At the end of Q1 2022, the MINING.COM TOP 50 ranking of the
world’s biggest miners hit an all-time record of a collective USD 1.75 trillion
as copper spent time above USD 10,000 a tonne, real nickel trades were being
made above USD 40,000, lithium shipped for over USD 60,000 and everything from
gold and platinum to uranium and tin were rallying hard.
Uranium prices have doubled since then to above USD 60 a
pound, tin is also trading higher, although well below its March 2022 peak
while gold’s recent safe haven rally means the precious metal is also trading
higher compared to March 2021.
Iron ore, where the top diversified mining companies dig for
most of their profits, has also held up remarkably well, trading at USD 120 a
tonne this week, little changed from end-June.
Base and battery metals however have entered a deep slump
since those heady days. Copper, zinc and aluminium are firmly in bear market
territory down by a fifth or more, nickel and palladium investors are nursing
40%+ losses, cobalt is nearing record lows and lithium prices are hovering
above USD 20,000.
After defying weakness on metals markets due to high
expectations of strong future demand, particularly for copper, lithium and
nickel, mining stock valuations have now succumbed.
At the end Q3 2023, mining valuations for the industry’s top
tier have slumped a total of USD 516 billion since the all-time highs. Declines
so far this year total USD 145 billion for a combined market value of USD 1.38
trillion – back to levels seen at the end of September 2021.
Just how bad sentiment is across the board is evident from
the best performer list for Q3, which includes for the first time three
counters which lost ground over the period.
Archipelago ascent
The first Indonesian company to make it into MINING.COM’s
ranking of world’s 50 most valuable mining companies, Amman Minerals
Internasional, has surged 213% in US dollar terms since its July debut in
Jakarta to reach a market capitalisation just shy of 450 trillion rupiah, or
more than USD 28 billion.
Amman Minerals is the owner and operator of the giant Batu
Hijau copper and gold mine in production since the turn of the millennium and
is developing the adjacent Elang project on the island of Sumbawa.
Elang is one of the world’s largest undeveloped copper and
gold porphyry deposits and is currently in the feasibility stage. Elang boasts
4.7 million tonnes of proven and probable copper reserves and over 15 million
ounces of gold.
Indonesian copper-gold company storms ranking of world’s 50
most valuable mining stocks
Indonesia has become a red-hot IPO market this year and
Amman was the largest of the year so far raising more than USD 700m in its IPO,
and now sits at number 11 on the ranking.
Bloomberg reports Amman Minerals’ ascent has minted at least
six new billionaires, including chairman Agus Projosasmito, whose stake in the
company is now worth USD 2.7 billion. The miner’s spectacular market
performance has also added USD 4 billion to the net worth of Anthoni Salim, who
helms one of Indonesia’s largest conglomerates, taking the tycoon’s paper
billions to within shouting distance of double digits.
Indonesia’s other major mining IPO, Harita Nickel, is on a
different trajectory altogether. Listed on the Indonesian Stock Exchange in
April raising USD 672m, the company has had a tough go of it and the stock has
shed more than 60% since then as nickel prices continue to decline.
Lithium losses
The strength of the lithium sector outside China had been remarkable
given the precipitous decline in prices for the battery metal since hitting all
time highs above USD 80,000 a tonne in November last year.
But during Q3 the slump in prices of the battery raw
material caught up with the six stocks represented in the Top 50, for a
combined loss of over USD 30 billion in market cap over the three month period
to just over USD 70 billion.
Indonesian copper-gold company storms ranking of world’s 50
most valuable mining stocks
Measured from their 52-week highs the correction in the
sector has been brutal – Perth-based Pilbara Mineral has bled 31% in market
cap, making it the best performer. Mineral Resources has given up 37% while the
declines for Albemarle, SQM, Ganfeng and Tianqi have been over 50%.
Pilbara Minerals, which unlike its peers is clinging onto
year-to-date gains, joined the Top 50
last quarter and brought the number of companies based in the Western Australia
capital to five, surpassing the tally of Vancouver, British Columbia as the top
home base in the ranking.
The chances of another Perth-based lithium miner, IGO, of
entering the Top 50 has dimmed. With a market cap of USD 5.4 billion, the
company is down to the mid-60s in the ranking.
The merger of US-based Livent and Australia-Argentina
lithium miner Allkem, expected to close before 2023 is out, may also not be
enough for the combined firm to enter the Top 50. Together the two companies
are now worth USD 7.4 billion, which would edge out AngloGold Ashanti for the
last spot, but the fortunes of lithium and gold going into 2024 are diverging
widely.
The blocking tactics of Gina Rhinehart’s Hancock Prospecting
against the takeover of Liontown Resources by Albemarle turned out to be
successful with the US lithium giant deciding to walk away from the deal this
week.
Liontown’s 127% surge this year afforded the Perth-based
company a market value of USD 4 billion before the collapse of the takeover
which halted trading in the stock. Liontown on Thursday said it has secured the
necessary funding to bring its Kathleen Valley project into production.
Enriched uranium
In September, uranium scaled USD 60 per pound for the first
time since 2011. The breakthrough for the nuclear fuel comes after a decade in
the doldrums following the Fukushima disaster in Japan.
The World Nuclear Association predicts world reactor
requirements for uranium to surge to almost 130,000 tonnes (~285 million
pounds) in 2040. That’s up from an estimate of 65,650 tonnes in 2023.
A significant portion of the WNA’s upward growth adjustments
can be attributed to the accelerated adoption of Small Modular Reactors (SMRs)
as part of decarbonisation efforts for a range of industries from shipping to
data centres with powering remote mine sites near the top of the list for SMR
potential.
Canada’s Cameco makes the best performer list over the three
months again in Q3 after spending much of the post-Fukushima period in the
wilderness. The Saskatoon-based company enters the top 30 for the first time
after jumping 19 places so far this year.
The value of shares in Kazatomprom, the world number one
uranium producer, topped USD 10 billion at the end of Q3 placing it at position
36. Until this year the state-owned Kazakh company was outside earshot of the
Top 50 since its dual-listing in London and Astana in 2018.
Diversified drop
BHP’s market position has also been supported by uranium
prices as the Melbourne-based company boosts output at its Olympic Dam
operations.
The world’s top mining company’s market value has declined
by less than 8% year to date for a USD 142 valuation, outperforming other
diversified heavyweights Rio Tinto, down 17%, Glencore (–21%), Vale (–25%) and
Anglo American (–38%).
London-listed Anglo American has had a rough year in part
due to its exposure to platinum group metals and control of Anglo American
Platinum, and is now valued at USD 32 billion after peaking at USD 70 billion
in March 2021.
Investors in Anglo, with a history going back more than a
hundred years on the South African gold and diamond fields, have had a particularly
wild ride over the last few years. In January 2016, Anglo’s market cap fell
below USD 5 billion after it came close to suffocating under a pile of
debt.
The dramatic slump in palladium prices (down 38% this year)
and platinum (–16%) have also seen AngloPlat drop to its lowest position ever
at a valuation of USD 10 billion, down from nearly USD 40 billion end-March
2021.
Former PGM high flyers Impala Platinum and Sibanye
Stillwater, both valued around the USD 4 billion mark today, have lost sight of
the Top 50 altogether.
Indonesian copper-gold company storms ranking of world’s 50
most valuable mining stocks
Image source: Amman Minerals
