Against the backdrop of an overall downturn, MINING.COM's ranking of the world's largest mining companies has been boosted by the new entry of Amman Minerals. Amman Mining, which has created at least six new billionaires since its IPO in July, currently ranks outside the top 10.
At the end of the first quarter of 2022, the combined market capitalization of MINING.COM's 50 largest miners in the world * reached a record high of $1.75 trillion, the price of copper exceeded $10,000 per ton, the actual trading volume of nickel exceeded $40,000, the freight rate of lithium exceeded $60,000, and all commodities from gold and platinum to uranium and tin were rising sharply.
Since then, the price of uranium has doubled to more than $60 a pound, tin is also trading higher, albeit well below its March 2022 peak, and gold's recent safe-haven rally means the precious metal is also trading higher than it was in March 2021.
Iron ore is also doing quite well, trading at $120 a tonne this week, little changed from the end of June. Iron ore is the main source of profits for the top diversified mining companies.
Since those heady days, however, base metals and battery metals have entered a deep downturn. Copper, zinc, and aluminum are firmly in bear market territory, down a fifth or more, investors in nickel and palladium have lost more than 40 percent, cobalt is near record lows, and lithium is hovering above $20,000.
Metals markets have weakened on high expectations of strong future demand, particularly for copper, lithium and nickel, but valuations of mining stocks have now come back down.
As of the end of the third quarter of 2023, the valuations of the industry's top mining companies have declined by a total of $516 billion since their all-time highs. Year-to-date, total market capitalization has fallen by $145 billion, bringing total market capitalization to $1.38 trillion, back to where it was at the end of September 2021.
Just how bad sentiment is illustrated by the list of the best performers in the third quarter, which for the first time includes three stocks that fell in the same period.
Archipelagic rise
As the first Indonesian company to make MINING.COM's list of the world's 50 most valuable mining companies, Amman International Mining has surged 213 percent in US dollar terms since its listing in Jakarta in July, giving it a market value of nearly 450 trillion rupiah, or more than $28 billion.
Amman Mining is the owner and operator of the massive copper-gold mine Batu Hijau, which has been producing since the turn of the century and is currently developing the Elang project on the neighbouring island of Sumbawa.
Yilang is one of the largest undeveloped copper and gold porphyry deposits in the world and is currently in the feasibility stage. Iran has 4.7 million tons of proven and probable copper reserves and more than 15 million ounces of gold.
Indonesia has become a red-hot IPO market this year, with Amman, the largest so far this year, raising more than $700 million in ipos, and currently ranked 11th.
According to Bloomberg, the rise of Amman Mining has created at least six new billionaires, including chairman Agus Prochosasmito, whose stake in the company is now worth $2.7 billion. The miner's stellar market performance has also boosted the net worth of Anthoni Salim, the man at the helm of one of Indonesia's largest conglomerates, by $4bn, and the man on paper is close to double digits.
The IPO of Harita Nickel, Indonesia's other big miner, was a different story. The company listed on the Indonesian stock exchange in April, raising $672 million, but times have not been good and its shares have fallen more than 60 percent since then as nickel prices continue to fall.
Lithium loss
The sector outside China has been performing strongly, given the sharp fall in the price of lithium battery metal since it hit an all-time high above $80,000 a tonne in November.
But in the third quarter, the plunge in battery raw material prices dragged down six of the top 50 stocks, collectively losing more than $30 billion in market value over the three-month period and just over $70 billion.
From a 52-week high, the correction in the sector has been brutal - Perth-based Pilbara Mineral has lost 31 per cent of its market value, making it the top performer. Mineral Resources gave up 37 percent, while Albemarle, SQM, Ganfeng and Tianqi fell more than 50 percent.
Pilbara Minerals broke into the top 50 last quarter, bringing the number of companies based in Western Australia's capital to five, overtaking Vancouver, British Columbia, as the number one headquarters location.
The chances of IGO, another Perth-based lithium miner, breaking into the top 50 have become slim. The company, with a market capitalization of $5.4 billion, fell to around 65th place in the ranking.
The merger of Us-Based Livent and Australian-Argentine lithium miner Allkem is expected to be completed by 2023, but the combined company may not be enough to break into the top 50 either. The two companies, which currently have a combined market cap of $7.4 billion, will edge out AngloGold Ashanti for the last spot, but lithium and gold will have very different fates going into 2024.
Gina Rhinehart's Hancock Prospecting has succeeded in its strategy to thwart Albemarle's takeover of Liontown Resources, with the US lithium giant this week deciding to pull out of the deal.
Lion City shares have surged 127 per cent this year, giving the Perth-based company a market value of $4bn, but the failed takeover led to the suspension of trading in the shares. Lion City said on Thursday it had secured the necessary funding to bring its Catherine Valley project into production.
Enriched uranium
In September, uranium prices rose to $60 a pound for the first time since 2011. After a decade in the doldrums following Japan's Fukushima nuclear disaster, nuclear fuel has made a breakthrough.
The World Nuclear Association predicts that demand for uranium in the world's reactors will surge to nearly 130,000 tons (about 285 million pounds) by 2040. This is up from an estimated 65,650 tonnes in 2023.
A large part of the upward growth adjustment for WNA can be attributed to the accelerated adoption of small modular reactors (SMRS) as part of efforts to decarbonize a range of industries, from shipping to data centers, that power remote mining areas that rank high in SMR potential.
Canada's Cameco, which has been in the wilderness for much of the post-Fukushima period, was again the top three-month performer in the third quarter. The Saskatoon-based company jumped 19 places this year to enter the top 30 for the first time.
Kazatomprom, the world's No. 1 uranium producer, had a stock value of more than $10 billion at the end of the third quarter, ranking 36th. Until this year, the Kazakh state-owned company had not been in the top 50 since its dual listing in London and Astana in 2018.
Diversification decline
BHP's market position is also being supported by uranium prices, with the Melbourne-based company ramping up production at its Olympic Dam project.
The world's largest mining company has lost less than 8 percent of its market value this year to a valuation of $142, outperforming other diversified heavyweights, Examples include Rio Tinto, down 17 per cent, Glencore, down 21 per cent, Vale, down 25 per cent and Anglo American, down 38 per cent.
London-listed Anglo American has had a tough year, partly due to its exposure to platinum group metals and control of Anglo American Platinum, which, after peaking at $70 billion in March 2021, has been struggling to keep up. The current valuation is $32 billion.
Anglo's history in South Africa's gold and diamond sector dates back more than 100 years. Anglo investors have had a particularly wild ride over the past few years. In January 2016, Anglo's market value fell below $5 billion after the company was suffocating under a pile of debt.
Sharp declines in palladium prices (down 38 per cent this year) and platinum prices (down 16 per cent) have also reduced the valuation of the Anglo Platinum sector to a record low of $10bn from nearly $40bn at the end of March 2021.
Former PGM standouts Impala Platinum and Sibanye Stillwater, both currently valued at around $4 billion, fell out of the top 50 altogether.
