Stock losses for world’s biggest mining companies near 30% since war’s start as copper enters bear market, silver falls 40% from high and gold suffers worst week in decades.
Gold futures in New York fell by $225 an ounce from opening levels to last trade at $4,492 an ounce by late afternoon, a 3.5% decline on the day and more than 11% for the week. As usual silver’s swings were wilder with the precious metal exchanging hands for $67.81 in after hours trade, a 6.9% drop from the start of trading on Friday.
Copper ended the day down 4.0% and was last worth 5.30 per pound ($11,690 a tonne), down 7.4% for the week. Gold, silver and copper entered a technical bear market with gold down more than $1,100 or just over 20% from its January 29 record, silver dropping 44% and copper giving up just shy of 20% or more than $2,800 per tonne from its all-time high struck at the same time.
Gold, silver and platinum stocks were hardest hit with Newmont (NYSE:NEM) now trading 26.3% below levels seen just before the start of the Iran war at the end of February after Friday’s heavy selling which saw 30.7 million shares traded.
Barrick Mining (NYSE:B) is down 26.8% over the same period with 29.1 million shares exchanging hands on Friday. Newmont is now worth $104 billion in New York down from a peak of $143 billion at the end of January while Barrick’s market worth is down $27 billion since then for a $62 billion market cap on Friday.
It was reported this week that Teck Resources holds a royalty on Barrick’s Fourmile gold project in Nevada that could generate billions of dollars and impact the valuation of Barrick’s planned North American mine spinoff.
Shares in Anglogold Ashanti (NYSE:AU) are down an eye-watering 37.4% so far in March for a market value of $40 billion while Gold Fields (NYSE:GFI) has lost 33.6% to $35 billion. Kinross Gold’s slide reached 28.3% for a market cap of $32 billion.
Royalty and streaming companies Wheaton Precious Metals (NYSE:WPM) has fallen just under 30% since the start of hostilities in the middle east and is now worth $52 billion compared to a more modest drop of 20.7% for Franco-Nevada at a $43 billion evaluation.
Over the counter units of silver miner Fresnillo (OTCPK:FNLPF) trading in the US is down 31.3% in March shaving its market cap to $30 billion while Pan American Silver (NYSE:PAAS) has suffered a 32.1% decline to under $20 billion. Valterra Platinum (OTCPK:ANGPY) has been one of the worst performers dropping 35.3% from a multi-year high hit on the Friday before the bombing campaign started, ending up at a $20 billion market cap just three weeks later.
Some copper producers and diversified companies fared better than the precious metal sector but losses top 20% across the board with only a couple of exceptions.
BHP (NYSE:BHP) shares trading in the US have shed 20.0%, sliding from a record high valuation (for any mining stock in history) of $213 billion at the start of the war. Record profits for the Melbourne-based company and China as its main customer has not been enough to shield the firm from the broader fallout of the war.
BHP’s incoming CEO Brandon Craig who takes the helm of the company at the end of May inherits a company balancing ambitious spending plans with investor expectations for returns after a period defined by bold — and not always successful — dealmaking, most notably its botched bid for Anglo American.
Southern Copper (NYSE:SCCO) underperformed other copper majors, with losses for March of 31.1% to $126 billion, seeing the company in the Grupo Mexico stable lose its edge as the world’s second most valuable miner over Rio Tinto (NYSE:RIO) which has come of relatively lightly with a 16.3% decline to a $143 billion market cap.
Rio Tinto stock received a lift after the company said on Monday it has gained control of acreage in Arizona needed to build the Resolution mine, a project slated to become one of the largest US sources of copper. Rio Tinto said it would now embark on a $500 million drilling campaign to delineate the deposit which is co-owned by BHP.
Freeport-McMoRan (NYSE:FCX) was one of the most heavily traded mining stocks with more than 25 million shares exchanging hands. After a 23.5% retreat for March, Freeport is now worth $74 billion after briefly reaching the $100 billion mark (only the 8th mining stock to ever do so) in February.
A Chilean business paper earlier this week reported that the Phoenix-based company has begun the environmental permitting process for a $7.5 billion expansion of its majority owned El Abra copper mine in Chile. The expansion would increase annual copper output by more than 300,000 tonnes, compared with 91,000 tonnes produced last year.
Last month Indonesia’s investment minister and Freeport’s unit in the Asian country signed a memorandum of understanding to extend the company’s mining permit for the iconic Grasberg mine beyond 2041.
Glencore (OTCPK:GLNCY) has managed to emerge relatively unscathed, only losing 4.3% since the start of US and Israeli operations in Iran in part to its extensive oil trading business which should do well as crude and gas prices jump. The Switzerland-headquartered company trades around 4 million barrels of oil equivalent per day. Glencore is now worth $81 billion and year to date the company is now the best performer among mining’s heavyweights with a 25.6% advance.
There was speculation last week from large investors in Glencore that a recent surge in coal prices will help bring Rio Tinto back to the table for a fresh attempt at creating the world’s biggest mining company after meeting with leaders of both companies in Australia.
Vale (NYSE:VALE) stock has declined by 18.2% for a market cap of $61 billion, one of the better performing large-cap miners. The CEO of Vale’s base metals spin-off, Shaun Usmar, told Bloomberg at the beginning of March the sprawling nickel-and-copper business is ready for a potential initial public offering by midyear, sooner than previously indicated. The task of bringing down costs, lowering capital intensity and accelerating the project pipeline is moving ahead at a faster clip than previously envisaged Usmar said.
Anglo American (OTCPK:NGLOY) losses since the beginning of the month have climbed to 23.4% matching the decline of merger partner Teck Resources (NYSE:TECK) affording the Canadian miner a $22 billion valuation compared to Anglo’s $41 billion.
Last month Anglo said it is weighing a third writedown of De Beers in as many years as weak diamond prices persist and the miner advances asset sales ahead of the tie-up which is currently in front of the EU anti-trust body.
Punter’s favourite Ivanhoe Mines (TSX:IVN) is now trading 30.5% lower for March at $11 billion while copper specialist First Quantum Minerals (TSX:FQM) has fallen by 30.5% to $18 billion over the same period. Pink sheets of Antofagasta (OTCPK:ANFGF), and KGHM (OTCPK:KGHPF) dropped 28.2% to $41 billion and 21.5% to $14 billion respectively.
Chinese heavyweight Zijin Mining (OTCPK: ZIJMY) has settled in as the world’s fourth most valuable mining firm despite its US over the counter units plunging by 30.2% since the start of the conflict for a $123 billion market value.
