MINING & MINERALS
07
Introduction Three main categories of the mining industry are precious metals and gemstones, industrial and base metal mining and nonmetal mining The mining industry consists of junior miners, which are smaller companies engaged in the exploration of new mining deposits, and major mining companies such as Rio Tinto (RIO) and BHP Billiton (BHP) Many junior mining companies that make large discoveries are eventually acquired by a major mining company that has a large portfolio of claims and thus able to finance large-scale mining operations. Compared to major mining companies, junior mining companies are usually riskier ventures and are subjected to more volatility. Overall, high barriers of entry exist in the form of high capital requirements, rights to develop a resource, regulations, natural economies of scale and capacity to market commodities to major export markets.
66