As with most rankings, the 13th annual study by PwC of the world’s 40 biggest miners elicited a lot of discussion. Following on this debate MINING.com asked our sister organization IntelligenceMine to compile a new list and to update the rankings to take into account the big swings in market valuations and commodity prices this year.
Updating the market capitalization was the easy bit. Deciding the criteria of which companies to include was more challenging. The biggest question we had to answer to build our list was how deep must the involvement in the industry be before an enterprise can rightfully be called a mining company.
For instance, should smelter companies or commodity traders that own minority stakes in mining assets be included, especially if these investments have no operational component or not even warrant a seat on the board? This is a common structure in Asia and excluding these types of companies would remove well-known names like Sumitomo and Mitsui, but on the other hand include Korea Zinc which only has a single mine.
Levels of operational involvement and size of shareholding was another central consideration. Do streaming and royalty companies that receive metals from mining operations without shareholding qualify or is are they just specialized financing vehicles? We included Franco Nevada and Silver Wheaton, but not Johnson Matthey for instance.
What about diversified companies such as BHP Billiton, Freeport-McMoRan or Teck with substantial oil and gas assets? Or oil sands companies that use conventional mining methods to extract bitumen for that matter? Or vertically integrated concerns like Alcoa and number three on the list Shenhua Energy which is a power and shipping company more than a coal miner. As another examples should FMC Corp not be ranked because its potash and lithium operations are such a small part of its overall revenues?
Many steelmakers own and often operate iron ore and other metal mines, but in the interest of balance and diversity we excluded the steel industry, and with that many companies that have substantial mining assets including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others.
The list of course excludes private and state-owned companies and those include marquee names like Codelco, Trafigura, Kazatomprom and OCP. Investment holding companies, listed private equity or asset management companies are not on the list either.
With this ranking IntelligenceMine cast the net relatively widely which also meant well-known companies which are closely associated with mining did not make the cut. The likes of Antofagasta, SQM, Kinross, Cameco, KGHM, Nyrstar and many others are bubbling under.
The ranking includes the market capitalizations of globally listed public companies converted into USD. The combined market capitalization is just shy of $700 billion.
Let us know of any omissions, deletions or additions to the ranking or suggest a different methodology.
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