Profitability in mining depends on several factors such as the type of mineral or resource being mined, the location and size of the deposit, the efficiency of the mining operation, the current market price for the mineral, and the cost of labor and equipment. This article is part of our metals and mining guides. For an overview see A Comprehensive Guide to Metals and Mining.
Some of the most profitable miners typically are in industries such as:
Gold Mining
Gold has been a valuable commodity for centuries and continues to be a profitable mineral to mine, particularly in countries like Australia, Russia, and Canada.
Copper Mining
With the rise of electric vehicles and renewable energy technologies, which use significant amounts of copper, this mineral has become increasingly valuable.
Rare Earth Metals
Rare Earths are used in many high-tech industries, including electronics and renewable energy. China is currently the largest producer of these minerals, but other countries are trying to develop their own industries.
Iron Ore
This is a key ingredient in steel production, which is essential for many industries. Australia and Brazil are among the leading producers of iron ore.
Coal
Despite environmental concerns and a shift toward renewable energy, coal mining remains profitable in many parts of the world due to demand from industries like electricity generation and steel production.
Profitability can change with shifts in market demand, technological advances, regulatory changes, and other factors.
Mining has evolved through history, read our comprehensive guide to metals and mining for more insights into investing in the sector.
Profitable Miners
Some large mining companies that are profitable include:
Glencore PLC (LSE: GLEN) is a British-Swiss multinational commodity trading and mining company. It operates globally, producing commodities such as copper, cobalt, zinc, nickel, and coal. With a market cap of $54bn and revenue of over $200 billion, Glencore is one of the largest mining companies worldwide.
BHP Group Ltd (ASX: BHP) (LSE: BHP) (NYSE: BHP) is an Australian multinational mining and petroleum company operating in over 90 countries. It is the world's largest mining company by market capitalization and a top producer of commodities like iron ore, copper, and petroleum.
Rio Tinto PLC (LSE: RIO) (ASX: RIO) (NYSE: RIO) is a British-Australian multinational mining company with operations in North America, Europe, Asia, Africa, and Australia. It produces commodities such as iron ore, aluminium, copper, diamonds, and uranium.
China Shenhua Energy (SSE: 601088) is the largest state-owned coal mining enterprise in China and globally. It mines, refines, and sells coal and generates electric power within China. The company also operates an integrated railway network for transportation.
Vale S.A. (NYSE: VALE) (BVMF: VALE3) is a Brazilian multinational mining company known for being one of the largest producers of iron ore and nickel worldwide. It also produces copper, manganese, coal, and other minerals, with operations in Brazil, Canada, and Mozambique.
Anglo American PLC (LSE: AAL) (JSE: AGL) is a British multinational mining company that is the world's largest producer of platinum and a major producer of diamonds, copper, nickel, iron ore, and coal. It operates in Africa, Asia, Australia, Europe, North America, and South America.
Zijin Mining Group (SSE: 601899) is a China-based multinational mining company specializing in the exploration and mining of gold, copper, and other mineral resources. It is one of the largest producers of gold, copper, and zinc in China.
Nutrien (TSX: NTR) (NYSE: NTR) is a Canadian fertilizer company and the world's largest potash producer. It operates six potash mines in Saskatchewan and has retail locations across North America, South America, and Australia.
Yanzhou Coal Mining Company (SSE: 600188) is a Chinese mining company primarily engaged in underground coal mining, processing, sales, and railway transportation of coal. It operates six mines in China and has a regional rail network connecting them.
Freeport-McMoRan (NYSE: FCX) is an American mining company based in Arizona. It is the world's largest producer of molybdenum, a major copper producer, and operates the largest gold mine, the Grasberg mine, located in Papua, Indonesia.
Profitability in the Mining Industry
The mining industry plays a vital role in the global economy, and when it comes to profitability, certain miners stand out. Among the various minerals being extracted, iron ore and copper have emerged as highly profitable commodities.
Profitable mining companies like BHP Group, one of the world's biggest miners, have capitalized on the demand for these resources. With a substantial market capitalization of more than $148bn and impressive net income figures, BHP Group has cemented its position as a profitable miner. Its success can be attributed to its focus on the production and exportation of iron ore and copper, which have contributed significantly to its market cap growth.
However, the profitability of these mining giants does not come without challenges. One notable concern is their high power consumption in the use of fossil fuels. As the biggest mining companies strive to extract minerals on a massive scale, their operations require substantial energy inputs, which can be costly. Despite this obstacle, the world's largest mining companies continue to adapt by adopting more sustainable practices and exploring renewable energy options to mitigate their environmental impact while maintaining profitability.