Quicklinks: Summary, products and services, successful companies | Income and profitability | Expenses | History, strategy and challenges
Summary, products and services
Summary of the mining business: How do mining companies make money?
Mining is the process of extracting minerals and other materials from the earth. Miners work in a variety of settings, including underground mines, surface mines, and quarries. They use a variety of tools and equipment to extract minerals and other materials from the earth.
Mining is a very risky business. There are many dangers involved in mining, including cave-ins, explosions, and exposure to harmful chemicals. miners must take precautions to protect themselves and their equipment.
Mining is a very competitive business. miners must be very efficient in order to make a profit. They must also have access to capital in order to invest in new mines and equipment. Mining companies typically sell their products to other companies that use them in a variety of industries, such as construction, manufacturing, and agriculture.
List and description of the five most successful companies in the mining business. How big are they and what is their market value?
The five most successful companies in the mining business are Rio Tinto, BHP Billiton, Vale, Glencore, and Anglo American. They are all large multinational corporations with a combined market value of over $700 billion.
- Rio Tinto is the largest mining company in the world with a market value of over $100 billion. It is followed by BHP Billiton, Vale, Glencore, and Anglo American. All five companies are involved in a wide range of mining activities including iron ore, coal, copper, and other metals and minerals. Rio Tinto is a British-Australian multinational mining company headquartered in London and Melbourne. It is the second largest mining company in the world by revenue and the third largest by market capitalization. Rio Tinto is a diversified mining company with operations in over 40 countries around the world. The company’s main products are iron ore, aluminum, copper, diamonds, and industrial minerals such as borates, titanium dioxide, and salt. Rio Tinto has a long history dating back to 1873 when it was founded as the Rio Tinto Company in Spain.
- BHP Billiton is an Anglo-Australian multinational mining and petroleum company headquartered in Melbourne, Australia. It is the world’s largest mining company by revenue and market capitalization. BHP Billiton was created in 2001 through the merger of two Australian companies, BHP and Billiton. The company operates in more than 25 countries around the world with a focus on iron ore, coal, copper, nickel, and potash mining operations.
More companies…
- Vale is a Brazilian multinational corporation engaged in metals and mining industry with headquarters in Rio de Janeiro. Vale is the largest producer of iron ore and nickel in the world. Vale also produces manganese, ferroalloys, copper, bauxite, potash, kaolin, and cobalt. The company has operations in 30 countries across five continents. In addition to its core mining business, Vale also has interests in logistics, energy generation (thermal and hydro), steelmaking (through CSA), agriculture (fertilizers), and other businesses such as shipbuilding.
- Glencore is a Swiss multinational commodity trading and mining company headquartered in Baar, Switzerland. Glencore has operations in over 50 countries around the world with a focus on commodities such as metals and minerals (including zinc, lead, copper), energy products (including oil), agricultural products (including wheat) ,and industrial minerals (including potash). The company also has significant financial investments in companies involved in these same sectors. Glencore is one of the world’s largest producers of zinc and lead.
- Anglo American is a British multinational mining company headquartered in London with operations in over 50 countries around the world. The company’s main products are diamonds (De Beers), platinum group metals (Anglo American Platinum), coal (Kumba Iron Ore), base metals (Copper & Nickel) ,and industrial minerals (Tronox). Anglo American also has interests in agriculture (through its investment in Ensus) ,and infrastructure (through its investment in Port Waratah Coal Services).
Income and profitability
List of the top three sources of revenue for miners (AKA how do they make money?) – including percentages of income and examples in US dollars for each
- Metal sales: This is the most direct way mining companies make money. They dig up metals and minerals and then sell them on the commodities market. For example, BHP Billiton, the world’s largest mining company, had iron ore, copper, coal, and nickel revenues of $26.9 billion in 2017.
- Dividends: Many mining companies are structured as publicly-traded corporations. That means they have shareholders who expect to receive a portion of the company’s profits through dividends. For example, in 2017 Rio Tinto, another large mining company, paid out $4.5 billion in dividends to its shareholders.
- Royalties: Some mining companies also generate revenue by charging other companies a fee for the right to mine on their land. This is called a royalty. For example, Goldcorp, a large gold mining company, collected $248 million in royalties in 2017.
Pricing: What are average prices among miners
The average price for a high-end mining company is $2,000 per ounce, a mid-market company is $1,000 per ounce, and a low-end company is $500 per ounce.
What are the profit margins in the mining business? In a percentage range.
There is no one answer to this question as profit margins vary greatly from one mining operation to the next, and are also dependent on a number of factors, including the type of minerals being mined, the location of the mine, the size of the operation, and the current market conditions. However, in general, profit margins in the mining industry are relatively low, typically ranging from 5% to 10%.
Expenses
What is the cost to build a mining business? With an example.
The cost to build a mining business can vary significantly depending on the size and scope of the operation. For example, a small-scale mine that is just starting up may have initial costs of $100,000 or more, while a large-scale operation could have initial costs of $1 billion or more. In addition to the initial costs, there are also ongoing costs associated with mining, such as the cost of labor, equipment, and supplies.
List and description of the top three ongoing expenses for miners. What percentage does each represent?
The top three ongoing expenses for mining businesses are labor costs, fuel costs, and equipment costs. Labor costs typically account for the largest percentage of ongoing expenses, followed by fuel costs and equipment costs.
The exact percentages vary depending on the specific mining operation, but labor costs typically account for 30-50% of total ongoing expenses, fuel costs typically account for 20-30% of total ongoing expenses, and equipment costs typically account for 10-20% of total ongoing expenses.
History, strategy and challenges
What is the history of the mining business? With examples for each continent of the world.
The first known miners were in the region of Anatolia, modern-day Turkey, where they mined for turquoise and copper around 6000 BCE. By 4500 BCE, the Sumerians were using bronze, an alloy of copper and tin, to make tools and weapons. The first large-scale mines were developed in Egypt and Mesopotamia (modern-day Iraq) around 3000 BCE.
The Incas, who ruled much of South America from the 12th to 16th centuries, were also avid miners. They extracted silver and gold from mines in the Andes Mountains, as well as copper, zinc, and tin. The Romans also mined extensively for metals such as lead, iron, copper, and gold.
The Industrial Revolution of the 18th and 19th centuries led to a dramatic increase in mining activity. Coal mines were developed in England and Wales to power the new steam engines, and mines for other metals such as iron, copper, and zinc were also established. The mining industry continued to grow throughout the 20th century, with new mines being developed for diamonds, uranium, and other minerals.
Today, mining is an essential part of the global economy, providing the raw materials for a wide range of products we use every day. However, it is also a controversial industry, due to the environmental impact of mining operations. In recent years, there have been increasing calls for more sustainable mining practices, and many companies are now working to reduce their environmental footprint.
Interesting facts about the sector
-The world’s deepest mine is Mponeng gold mine in South Africa, which extends 4km below ground. -The largest diamond ever found was the Cullinan diamond, discovered in South Africa in 1905. It weighed 3106 carats (over 600g). -The largest gold nugget ever found was the ‘Welcome Stranger’, discovered in Australia in 1869. It weighed 63kg. -The world’s largest mining company is BHP Billiton, a Anglo-Australian multinational with operations in over 25 countries.