Canada’s Top 40 (August 01, 2005)
Once again, as it has for most of the past decade, Noranda Inc. is Canada’s largest mining company. We rate companies by revenue, and Noranda earned a whopping $9.08 billion in 2004. But next year Noranda’s name will not top the list, guaranteed. That company and Falconbridge Ltd. (No.6) have combined their assets, and sadly the Noranda name has been retired. The business is continuing under the Falconbridge banner.
Familiar names round out the count of the 10 largest revenue-generating companies. Well behind Noranda, in second place with $5.89 billion is Newmont Mining Corp., the same spot it occupied last year. Inco Ltd. ($5.63 billion) moved up to third place from fourth, and Syncrude Canada Ltd. ($4.57 billion) went to fourth from sixth. Again in the fifth spot is Potash Corp. of Saskatchewan ($4.22 billion). Falconbridge Ltd. ($4.00 billion) is in sixth place, up from eighth last year. Dropping from third to seventh is Agrium Inc. ($3.91 billion). Teck Cominco Ltd. ($3.43 billion), the oil sands segment of Suncor Energy Inc. ($3.17 billion) and Barrick Gold Corp. ($2.51 billion) complete the list of the 10 largest corporations.
A lot of money is at stake for these world-class players. The top three companies had revenues that together topped $20 billion in 2004; that is a substantial number and greater than many of the world’s national treasuries. Collectively the miners in the 10 top slots generated revenues of nearly $46.5 billion (compared with $36.4 billion for the top 10 in 2003).
Four more companies had revenues of more than a billion dollars each: Placer Dome Inc. ($2.46 billion), Fording Canadian Coal Trust ($1.17 billion), Sherritt International Ltd. ($1.09 billion) and Cameco Corp. ($1.05 billion). Not until No.15, Highland Valley Copper ($748 million), is there a company that missed the billion-dollar revenue mark.
All 40 companies together had revenues that totalled about $57.7 billion, a 26% increase over the $45.9 billion total in 2003. From Noranda’s $9.1 billion at the top to Kirkland Lakes Gold’s $9.8 million in fortieth position, congratulations to everyone.
This year we are happy to add FNX Mining Co. Inc. (No.29) to our Top 40. FNX and Dynatec Corp. (No.26) are partners in the Sudbury Joint Venture that has successfully reopened old nickel mines previously worked by Inco (see article in CMJ April 2005).
Also on the list for the first time at No.37 is HudBay Minerals Inc. This new, publicly traded company was formed by OntZinc Corp. when it bought the assets of Hudson Bay Mining & Smelting in northern Manitoba.
Kirkland Lake Gold Inc., which missed the Top 40 last year, has squeaked in as No.40. Its most important asset is the Macassa gold mine in northeast Ontario, another property closed by a larger company and reopened profitably by a junior.
For the companies on our Top 40 list, continuing strong commodity prices supported many healthy year-over-year revenue increases.
The company with the greatest revenue increase was Aber Diamond Corp. (No.18), which saw its sales jump 274% from 2003 to 2004. Highland Valley’s revenues swelled 177%, marking the largest increase for a base metal producer. Steady increases in the price of copper, nickel and zinc pushed revenue up for base metal producers: Noranda by 39%, Inco by 56%, Falconbridge by 37%, and Teck Cominco by 54%. Smaller producers also enjoyed the trend.
The wild rise of oil prices pushed revenues up 38% at Syncrude, up 18.5% at Suncor’s oil sands operation, and more than doubled revenues for Western Oil Sands Ltd.
Gold remained over US$400/oz all year, giving gold producers much to cheer about. Newmont’s revenue went up 33% during 2004. Revenue at Barrick fell 12%, at Placer Dome it remained unchanged, and at Goldcorp it was down 32.5%. The same sector was squeezed by corresponding high prices for services and goods, particularly when it came to new mine development.
Producers of potash and uranium had higher revenues, again thanks to strong prices for their commodities. Potash Corp. of Saskatchewan and Agrium enjoyed gains of 4% and 8%, respectively. The world’s premier uranium producer, Cameco, had a revenue gain of 18%. While these gains may not fall into the “spectacular” category, they are steady and likely to be repeated this year.
Sadly, some familiar names are gone from the Top 40 list. Imperial Metals Corp. saw its revenue cut drastically while it proved up reserves at the former Mount Polley mine. The mine has been reopened, and we will look for Imperial next year.
Kinross Gold Corp. is not included because of delays in filing its year-end financial statements. Evidently, some questions arose concerning the accounting done at the time it took over Echo Bay Mines and TVX Gold. Kinross has filed unaudited statements for the first nine months of 2004 that indicate it had revenues of $643.6 million. That amount is more than enough to qualify for listing, but until the problems are sorted out the accurate figures are unavailable.
Campbell Resources Inc. has also dropped off the list. The company spent the end of last year preparing to reopen the Copper Rand mine, which it did early in 2005. Technical problems have forced suspension of mining, and the company has sought bankruptcy protection.
An era has passed with the Noranda name not expected to appear next year. Corporate consolidation will probably vault the Falconbridge name to the top of the list next year. The good news is that the combined assets have made a global powerhouse that remains proudly Canadian.
Canada’s Top 40 list (117KB PDF)