Iron ore price rout diverts $ 160 billion from major mining stocks


The third quarter sell-off put the Big 3 in negative territory for the year, and Fortescue’s efforts to diversify its portfolio cannot come soon enough – the world’s number four steel commodity was the quarter’s worst, with a 39% decline.

Among the major declines, Fortescue is closely followed by Vale, which, beyond its iron ore problems, faces a fire at its flagship copper mine and suspends operations at its nickel mine in Brazil in a dispute over his license.

As the iron ore market shrinks, Brazil’s CSN Mineração, one of the largest mining IPOs since Glencore in 2011, when it debuted in the first quarter, is breaking out of the top 50, but Thanks to still robust US steel prices, Cleveland-Cliffs seems secure in the top 50 so far after spending years in the wild.

Under pressure

With no exposure to iron ore other than trade, Glencore turned the tide in the third quarter and the Swiss commodities giant is up almost half since the start of the year. Glencore has not given up on coal mining, as its peers and its coal, gas and oil trading arm benefit from extremely high energy prices.

Proof of the volatility of commodity markets is the spectacular performance of coal miners during the quarter; a sector which at the same time last year seemed on the verge of disappearing completely from the ranking.

The value of the three remaining coal companies (the ranking excludes electric utilities such as Shenhua Energy which operate their own mines) surged and Coal India eventually halted its decline, jumping nine positions to place number 25. It Four years ago, the world’s largest coal miner made it to number 4.

Nuclear option

Iron ore price rout diverts $ 160 billion from major mining stocks

Thanks to a surge in nuclear fuel a decade in preparation since the Fukushima disaster, uranium stocks are reaching the top 50 for the first time in many years.

The value of Kazatomprom of Kazakhstan, which has extended its stock quotes well beyond Almaty, has more than doubled this year, while Cameco entered 47th place after being 60th late last year.

Last month, Saskatoon-based Cameco signed a memorandum of understanding for what the Uranium Bulls hope will be the first of many supply deals for a potential fleet of small modular reactors (SMRs). SMRs are seen as a potential replacement for diesel in mines and communities in remote areas.

Lithium raised

Lithium prices have extended their one-year hike as electric cars demand motors and the three top 50 producers now have a collective value of nearly $ 64 billion after adding $ 16.5 billion to the during the quarter.

Tianqi Lithium briefly dropped out of the rankings in late 2019 as its market value fell below $ 5 billion, but the Shenzhen-listed producer has now broken through the top 20, surpassing SQM, with a value of over $ 23 billion. .

Iron ore price rout diverts $ 160 billion from major mining stocks

The world’s largest producer Albemarle, up 50% since the start of the year, announced last week that it was purchasing a Chinese lithium processor with the aim of expanding downstream.

Rare rally

The top performer for the quarter is also benefiting from rising demand for electric vehicles, and the world’s leading producer of rare earths (as a by-product of iron ore) China Northern Rare Earth has doubled in value in the three months of this year. ending in September.

So far this year, the Shanghai-listed company is up 230% and now sits in 16th place, down from 48th at the end of 2019. China, responsible for nearly four-fifths of global rare earth production , would further consolidate its domestic industry into just two companies – one in southern China to oversee medium to heavy rare earths, and the other in the north which will control light rare earth mining.

Click on the image for the full size table:

Iron ore price rout diverts $ 160 billion from major mining stocks

*REMARKS:

Source: MINING.COM, Miningintelligence, Morningstar, GoogleFinance, corporate reports. Main exchange trading data, if applicable, at the close of September 30, currency cross rates on October 1, 2021.

Percentage change based on the difference in market cap in USD, not 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.

The levels of operational or strategic involvement and the size of the shareholder were other central considerations. Are streaming and royalty companies that receive metals from non-shareholder mining operations eligible or are they just specialized funding vehicles? We have included Franco Nevada, Royal Gold and Wheaton Precious Metals.

Vertically integrated companies like Alcoa and energy companies like Shenhua Energy, where electricity, ports and railways account for a large chunk of revenue, are a problem, as are diversified companies like Anglo American with majority-owned subsidiaries. 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 for the sake of balance and diversity, we have excluded the steel industry, and with so many companies that have substantial mining assets , including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many more. .

Headquarters refers to operational headquarters where applicable, eg 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.

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