RE: Market Cap.6 Feb 2021 10:44
https://www.thetimes.co.uk/article/mining-giant-strikes-gold-as-it-takes-ftse-crown-mkq8dmlw7
BHP has become the most valuable company in the FTSE 100 for the first time after rebounding strongly from the pandemic.
The market capitalisation of the world’s biggest mining group stands at almost £115 billion, ahead of Unilever on nearly £107 billion. BHP overtook the consumer goods powerhouse to take the top spot last month, data from Refinitiv shows.
The Anglo-Australian miner has been buoyed by rises in the prices of iron ore and copper, its biggest commodities. Its shares have more than doubled in value since their recent nadir on March 12 last year, when markets crashed as the pandemic took hold, and are up about 18 per cent from a year ago. They closed up 9½p, or 0.5 per cent, at £20.44 today. By contrast, the FTSE 100 index of Britain’s biggest publicly quoted companies, which closed at 6,489.33, remains down by about 13 per cent from a year ago.
BHP, which produces commodities including iron ore, copper, coal and oil, reported net profits of $8 billion in the year to June 2020. It has about 80,000 employees and contractors worldwide, with operations concentrated in Australia and the Americas, and makes most of its revenue by selling to China.
Iron ore, used in steelmaking, is BHP’s biggest earner, accounting for about half of its revenues and two thirds of its underlying profits in its last financial year. Copper accounted for about a quarter of its revenues and about a fifth of its underlying profits. Iron ore prices hit their highest level in almost ten years in January amid a strong recovery in demand from China, while copper prices touched eight-year highs.
Despite BHP’s size, the company has a relatively low public profile in Britain and in recent years perhaps has been best known for its co-ownership of the Samarco mining venture in Brazil, where a waste dam collapse in 2015 killed 19 people and caused Brazil’s worst environmental disaster.
BHP has a dual-listed company structure comprising two parent companies: BHP Group Plc, listed in London, and BHP Group Limited, listed in Australia.
The structure means that although BHP operates as one company, only the London-listed entity, which accounts for about £43 billion of its value, is counted as a constituent in the weighting of the FTSE 100. It now accounts for about 2.4 per cent of the index, according to London Stock Exchange data.
Unilever’s shares still have the most bearing on the wider index.
Under the leadership of Mike Henry, BHP is preparing to quit the production of polluting thermal coal, which is burnt in power stations and is a significant contributor to climate change, and is seeking to grow its presence in “future-facing” metals such as copper and nickel.
In a recent note Deutsche Bank said that the company was “facing strategic challenges due to its core commodity mix”, questioning how its coking coal and oil businesses would be rated by climate-con
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