Incorporating China into the Global Mining Supply Chain

Cost inflation has been among the defining trends of the mining industry in recent years. Cost increases have been driven by several factors, including more remote mining locations, lower grade ores, tighter regulation, and a skilled labour shortage. While for most of the past decade elevated commodity prices masked the impact of cost inflation on mining firms' earnings, the prices of many mining commodities have fallen significantly below the peaks attained in 2010 and 2011. This combination of rising costs and falling revenues has thinned the margins of firms across the industry, spurring companies to place a renewed emphasis on capital discipline. Extensive research has examined how global sourcing, low-cost country sourcing, and more specifically sourcing from China can enhance the competitive advantages of firms in several industries. However, despite an increasing interest in the topic, few studies have focused on the mining industry specifically. This book looks to fill that gap by exploring how mining firms can build lower cost competitive advantages by incorporating China into their global supply chains.