Mine 2011: The game has changed

The super majors step out
During 2010 we saw the top three miners (BHP Billiton,
Vale and Rio Tinto) step clear of the rest of the industry.
The market capitalisation of third place Rio Tinto is
double the size of the next largest player, China
Shenhua, which declined 25% in value during 2010. At
the top, BHP Billiton’s market capitalisation further
strengthened, putting it clearly above the rest. Price and
production increases in iron ore were major drivers of
the growth by the top three.
Top 3 market capitalisation ($ billion)—31 December
250
200
150
100
50
The drive for growth
Strengthening demand for primary resources,
predominantly from emerging economies, has been the
big story for 2010. End user need for minerals shows no
sign of letting up, especially given the targeted 7% GDP
growth included in China’s recently released 12th Five
Year Plan. The plan included significant infrastructure
spend, such as the construction of 30,000 km of new
railway line.
At the same time, there is the challenge of declining
extraction grades, more geographically remote and/or
politically challenging regions and the increasing scale
of projects required to generate economic returns.
Supplying sufficient resources to meet the growing
demand is a key challenge for the industry.
The world continues to need raw materials and
mining companies’ results show this. However, with
pressures from a growing number of stakeholders on
how to distribute the benefits, miners have the challenge
of delivering on their social commitments and ensuring
their contributions are both appropriate and properly
understood.
0
BHP Billiton
Vale
Rio Tinto
2005
2006
2007
2008
2009
2010
Source: Capital IQ.
Mine–The game has changed 5