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Quarterly Rankings Of Top Companies Remain Stable

The first quarter of 2017 concludes with minor shifts in market cap rankings for the metals and mining industry's largest companies. The top 25 are worth an aggregate US$632 billion as of March 31, an 8% increase over the end of the December 2016 quarter, when the same companies held a value of US$587.17 billion. At March-end 2016, these companies were worth only US$433.20 billion, although it is important to note that the composition of the top 25 differed at that time.

Top 25 metals and Mining companies ranked by Q1 17 market cap

The top five companies remain unchanged since the end of December, with BHP Billiton, Rio Tinto, Glencore, Vale and Coal India maintaining their rankings. Only BHPB experienced a quarter-on-quarter slip in value, by an insignificant 1%. The market caps of Glencore and Vale improved by 14% and 21%, respectively, during the first quarter, while also rising 73% and 138% compared to the first quarter of 2016.

A handful of companies saw a significant quarter-on-quarter change in market value. The largest was at Bombay Stock Exchange-listed Vedanta, whose value rose 33% in three months to US$12.56 billion. The diversified natural resources company, and Indian subsidiary of London-based Vedanta Resources, improved by 11 positions to No. 22, which is the largest shift in the rankings. The company, which was well outside the top 25 a year ago, with a value of only US$4.03 billion, recently announced a US$1 billion dividend and indicated that a merger with oil and gas company Cairn India could be imminent. Meanwhile, Hindustan Zinc, 65% owned by Vedanta, sits at No. 12 and was worth US$18.82 billion at the end of March. The company may accelerate mine expansion plans, based on its anticipation of higher zinc prices to come.

The second-largest improvement in market value was at LSE-listed Fresnillo, which rose to No. 16 from No. 23 at the end of December. The world's largest primary silver producer was worth US$14.34 billion, marking a 29% quarter-on-quarter improvement. Fresnillo achieved record silver and gold output in fiscal 2016 and saw its profit surge to US$427 million during the year, compared with US$70.5 million in 2015. This was attributed to improved commodity prices and higher volumes.

Albemarle, the world's top lithium producer, rose to No. 25 after ranking 29th at the end of December. The Charlotte, N.C.-headquartered company plans to double lithium concentrate production at its jointly owned Greenbushes facility in Western Australia to more than 160,000 t/y. Production attributable to the expansion is slated to begin in the second quarter of 2019. Greenbushes currently supplies about one-third of global lithium demand.

Other companies that rose in first-quarter market cap rankings include ASX-listed Fortescue Metals and Newcrest Mining, which improved by two and three positions to No. 15 and No. 19, respectively. Fortescue, a global leader in the iron ore space, recently reduced its debt bill by US$1 billion as part of its debt-reduction strategy. Meanwhile, Newcrest's market value has risen 16% since end-December, and it is one of only two major companies to recently announce a dividend lower than what it paid previously.

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The three-month performance of other major gold producers was mixed, as Barrick Gold, Polyus Gold and Goldcorp rose in value by 19%, 8% and 8%, respectively. Newmont Mining, on the other hand, saw its market cap decline by 3% to US$17.52 billion, and fell one position to No. 13. Gold prices are up about 8% to date in 2017.

Several other companies' market values decreased in the first quarter of 2017, resulting in lower rankings. The market values of TSX-listed Potash Corp. of Saskatchewan and Agrium fell by 6% and 5%, respective declines of three and two places. The two fertilizer producers agreed to an all-scrip merger in September 2016 to create a global giant worth US$36 billion, but the proposal was recently criticized by the Competition Commission of India as being bad for competition. As of March, the merger was expected to close later this year.

Norilsk Nickel and Freeport-McMoRan slipped in the rankings by one position and two positions, respectively, although only the former lost market value, falling by 4%. Freeport's market cap rose by 1%, bringing the company's value to US$19.31 billion.

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