Mining Industry Overview

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  • Topic: Rio Tinto Group, BHP Billiton, Iron ore
  • Pages : 24 (2271 words )
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  • Published : November 19, 2012
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Mining
Industry

Overview

Boyi
Xie

March
5,
2012


Michael
Porter’s
Five
Forces


Outline

• 
• 
• 
• 
• 
• 
• 

Products

Suppliers/Customers

Industry
Compe?tors

Cost

Revenue
&
profit

Overall
trends

Other
factors


Products

• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Aluminum

Copper

Lead

Zinc

Gold

Silver

Uranium
oxide

Diamonds

Stainless
Steel
Materials

Iron
Ore

Coal


Aluminum


Zinc


Copper


Gold


Iron
ore

Diamond


Marketing
&
Customers

•  Marke?ng
centers
of
mining
companies


•  Sell
products
at
the
most
advantageous
price
to
make
the
most
of
 their
intrinsic
value

•  Act
as
a
source
of
specialist
exper?se
 •  Iden?fy
value
opportuni?es


•  Customer
service:


•  Technical
assistance

•  Transporta?on,
e.g.
BHP
Shipping,
Rio
Tinto
Marine


•  Customers


•  Jewelry
makers.
E.g.
gold,
silver
and
diamonds
 •  Manufacturing/construc?on
companies.

•  E.g
Hyundai
Steel


•  Government

•  Other
retailers


BHP
Billiton

•  BHP
Billiton
is
a
global
mining,
oil
and
gas
company
headquartered
 in
Melbourne,
Australia
and
with
a
major
management
office
in
 London,
UK.
It
is
the
world’s
largest
mining
company
measured
by
 revenue.


•  BHP
Billiton
was
created
in
2001
through
the
merger
of
the
 Australian
Broken
Hill
Proprietary
Company
Limited
(BHP)
and
the
 Anglo‐Dutch
Billiton
plc.
(Billiton
origins
stretch
back
to
1860)
 •  It
is
now
a
dual‐listed
company
in
Australian
Securi?es
Exchange
and
 London
Stock
Exchange.


•  It
operates
a
wide
variety
of
mining
and
processing
opera?ons
in
25
 countries,
employing
approximately
41,000
people.
 •  It
has
opera?ons
on:
aluminum,
diamonds,
iron
ore,
petroleum,
 stainless
steel,
uranium,
etc.


•  Mines
in:
Algeria,
Australia,
Brazil,
Canada,
South
Africa,
USA


Rio
Tinto

•  Rio
Tinto,
now
headquartered
in
London,
UK
(and
Brisbane,
 Australia),
was
founded
in
1873,
when
a
mul?na?onal
 consor?um
of
investors
purchased
a
mine
complex
on
the
Rio
 Tinto
river,
in
Huelva,
Spain.


•  It
is
now
a
dual‐listed
company
in
Australian
Securi?es
 Exchange
and
London
Stock
Exchange.

•  It
is
one
the
world
leaders
in
the
produc?on
of
aluminum,
iron
 ore,
copper,
uranium,
coal
and
diamonds.

•  It
also
has
significant
opera?ons
in
refining,
par?cularly
for
 refining
bauxite
and
iron
ore.

•  It
has
opera?ons
on
six
con?nents
but
is
mainly
concentrated
 in
Australia
and
Canada.


Vale

•  Vale
is
a
Brazilian
mul?na?onal
diversified
metals
and
mining
 corpora?on
and
one
of
the
largest
logis?cs
operators
in
Brazil.
 •  It’s
the
largest
producers
of
iron
ore,
pellets,
and
second
 largest
nickel;
other
products
include
manganese,
ferroalloys,
 copper,
bauxite,
aluminum.


•  It’s
listed
on
stock
exchanges
of
Sao
Paulo,
New
York,
Paris,
 Hong
Kong
and
Madrid.

•  It’s
also
the
corpora?on
with
the
most
“contempt
for
the
 environment
and
human
rights”
and
was
named
world’s
most
 evil
company.


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Global
Indices


Global indices (February 1989=1)
9

•  Mining
companies

have
con?nued
to

outperform
the

overall
market.

•  While
the
industry

was
hit
hard
by
the

global
financial

crisis,
mining

companies
have
led

the
return
and

gone
beyond.



8
7
6
5
4
3
2
1
0
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Dow Jones
FTSE
HSBC Global Mining Index
Source: Bloomberg.

BCDC%)'?%/$'4%0$+)81+%8+%0#$%('/;$0%')%&/1?0#%
/$712+,$,6%133)$0%75%'%+2(7$/%13%8+*8,$+0)%0#'0%;$90%

Global
Indices

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-.$/%0#$%*12/)$%13%0#$%4')0%5$'/6%&417'4%$*1+1(8*%'+,%
914808*'4%0/$+,)%#'.$%*#'+&$,%0#$%8+,2)0/5:%"#$%(8+8+&%
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