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Let the good
times roll
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@LeonLouw3
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E
ven if the year 2018 has just begun, it seems
to be a much better place to be in for mining
companies than what the past four years
had to offer. Not only is there a renewed interest
in exploration projects around the globe, but
companies are spending a lot more on greenfields
development than what they did since the
unrelenting slump in commodity prices that started
in 2014. The added bonus is that junior mining
companies are looking at entering developing
countries again, specifically South Africa and
Zimbabwe, where political changes improved the
economic climate over the past few months. But
not only juniors are on the prowl: majors have
suddenly found their appetite for exploration again,
and Africa is bound to be a major beneficiary of
more liberal spending strategies. This is mostly
because the new year has also gotten off to a much
better start for the top global mining companies
than what it did in 2017.
According to an interesting article released by
S&P Global Market Intelligence, 21 of the top
25 largest mining companies recorded gains in
valuation during January 2018. Overall, these 25
companies were worth an aggregate USD818.2-
billion at the end of January — a 15.5% increase
compared with January 2017 when the same
companies held a value of USD708.5-billion.
A similar group of companies that held the top
25 positions this time a year ago was worth an
aggregate USD680.83-billion.
Not only do these mining giants’ valuation
make for interesting reading, but there were some
significant changes in the rankings, although the
top five companies remained unchanged compared
with the 2017 year-end. BHP Billiton remained
the world’s most valuable mining company, with
its market value increasing more than 6.8% to
USD24.9-billion. Second largest is Rio Tinto,
followed by Glencore, Vale, and the Southern
Copper Corporation.
A year ago, China Molybdenum and Shaanxi
Coal Industry were both ranked outside the top
25 mining companies, being placed 36th and 43rd,
respectively. However, they entered into the top 25
companies with the help of triple-digit percentage
improvements in market valuation year over year.
Anglo American (15.1%), Coal India (14%),
and South32 (12.6%) were the other companies
with significant increases in market cap since the
end of 2017.
London-listed Anglo American and PJSC
Norilsk Nickel swapped positions at number six
and number seven, as the latter’s market value
only grew 9.7% compared with Anglo’s 15.1%
improvement. Norilsk Nickel recently completed
a reconfiguration programme at the Talnakh
concentrator in Russia, and this increased ore
processing boosted the company’s fourth-quarter
2017 metals output across the board.
Chile-based lithium producer Sociedad Química
y Minera de Chile, Barrick Gold, Franco-Nevada,
and Fresnillo suffered declines in market valuation.
As commodity prices slowly recover, the mining
industry is on the verge of entering an upward
trend, but it is highly unlikely that it will emulate
the super boom of the early 2000s. However, the
optimism is enough to stimulate investment in
exploration and hopefully it leads to an exploration
boom, which will bode well for developing
countries in Africa.
Leon
Editor
APRIL 2018 MINING MIRROR
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