free floats.
As with any ranking, the inclusion criteria are contentious issues. We decided to initially exclude unlisted and state-owned companies due to a lack of information. This, of course, excludes giants like Chilean Codelco, Uzbek Navoi Mining, which owns the world’s largest gold mine, Eurochem, a large potash company, Singapore-based trader Trafigura, and a number entities in China and developing countries around the world.
Another central criterion was the depth of involvement in the industry before a company could legitimately be called a mining company.
For example, should smelters or commodities traders who have minority stakes in mining assets be included, especially if those investments have no operational component or warrant a seat on the board of directors?
This is a common structure in Asia and the exclusion of these types of companies has removed well-known names like the Japanese Marubeni and Mitsui, Korea Zinc and the Chilean Copec.
Another central consideration was the levels of operational or strategic involvement and the size of the shareholder base. Are streaming and royalty companies that receive metals from non-shareholder mining operations eligible, or are they just specialized fundraising vehicles? We have included Franco Nevada, Royal Gold and Wheaton Precious Metals.
Vertically integrated companies such as Alcoa and energy companies such as Shenhua Energy, where electricity, ports and railways account for a large portion of revenue, are problematic, as are diversified companies such as Anglo American with subsidiaries majority owned separately. We have included Angloplat in the ranking as well as Kumba Iron Ore.
Many steelmakers often own and operate mines for iron ore and other metals, but in the interests of balance and diversity, we have excluded the steel industry, and with so many companies that own substantial mining assets, including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others. others.
Headquarters refers to operational headquarters where applicable, for example, BHP and Rio Tinto are listed as Melbourne, Australia, but Antofagasta is the exception that proves the rule. We consider the company’s registered office to be in London, where it has been listed since the late 1800s.
Please report any errors, omissions, deletions or additions to the ranking or suggest a different methodology.