Rio narrows gap with Anglo

Rio Tinto continues to gain ground on Anglo American in its quest for first place among global mining companies, as ranked by the Raw Materials Group in Who Owns Who in Mining 2001.

The U.K.-based titan has grown significantly since it claimed Ashton Mining out from under the arms of De Beers Consolidated Mines, shortly after it acquired Australia’s North.

At the same time, it must be noted that, over the past decade, Anglo has managed to turn a decreasing market share into growth.

In 2000, both companies benefited from a strong increase in the price of copper and from sharp increases in their copper production. Anglo also benefitted from strong growth in the value of its diamond producers via De Beers and partners. As for Rio Tinto, the report states that if the major continues to grow as aggressively as it did in 2000, it might become the world’s largest mining company.

The competition for third and fourth place is equally intense, with the former currently held by Brazil’s iron ore giant Companhia Vale do Rio Doce (CVRD). In 2000, the company assumed control of Samitri from international steel magnate Arbed, and it will continue to grow in 2001 with the takeover of Brazil’s Ferteco. At the same time, fourth-place BHP has been consolidating; its share of total world value in 2000 remained the same as in 1999, and it has been overtaken by CVRD.

The global mining industry was once again swept by mergers and acquisitions in 2000. The results of increased concentration in the industry are now becoming more visible. The 10 largest companies’ share of the total value of global non-mineral fuel production increased to 33% in 2000 from 29.4% in 1999.

Meanwhile, the proposed merger between BHP and Billiton would, if approved, accelerate the strong progress made by the U.K.-based company over the previous few years. The merged company would control roughly 4.5% of the total value of non-fuel mineral products and rank third, between CVRD and Rio Tinto.

The losers in 2000 were New Orleans, La.-based Freeport-McMoRan Copper & Gold, which produced less gold and copper from its Grasberg operation in Indonesia, and Noranda, which gave up control of Battle Mountain Gold’s silver and gold production and watched the subsequent decline in copper production. Both companies dropped out of the top 10 for the year.

Who Owns Who In Mining 2001 is available from Roskill Information Services at a cost of US$780. E-mail: info@roskill.co.uk. The Raw Materials Group is based in Stockholm, Sweden.