Barrick Leads Top 40 List

The numbers have been crunched, the results tabulated, and CMJ is proud to announce this year’s top Canadian mining company is the world’s biggest gold producer, Barrick Gold. Thanks in part to the historic high price of gold, the company had gross revenues of $11.25 billion in 2010. Watch for Barrick to retain its top spot for 2011 following its takeover of copper producer Equinox Minerals.

Last year’s leader, potash producer Agrium, was a close second with $11.07 billion (if a couple hundred million dollars can be called close) behind Barrick.

In third place is Teck Resources with gross revenues of $9.34 billion. Strong copper prices and coal demand kept Teck in the same position as last year. A couple billion dollars behind Teck is the oil sands revenue of Suncor Energy ($7.03 billion). Rounding out the top five spots is Potash Corporation of Saskatchewan ($6.73 billion).

The second five of the top 10 are Goldcorp ($3.91 billion), Canadian Oil Sands (including the Syncrude oil sands operations, $3.46 billion), Kinross Gold ($3.10 billion), First Quantum Minerals ($2.25 billion) and uranium powerhouse Cameco ($2.12 billion).

Strong commodity prices have had a healthy effect on most of Canada’s mining companies. Gold, base metals, potash, metallurgical coal and iron ore are all in high demand, and they are all enjoying prices at or near historical highs. The 16 top companies on our list all had gross revenues of over a billion dollars. A year ago we found 12 companies above the billion-dollar mark.

The mining industry has done an amazing job of bouncing back from the global economic implosion of 2008, and the outlook for commodity prices remains bright. When it comes to posting large year-over-year increases in gross revenue, the five companies with the largest revenue change all at least doubled their bottom lines. They are Agnico-Eagle (132%), Eldorado Gold (121%), Uranium One (115%), Mercator Minerals (106%) and Quadra FNX (100%). Barrick does not appear on the list because it recorded a net loss for 2009, and the mathematics are not applicable.

Raking in billions in gross revenues is one thing. Holding onto the money and turning it into net earnings is another thing. Not surprisingly, the companies who rank highest in gross revenues also tend to be those with the largest net earnings. Barrick leads the list of top earners ($3.37 billion) far ahead of second place Teck ($1.98 billion). The next three top earners – PotashCorp ($1.86 billion), Goldcorp ($1.61 billion) and Suncor ($1.42 billion) – close out the billionaires’ club of top earners. Of course, the $465 million earned by tenth-place Yamana Gold is also an extremely profitable result for a single year.

Looking at net earnings as percentage of gross revenue, the picture is a little different. In first place Taseko Mines, ranked 32nd on the Top 40 list, managed to turn 56% of its revenue into earnings. Barrick, by contrast, ranked ninth, proving perhaps that it takes a lot of money to run a big company.

A quick look at the companies with the largest assets reveals that the leaders by this benchmark are also the companies that rake in the most revenues. The leader is Suncor ($40.1 billion), followed by Barrick ($34.3 billion), Goldcorp ($29.7 billion), Teck ($29.2 billion) and Kinross ($16.9 billion).

Consideration was given to ranking companies by asset growth in 2010 over 2009. A problem quickly arose. Assets grow by exploration efforts, increases in commodity prices, the opening of a new mine, or the merger of two or more companies. To compare them with notes about how the growth was obtained might be the topic for another day.

Any way we want to measure it, the Top 40 Canadian miners have many reasons to be proud of what they do. And to Barrick Gold go the bragging rights of being Canada’s largest mining company by gross revenue as well as the world’s largest gold producer. Congratulations!