To start off the comparison, it's hard enough to find their market caps. Many websites actually do not publish a market cap for these companies (Yahoo UK being one of these) and most that do get it wrong as they only count the number of shares in UK circulation (more BHP than Rio for example, Interactive Investor get Rio’s but not BHP’s). So how do you find the valuation of these companies, well Rio Tinto’s is a lot easier to find than BHP’s, and the issue for BHP is that even though they are one company, they are listed as two separate companies in the UK and Australia.
The first way that you can try to work out the value of these two companies is to look for the total number of shares in circulation, this will be posted in their annual accounts for each year, but I will give you the figures that I have got, currently in total Rio Tinto have approx 1.5bn shares in circulation and BHP Billiton have approx 5.6bn in circulation. This would yield a current worth for Rio of approx £50bn and BHP of approx £110bn. Another way is to use the NYSE listing of Rio and BHP on Yahoo finance, they offer the correct market cap here in US dollars, so to work the UK or Aus value just use the current exchange rates to work it out, here are the links – for Rio Tinto click here, for BHP Billiton click here. As you can see BHP are by far the bigger company in terms of market cap currently, and are the biggest mining group in the world, and have been since BHP merged with Billiton. But their dominance as the biggest mining group in the world has not always been as assured as it is right now, as the difference between Rio Tinto and BHP was actually a lot less at their peaks with Rio gaining on BHP.
So is this current difference warranted, and was Rio overvalued back when it made its challenge against BHP for the biggest miner in world? Well let’s have a quick look without going into too much detail, firstly how was Rio suddenly able to make such a challenge to BHP’s dominance at the top of the mining world? Well the simple answer is simple, firstly a commodities boom and secondly…
