BHP, Rio Tinto among most valuable Australian brands

Western Australia Iron Ore. Image: BHP

BHP and Rio Tinto have managed the impact of the COVID-19 pandemic to remain two of Australia’s most valuable brands in Brand Finance’s Australia’s 100 report.

BHP has dropped from fourth to fifth position on the top 10 most valuable brands list in 2021.

The company’s position suffered a a 17 per cent decrease in brand value to $7 billion.

“This is due to a greater economic risk across the market, which has impacted the discount rate applied to the valuation. Although revenue forecasts remained stable overall, a movement of revenues into less highly branded segments has reduced the royalty rate applied to the model, further reducing brand value,” Brand Finance stated.

Last year, Brand Finance found that BHP’s brand strength index (BSI) declined due to weakened social responsibility scores.

“BHP’s brand value has relied solely on its strong revenue in the face of a brand strength decline (down 1.8 to BSI 71.0) caused by weakening corporate social responsibility scores,” Brand Finance stated.

Rio Tinto dropped out of the top 10 most valuable brands in Australia, moving from the ninth to 11th position in 2021.

In last year’s report, Brand Finance was anticipating both companies to experience softening demand in China.

“Both brands are negotiating the increasing intolerance of new mining projects, among the Australian public and internationally; a strong brand becomes increasingly important in keeping other influential stakeholders, such as regulators, on a side to maintain growth and profitability,” Brand Finance stated.

“As BHP and Rio Tinto operate across borders, they are exposed to fluctuating global trade and have suffered as a result of softening demand in China, a key market.”

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