Global Mining Industry: Porter’s Five Forces Analysis

The financial crisis of 2008 and 2009 had a major impact on the global mining industry. However, the year 2010 saw the industry recover strongly and this growth rate continued well into 2011 and the first half of 2012 as well. With the global cost of commodities going up and governments around the world tightening regulations on the mining industry, mining companies are expanding in order to meet these challenges. The global mining industry has a strong outlook in its favor though the industry is likely to continue consolidating in the coming years.

Aruvian Research analyzes the Global Mining Industry in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.