February 27, 2024

TOP AFRICA NEWS

We Digest News to tell the Truth

Glencore and BHP lead positive outlook of mining industry ushering post-pandemic transition to ESG-centricity alongside strategic consolidation

  • Switzerland’s Glencore is world’s most valuable mining brand valued at US$6 billion
  • New entrant Jiangxi Copper breaks into world’s Top 5 most valuable mining brands at 4th position
  • CITIC Pacific Mining (up 145%) is fastest growing mining brand in the world
  • New entrant Agnico Eagle is strongest mining brand
  • Posco has the highest Sustainability Perceptions Value at US$189 million

Glencore (brand value[1] up 50% to US$6 billion) is now the world’s most valuable mining brand from its runner-up position in 2022, having swapped places with BHP (brand value down 10% to US$5.2 billion) – according to Brand Finance’s Mining, Metals & Minerals 50 2023 report which ranks the world’s top 50 most valuable and strongest brands in the mining industry. In terms of brand strength, Glencore also improved its rating from A+ to AA along with a brand strength index boost of 7.6 points – resulting in a leap of 16 ranks to be placed as the world’s 11th strongest mining brand. Major contributors to the mining brand’s performance included a stronger revenue forecast riding on a record 2022 fiscal performance as well as a diversified and adept business model.

Jiangxi Copper (new entrant, brand value US$4.5 billion) made its debut in the rankings as the world’s 4th most valuable mining brand with a corresponding brand strength rating of AA- as the strongest and most valuable mining brand in China. With strong revenue forecasts in line with an impressive yearly earnings per share (EPS) compounded growth of 33% since 2019, the mining brand – China’s largest copper producer – is well-poised to leverage a growing global copper industry fueled by electric vehicle demand, transition to renewable energy systems, and the metal’s replacement of aluminum in computer and appliance parts. This positive business outlook, along with its commitment to environmental, social and governance (ESG) targets and initiatives, has translated into much optimism and positive reputational perceptions which are reflected in Jiangxi Copper’s brand performance this year.

CITIC Pacific Mining (brand value up 145% to US$4.3 billion) is the fastest growing mining brand in this year’s rankings, well ahead of HINDALCO (brand value up 107% to US$885.5 million), the second fastest growing mining brand. As such, CITIC Pacific Mining jumped seven ranks to make it into the world’s Top 5 most valuable mining brands at 5th place. A subsidiary of the Hong Kong-listed CITIC Limited owned by Chinese state-owned enterprise CITIC Group, the Australian-headquartered CITIC Pacific Mining’s brand performance was fueled by massive spikes in 2022 revenue forecast and 2021 revenue. These were in turn driven by several strategic business initiatives including: regulatory approval of a 1 billion yuan (US$ 145 million) loan to affiliate company CITIC Securities – China’s largest brokerage – for the purposes of offering securities asset management and overseas securities investment services, a taking over of stakes in five of property developer Kaisa Group’s projects in Shenzhen by CITIC Group worth over 60 billion yuan (US$8.9 billion) in July 2022 and CITIC Limited’s acquisition of Australian-headquartered Balmoral Iron in November 2021.

Image

Agnico Eagle (new entrant, brand value US$547.2 million) emerged as the strongest[2] mining brand in this year’s rankings with a corresponding brand strength rating of AA+. With a robust 7% growth in gold production guidance through 2025, the Canadian mining brand made substantial progress on existing development projects and realised synergies with the acquisition of assets belonging to other mining brands. This resulted in the successful expansion of mineral reserves and resources by 9% and 12% respectively. Despite higher costs of such exploration and amortisation, Agnico Eagle continued to see an increase in net income driven by higher sales volumes – contributing to stronger brand performance.

Image

South Korea’s Posco has the highest Sustainability Perceptions Value[3] among all mining brands in the rankings at US$189 million. The mining brand’s results reflect its contributions towards a low-carbon circular economy, underscored by the mining brand’s commitment to achieve carbon neutrality throughout all stages of its steelmaking processes by 2050. However, it is important to note that Posco’s position at the top of the Sustainability Perceptions Value table is not an assessment of its overall sustainability performance. Instead, it highlights the value that Posco has tied up in the sustainability perceptions of stakeholders.

Savio D’Souza, Valuation Director at Brand Finance, commented:

“The mining industry continues to play an increasingly integral role in the global economy owing to repercussions of the pandemic and geopolitical uncertainties. Mining brands therefore have a bright long-term outlook by capturing this business value through future proofing themselves to optimise engagement with stakeholders on key topics such as sustainability and talent attraction.”

MicrosoftTeams-image (28).png

[1] Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. The full ranking, additional insights, charts, more information about the methodology and definitions of key terms are available in the Brand Finance Mining, Metals & Minerals 50 2023 report.

[2] Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity and business performance. Compliant with ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 150,000 respondents in 38 countries and across 31 sectors.

[3] As part of its analysis, Brand Finance assesses the role that specific brand attributes play in driving overall brand value. One such attribute growing rapidly in significance is sustainability. Brand Finance assesses how sustainable specific brands are perceived to be, represented by a Sustainability Perceptions Score. The value that is linked to this score, the Sustainability Perceptions Value, is then calculated for each brand.

View the full Brand Finance Mining, Metals & Minerals 50 2023 report here

Print Friendly, PDF & Email

Leave a Reply

TOPAFRICANEWS.COM © All rights reserved.