The top companies in the mining and metals industry have weathered the COVID-19 pandemic storm relatively well. The top 25 companies in metals and mining were worth a cumulative US$908.36 billion on 1 December 2020.
According to the research data analysed and published by Comprar Acciones, the companies had gained an average of 2.7 per cent in market cap month-over-month (MoM) in November 2020 and an impressive 80 per cent year-over-year (YoY).
Top on the list was BHP Group, with a market cap of US$130.27 billion. This figure marked an increase of 12.6 per cent MoM and a decline of 2.5 per cent YoY.
Rio Tinto was second with US$108 billion in market cap, up by 11 per cent MoM and 13.7 per cent YoY.
These were the only two companies on the list with market caps surpassing US$100 billion. Vale SA was a distant third with US74.35 billion, up by 28.8 per cent MoM and 56.1 per cent YoY.
In total, the top three companies on the list had a combined market cap of US$312.62 billion. This was higher than the rest of the top 10 companies combined. The top 4 to top 10 companies had a cumulative value of US$293.3 billion.
Glencore Plc., positioned at number 9 had the highest MoM growth, at 35.9 per cent, pushing it to $37.36 billion. However, it had dropped by 13.1 per cent YoY.
Second to it was Zijin Mining Group at number 12, jumping by 35.6 per cent MoM to US$33.46 billion. It was also the second-highest gainer YoY, having surged an impressive 174.1 per cent since November 2019.
Freeport McMoRan in number 11 was third with an increase of 34.9 per cent MoM to US$33.98 billion. This was the fourth highest gainer YoY, having jumped by 105.8 per cent in the previous 12 months.
On the other hand, Ganfeng Lithium Co. Ltd at 21 per cent had the highest YoY growth at 196.2 per cent. Its market cap was US$15.08 billion, and it went from 47 per cent in November 2019. According to the company’s earnings report on 2 November, the net profit for shareholders in Q3 2020 jumped by 4.2x YoY to 174 million yuan (US$26.65 million).
Combined market cap of top 50 mining companies tops US$1 trillion in Q3 2020
Based on a Mining.com report, the mining industry is on a recovery path from the COVID slump and could be in positive territory during Q4 2020.
Over the three-month period which ended on 30 September 2020, the top 50 companies in the sector added US$80.2 billion in market cap.
For the first time, the combined market cap of these miners topped the US$1 trillion mark following a rally that started in the second half of Q2 2020. At the end of 2019, their collective market cap was US$989.83 billion, rising to US$1.028 trillion at the end of Q3 2020.
Since the height of the pandemic in March and April 2020, the companies have added US$327.56 billion to their collective market cap. Considering that they had a collective loss of US$288.47 billion in Q1 2020, that was a significant improvement.
90 per cent of best performers in mining in Q3 2020 are gold producers
To a great extent, the surge was attributed to rising gold and silver prices. Notably, primary gold producers as well as precious metals royalty companies account for over 33 per cent of the value of the top 50 companies. Since the Q1 2020 economic slump, they have contributed around US$150 billion of the total gains.
Out of the 10 best-performing companies during Q3 2020, nine are gold producers. This comes as no surprise seeing as bullion is considered a hedge against inflation. Despite losing 5.42 per cent in November 2020, Gold bullion was up by 21.4 per cent YoY as of November 30, 2020 according to Sprott.
Freeport McMoRan is a renowned copper giant ranked third on the list of the best performers. Compared to Q1 2020, it had a 131.9 per cent increase in market cap. Thanks to its Grasberg mine, the company also ranks highly on the list of gold producers globally.
Sibanye Stillwater was the second-best performer, with an increase of 136.7 per cent in Q3 2020 compared to Q1 2020.
The best performer was Gold Fields, whose market cap grew by 169.8 per cent during the same period.
According to Mining Technology, Glencore was the largest metals and mining company by revenue in 2019. In spite of a 2.27 per cent revenue decline, it earned US$215.1 billion.
However, Glencore had a difficult H1 2020, becoming the first major player in mining to scrap dividends. Its net debt during the six-month period rose by 12 per cent to US$19.7 billion and it announced that it was booking a US$3.2 billion charge. Its bad run continued into Q3, as it fell out of the top 10 tier, following a drop of US$14.5 billion in market cap. Its decline was compounded by a depreciation of the pound sterling.
About Nica San Juan
Nica is a BA Political Science graduate, startup founder and financial expert. She has an entrepreneurial spirit and started several startups from a young age, eventually becoming fascinated with stocks, cryptocurrencies and the blockchain economy. She specialises in financial tech and her expertise is in writing detailed tutorials and guides on how to invest in stocks and cryptocurrencies.