In the first quarter of 2022, the MINING.COM TOP 50 ranking of the world’s largest mining companies reached a new high of $1.75 trillion. This was fueled by soaring copper prices, with nickel, lithium, gold, platinum, uranium, and tin experiencing significant rallies as well. However, base and battery metals have since entered a slump, with copper, zinc, aluminum, nickel, palladium, cobalt, and lithium prices all seeing substantial declines.
Despite defying weakness in the metals market, mining stock valuations have started to decline. In fact, by the end of Q3 2023, the industry’s top-tier mining companies saw a total decline of $516 billion in valuations since reaching their all-time highs. The combined market value at the end of Q3 was $1.38 trillion, returning to levels last seen in September 2021.
Amman Minerals Internasional, the first Indonesian company to make it into MINING.COM’s ranking of the world’s 50 most valuable mining companies, has experienced a remarkable surge in market capitalization. Since its July debut in Jakarta, the company’s value has grown by 213% in US dollar terms, reaching nearly 450 trillion rupiah (over $28 billion).
Amman Minerals is the owner and operator of the Batu Hijau copper and gold mine, one of the world’s largest. The company is also developing the adjacent Elang project, which boasts significant reserves of copper and gold. With 4.7 million tonnes of proven and probable copper reserves and over 15 million ounces of gold, Elang has the potential to be a substantial asset for Amman Minerals.
This IPO success story reflects the red-hot market in Indonesia, with a surge of new billionaires created. Amman Chairman Agus Projosasmito’s stake in the company is now worth $2.7 billion, while Anthoni Salim, the head of one of Indonesia’s largest conglomerates, has seen his net worth increase by $4 billion thanks to the miner’s spectacular market performance.
The strength of the lithium sector outside of China has been remarkable, considering the significant decline in prices for the battery metal. However, during Q3, the slump in lithium prices caught up with the six stocks represented in the Top 50, resulting in a combined loss of over $30 billion in market capitalization over the three-month period.
Pilbara Minerals, one of the best-performing lithium companies, is clinging onto year-to-date gains but has still lost 31% in market capitalization. Mineral Resources and other major lithium players, including Albemarle, SQM, Ganfeng, and Tianqi, have all suffered market cap declines of over 50%. This correction reflects the diverging fortunes of lithium and gold going into 2024.
Uranium prices reached $60 per pound in September 2023, the highest level since 2011. This comes after a ten-year slump following the Fukushima disaster in Japan. The World Nuclear Association predicts a surge in uranium demand, driven by the accelerated adoption of Small Modular Reactors (SMRs) as part of global decarbonization efforts.
Canada’s Cameco, a major uranium producer, has seen its market value increase, entering the Top 30 for the first time after jumping 19 places this year. Kazatomprom, the world’s largest uranium producer, has also experienced significant growth, reaching a valuation of $10 billion at the end of Q3.
BHP, the world’s top mining company, has been supported by the increase in uranium prices. Its market value has only declined by less than 8% year-to-date, outperforming other diversified heavyweights like Rio Tinto, Glencore, Vale, and Anglo American. However, Anglo American has faced a challenging year due to exposure to platinum group metals, resulting in a valuation drop from $70 billion in March 2021 to $32 billion.
It’s worth noting that some companies, such as Impala Platinum and Sibanye Stillwater, have fallen out of the Top 50, demonstrating the volatility of the mining industry.
As the mining market continues to evolve, the performances of different commodities and mining companies will be closely watched. It remains to be seen how the Indonesian mining sector, lithium market, uranium industry, and diversified mining companies will fare in the coming years.