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Asian miners expect greater centralisation

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World Coal,

The majority of Asian miners expect greater centralisation of procurement over the next two years, according to a new survey from Timetric’s Mining Intelligence Centre.

In a recent survey of over 100 Asian mine managers, respondents were asked if they expect the level of centralisation of procurement to change over the next two years. Over 52% of respondents expected more centralisation over this period, with this share increasing to 58% for the largest companies with revenue over US$1 billion.

There is an increasing trend among the largest mining companies to move more purchasing to corporate head offices rather than at each mine as a result of companies looking to consolidate suppliers and benefit from global agreements. For example, Rio Tinto and BHP both have global supply agreements in place for heavy mobile equipment, with Komatsu and Caterpillar respectively.

Overall fewer than 10% of respondents nominated that centralisation would be decreasing at their company, although this was 12% for the smallest companies, who may only have one or two operations in their portfolio and experience little or no benefit in centralising. Moreover, fewer than 40% of respondents expect centralisation to be stable.

Maintenance services is one area in particular where centralisation is expected to increase by the largest companies, with 60% of respondents from large companies nominating this area for greater centralisation, followed by plant and heavy equipment.

Adapted from press release by Joe Green

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