Mining consolidation: where to now?

The mining sector has experienced an unprecedented level of mergers and acquisitions in the past two years. Factors driving the industry towards consolidation include the ready availability of finance, the conviction that size matters to investors, the rapid developments in electronic commerce and communications technology, the limited availability of desirable deposits and strategic shifts of direction by companies. However, the structure of sectors such as zinc-lead and nickel does not lend itself to such a trend, while consolidation in other mining sectors is likely to be held in check by a cultural divide between North American investors and those elsewhere. Gold company mergers often offer limited operational savings, so that joint ventures are more likely. There are disadvantages associated with dominating a mining sector, the benefits often fail to materialise and governments may interfere with consolidation.
The mining sector has experienced an unprecedented level of mergers and acquisitions in the past two years. Factors driving the industry towards consolidation include the ready availability of finance, the conviction that size matters to investors, the rapid developments in electronic commerce and communications technology, the limited availability of desirable deposits and strategic shifts of direction by companies. However, the structure of sectors such as zinc-lead and nickel does not lend itself to such a trend, while consolidation in other mining sectors is likely to be held in check by a cultural divide between North American investors and those elsewhere. Gold company mergers often offer limited operational savings, so that joint ventures are more likely. There are disadvantages associated with dominating a mining sector, the benefits often fail to materialise and governments may interfere with consolidation.