Key facts
- Mining stocks lost $264 billion in market value in September due to inflation fears and rising bond yields.
- The world's top 50 mining companies ended September valued at $2.26 trillion.
- Gold producers alone lost $79 billion, with Kinross Gold and Shandong Gold cutting production targets.
- BHP lost $26.4 billion after a fatal accident at its Escondida copper mine and a potential strike.
- Lithium carbonate futures dropped 22.5% after China changed inventory counting methods, doubling reported stockpiles.
The world's 50 largest mining companies saw their market value plummet by $264 billion in September, primarily due to concerns over oil-driven inflation and rising bond yields. This sharp decline erased most of the gains made in August, leaving the sector valued at $2.26 trillion at the end of the month.
Rising oil prices and hawkish commentary from Federal Reserve officials had already triggered a global bond selloff, pushing government bond yields to their highest levels since mid-2008. The Federal Reserve further tightened monetary policy on September 16, raising its benchmark rate by a quarter point to a range of 3.75% to 4%.
Higher yields and a stronger dollar increase the cost of holding non-interest-bearing assets like gold. Consequently, New York gold futures fell 6.4% in September, while silver prices declined by 9%.
Gold miners were particularly hard-hit, with the 15 gold producers in the ranking losing a combined $79 billion. Kinross Gold and Shandong Gold both lowered their production targets, while Gold Fields saw its value drop significantly after its takeover bid for Northern Star Resources was rejected.
Copper producers also experienced substantial losses, totaling $44 billion. BHP recorded the largest dollar decline ($26.4 billion) following a fatal accident at its Escondida mine and a potential strike by its supervisors' union. First Quantum Minerals faced a significant drop after a Panamanian commission recommended terms for restarting its shuttered Cobre Panama mine.
Lithium producers were impacted by a data shock, as lithium carbonate futures in Guangzhou fell 22.5% after price reporters revised inventory counts, more than doubling reported Chinese stockpiles. Albemarle and Ganfeng Lithium each lost over a fifth of their value.