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Press ReleaseFrontier Strategy Group Managing Director Alex Turkeltaub Discusses Consolidation in the Mining Industry on CNBC CAMBRIDGE, Mass. – (BUSINESS WIRE) – November 27, 2006 – Frontier Strategy Group Managing Director and natural resources expert Alex Turkeltaub discussed consolidation in the mining industry and the recent Freeport McMoRan bid for Phelps Dodge Corporation on CNBC's "Street Signs." Reflecting on the possibility of further consolidation in the mining sector, Turkeltaub argued that the wave of mergers in the industry will continue. "There are two key forces driving further consolidation in the mining industry," Turkeltaub noted. "First, in a world of resource nationalism, where companies have to negotiate with increasingly protective governments, size matters - larger players will be more successful at getting access to resources, particularly in emerging markets. Second, the cost pressures on the industry are such - around energy, labor, and other key inputs - that scale is necessary to control these costs effectively. The oil sector went through a similar process over the past decade and now it's time for the mining industry to catch up." Turkeltaub also discussed the impact of China and its booming economy on commodity prices and mining industry trends. "The fundamental premise of those who believe that commodity prices will remain above historical levels for some time to come is that every year, 20 million people in China will continue to move from the countryside to the country's booming cities. This trend is likely to continue for at least the next decade and will drive demand for commodities as construction and other metal-dependant industries have to accommodate this enormous urbanization." Finally, Turkeltaub noted that while mining industry consolidation is likely to continue, this does not mean that the big existing players will be the ones making all of the acquisitions. "While big players obviously have an advantage in seeking to acquire rivals, what the Freeport - Phelps Dodge deal demonstrates is that smaller companies such as Freeport can find the financial backing to acquire larger rivals. Similarly, Xstrata, which was a tiny company only a few years ago, is now one of the largest mining companies in the world. The money is out there to help aggressive smaller players make interesting deals." About Alex TurkeltaubAlex Turkeltaub is a Managing Director at Frontier Strategy Group and heads the Former Soviet Union and Middle East Mining & Energy practice at the Frontier Strategy Group. About Frontier Strategy GroupFrontier Strategy Group is a global consulting and advisory firm focused on the natural resources industries. Key practices include country-entry and growth strategies, M&A advisory, political risk assessments and permitting assessments. The firm is based in Cambridge, Massachusetts, and has offices in New York and Washington DC. Media Contact:
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