MINERAL Resources has become the 11th Western Australian company to join the S&P/ASX 100 on the back of substantial growth in the second half of 2012.
The addition of MinRes to the list comes on the back of the company announcing its intention to develop the Iron Valley Mine in the Pilbara to production in six months after a mine-gate sales agreement with the mine’s owner, Iron Ore Holdings.
The mine will join Phil’s Creek and Poondano as MinRes sites in the Pilbara.
MinRes brings a rare formula to the S&P/ ASX 100, combining its mining operations with a substantial mining services and contracting business that includes pipeline engineering and construction.
The company, whose share price has surged in the past six months giving it a market capitalisation of $1.98 billion, also has major iron ore operations in the Yilgarn, including the recently developed Carina iron ore project.
MinRes exported a total of 2.7 million tonnes of iron ore and manganese in the six months to December 2012.
MinRes is the latest WA company to enter the leading Australian index after the inclusion of Regis Resources and Aurora Oil and Gas last year.
Since Regis Resources’ inclusion in the index, the company’s share price has fallen from a high of $5.85 in October to $4.24, breaking a period of sustained growth for the miner.
The S&P/ASX 100 index, compiled by S&P Dow Jones Indices, ranks Australia’s large-cap and mid-cap companies by liquidity and size for institutional investors, who have an emphasis on liquid portfolios.
International education provider Navitas could be the next WA representative in the top index, as substantial growth has propelled it up the S&P/ASX 200, which it joined in 2011.
The company has a current market value of $1.81 billion, close to companies at the bottom end of the leading index.
The expansive Wesfarmers and Woodside Petroleum remain the dominant WA companies in the index, with market capitalisations of $41.3 billion and $30.1 billion respectively.
They are followed by large-cap miners Fortescue Metals Group and Iluka Resources, with market capitalisations of $13.6 billion and $4.05 billion respectively.
Perseus Mining remains in the index but, after a poor performance over the six months to December which saw the value of the company slide, it seems the stock’s position as an S&P/ASX 100 member could be under review.
WA uranium miner Paladin Energy has fallen out of the index on the back of a weaker uranium price and several operational writedowns.
The remaining WA companies in the index are Seven West Media and engineering group Monadelphous, which recently secured a $260 million contract with Rio Tinto for the Western Turner Brockman iron ore development in the Pilbara.
Atlas Iron, which posted a half yearly loss of $256 million in February after asset writedowns, rounds out the list.
