While many companies are able to produce high-quality mineral products at low cost, only a select few have the capabilities and resources to compete on a global level. These companies are listed here. Barrick Gold Corporation, Nornickel, Vale, and BHP Group are just a few of the world’s largest mining firms. We will examine their respective business models, operations, and financial performance to determine whether they are worth investing in.
Barrick Gold Corporation
The Barrick Gold Corporation (NYSE:BGC) is a Canadian mining company that produces and sells gold, copper, and related materials. It conducts business through its Barrick Nevada, Veladero, Pueblo Viejo, Lagunas Norte, Turquoise Ridge, and Acacia segments. Barrick was founded in 1983 by Peter D. Munk and is headquartered in Toronto, Canada.
Barrick had an excellent track record until the late 1990s when it became embroiled in a messy battle over a gold discovery in Borneo. After a small company named Bre-X Minerals announced a discovery in Borneo, Barrick was pressured to develop the property. But the discovery turned out to be a fraudulent one, and the company pulled out. It was the only mining company to pull out of this conflict.
The Barrick Gold Corporation is headquartered in Toronto and operates 26 gold mines around the world. The company is split into four regional business units: Western Canada, Australia, and Nevada. Its vision is to become the best mining company in the world. Although the company has faced controversy over environmental pollution, human rights, and mine safety, it has maintained its commitment to responsible mining. In addition, its operations are geared towards helping local communities prosper.
In 2009, Barrick released an equity offering of $3 billion, which was upped the next day due to market demand. The proceeds of this IPO were used to eliminate gold hedges, which locked in the price of future production. This way, Barrick could sell its stock at the market price. This demonstrates that the company’s strategy is working well. For example, Barrick bought a 23 percent stake in the Valdez Creek region of Alaska, and joined forces with the power company to explore over two dozen sites.
The Russian-based Nornickel is a world-leading producer of refined nickel, copper, platinum, silver, rhodium, iridium, and gold. Its global operations are based in Moscow, and its parent company Norilsk is one of the largest companies in the mining sector. The company is profitable and sustainable throughout the entire mining cycle, and its exemplary governance and social responsibility practices are a model for other mining companies.
While mining companies can be very profitable, investors should also consider the overall industry’s growth potential. Mining companies that generate the most revenue, produce the highest value metals, and contribute the most to national economies are among the best bets for investors. Luckily, Nornickel is a leading player in this sector, and its operations span 13 countries. Last year, it reported an increase in revenues by 31%, thanks in part to a rise in copper prices.
Despite the recent declines, the mining industry is showing signs of recovery. The industry is becoming more fragmented, and half of the world’s gold and nickel supply comes from smaller entities. New players are stepping up and challenging the big incumbents. Recently, Northern Star Resources and Saracen Mineral Holdings combined to create a new player among the top ten gold companies in the world.
Despite being a relatively small player in mining, Nornickel has expanded into the world’s most lucrative sector: copper. The company has a diversified portfolio of minerals and metals, including copper and nickel. Its revenue has increased by 28% in the first quarter of 2020 and is expected to surpass $309 million by 2021. Its CEO is committed to investing in its future growth potential, as a company with the highest potential for profits will continue to grow its share price.
Vale is the best mining company around the globe because it pays out the majority of its income to shareholders. While many institutions have been forced to cut back on their spending due to environmental concerns, Vale has been proactive and repaid shareholders by keeping the dividend structure high. The company is also stretching vertically along its supply chain, so it has more flexibility when it comes to political pressure. Investors are attracted to this dividend structure because it encourages investors to stay longer, and the dividend only applies to shareholders who hold their stock for more than a quarter.
Investing in Vale also gives you a chance to take advantage of the group’s international presence, despite negative political pressures associated with it. As a global mining company, it can play Switzerland with its raw materials, making the company a net income-generating machine when there is a shortage of those materials. Its recent announcement of its plans to develop a mining facility in Indonesia has investors excited about this stock’s prospects.
Vale SA is a multinational mining company headquartered in Brazil that earns the bulk of its earnings from iron ore. Rival mining companies include BHP Group Ltd. and Cliffs Natural Resources Inc., which also operate in the same area. The new venture capital arm of Vale will invest in promising mining startups around the world and hold a five to ten percent stake in them. Once this is complete, Vale will use the money to fund a portfolio of investments.
In addition to mining in Brazil and Argentina, Vale has recently invested in coal projects in South Africa and the United States. The world’s largest mining companies are investing heavily in electrification, as the world is projected to generate 33% of its electricity from renewables by 2024. Consequently, there will be an increasing demand for metals like lithium, cobalt, and copper. Taking advantage of the current energy prices will be beneficial to mining companies worldwide.
The BHP Group is one of the most profitable mining companies in the world. The company began with one iron ore mine in Western Australia, but eventually expanded its production and purchasing power to include other collieries and steelworks. Soon, BHP controlled nearly all of the iron and steel production in Australia. This made it an enormous company with an enormous private fleet. But BHP is also concerned about trade tensions with China.
BHP is the world’s largest mining company, with assets in copper, iron ore, nickel, zinc, potash, and oil. In spite of its vast mining portfolio, BHP is also getting out of the fossil fuel business. The company recently announced plans to sell off its coal business, and it is merging with Woodside Petroleum to become a pure-play mining company. This move will help the company achieve even higher profitability and a 3%+ dividend.
The BHP Group is the world’s largest mining company, with a market value of more than 180 billion dollars. Its products include coal, iron ore, and other mineral commodities. Its operations span more than 50 countries, and it is currently the world’s largest company by market capitalization. The company is well-positioned to capitalize on the rising global demand for copper. Listed below are the top 10 mining companies.
BHP has been making waves around the world for years. In fact, it has even been regarded as the world’s most successful mining company. Founded in 1860, BHP Billiton began mining tin on the island of Billiton. As it continued to grow, BHP built up mining operations in Canada, South Africa, and Australia. Moreover, the company also expanded its activities to include nickel, aluminum, and steel production. In all, it had operations in twenty-five countries.
Anglo American (NYSE:AAL) is a global mining and exploration firm with operations throughout the world. Its primary focus is the production of copper, gold, and molybdenum. Freeport-McMoran was founded in 1988 and has a market cap of nearly $47 billion. While it is not a gold miner, it does have significant mining operations throughout North America, including the Cerro Verde operation in Peru.
The company has made a huge acquisition in the Gulf of Mexico and Indonesia. It also sold assets in Brazil, Argentina, and Turkey. In 1992, Freeport-McMoran sold a majority stake in the Greenvale Nickel project in Queensland to a new owner for $26 million in cash and $11 million in deferred payments. Freeport-McMoran also set up a subsidiary in Australia called Freeport-McMoran Australia Ltd. to handle their gold and diamond projects in Australia.
After a successful sale of its mining assets, Freeport-McMoRan entered into several complex deals. It acquired rival Arcadian Corp. for $1.9 billion. The combined company had an annual revenue of about $2.2 billion. Freeport-McMoRan also agreed to sell its mining operations to its joint venture partner, IMC Global. Its stock price rose over the past three years.
The company’s first large-scale mining operation took place in Indonesia in 1966. This company primarily mined copper in Irian Jaya province, a mountainous region of Indonesia. The first copper shipment from this mine was worth $2 million. Later, Freeport also began mining gold and silver at the Grasberg Prospect in Louisiana. And by 1967, the company had fully acquired the company.