Over the last three decades, as Wall Street and management theorists encouraged companies to focus on their core competencies, the mining and metals industry became less vertically integrated.
Recent events however have indicated a growing trend towards the vertical integration of yesteryear.
Vertical integration strategies vary, but recent trends show that it has been largely upstream as metals companies and end-users seek to add mining assets, and miners add infrastructure, reintroducing the question of ‘what makes a mining company’?
Vertical integration trends have been shaped by an increase in global demand for metals and the growing importance of securing stable supplies of increasingly scarce resources. Metals companies have looked to vertically integrate primarily to secure alternative sources of raw material supply to facilitate their own continued operation. Additional objectives often include gaining greater control over the price of production inputs and to provide future growth prospects.
Integration exposes...