Creating competitive advantage in mining: An illistrative comparison with the oil industry

This paper discusses several management practices from the oil industry to support the proposition that financial performance in natural resource-based businesses relates more to upstream resource-related activities than downstream industrial-type activities concerned to production management. Outcomes of two studies conducted at the University of Queensland for nine oil and gas companies and 14 mining firms corroborated that those that excelled in increasing reserves were in turn those that delivered greater value to shareholders. The oil industry. historically more flourishing than mining. counts on management practices that focus more on the upstream segments of the business compared to the traditional downstream focus of mining. This paper appraises several ideas from these two strategies to propose and conclude that a new organisational framework is what mining may need to improve its competitive advantage.