Breaking up is easy to do: Potential ‘Inco’ IPO highlights mining sector’s new reality

There was a lot of concern among mining companies about being left behind if they didn’t take part in the consolidation wave. That led to plenty of poor decisions.

Today, the “bigger is better” mantra no longer exists. The industry is struggling to deal with weak commodity prices, and CEOs have much different priorities — lower costs, lower capital spending, strong liquidity and free cash flow growth.

That has forced them to look at what was unthinkable a few years ago: breaking apart the giant monoliths their predecessors created.

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One comment

  • Michael C. Hargett

    Excellent observation Victor!! As our society moves to specialization, advanced materials, and enhanced performance, the commodity concept looses value. “Bulk” production will have a role but the value of the final product is driven by Quality of performance of the material.

    The concept of custom performance for a final product is built upon choices for the material components for the product. This extends to structural substrates that have functionality, coatings that have electrical performance, and conformal configurations for energy storage.

    In addition, direct manufacturing methods are proven to provide economy, speed, and substantial environmental benefit to remove the value of the “bulk” or commodity provider.

    Breaking up the giant monolith will not generate value for investors or consumers.


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