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<p align="justify">Anglo American Plc is a British multinational mining company based in London, United Kingdom, and Johannesburg, South Africa. It was formed in 1999 by the merger of Anglo American South Africa and Minorco (Anglo American, 2020). It is been primary listed in the London stock market and secondary listed in the Johannesburg Stock market. It operates Diamond, copper, coal, iron ore, nickel, and manganese. It owns 85% of De Beers Group, which is the world&#8217;s leading diamond producer (Angelo American, 2020). It is the largest producer of platinum in the world. Anglo American own mines in South Africa, South America, and Australia. Porter&#8217;s five forces model is used to identify threats and business opportunities faced by Anglo American&#8217;s in the mining industry.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The mining industry is very competitive due to the limited mining companies and limited available resources. Few conglomerates control the majority of business share in the world. The biggest rival of Anglo American is Rio Tinto Group, Newmont Mining, and AngloGold Ashanti. Rio Tinto Group is an Anglo Australian mining giant. It posted annual revenue of $40,522M (Fortune, 2019) for the year 2019. AngloGold Ashanti is a multination mining company based in Johannesburg, South Africa. It posted annual revenue of $3,525M (Statista, 2020). Anglo American posted revenue of $27,610M (Fortune, 2019). It holds the edge over its rival due to diversified products. It produces around 40% platinum of the world&#8217;s output. It doesn&#8217;t depend solely on coal production. These factors provide Anglo American edge over their rivals.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The industry faces the threat of substitute if there are any alternative product available in the market. The future of the overall mining industry is safe. The only real threat is the use of technology and the voice to curb the production of coal and uranium. The mining industry is opting to use technology for better data analyzing and core processing. The industry is analyzing better ways to incorporate technology in business (Deloitte, 2020). Coal is the major source behind the production of energy. In recent years companies are investing heavily in renewable energy resources such as wind energy and solar energy. It can affect the overall coal-related production of Anglo American. The overall threat level is low due to diversified mineral products.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The new entrant can provide a serious threat to any industry if it comes with an innovative alternative product. It cost less than available in the market. The mining industry has a very high entry barrier. The mining industry requires higher sunken investment and it requires to follow the framework set up by the regulator. The cost of compliance is way too much for a startup. Nowadays climate activist is pushing for strict restriction on the mining of coal and uranium. The limited resources of minerals also make it difficult to get a market share. Any newcomer will face strong retaliation from the market leaders. It is not possible for startups to cover the heavy cost and compete with well-established companies. The threat of new entrants at that moment is low.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The buyers hold negotiating powers if there are alternative products available in the market. In the case of mining products such as Diamond, platinum, and coal. The product available in the market is usually the same. The product is limited because the natural resources are not renewable. The buyer product like coal is directly linked to the production of electricity. The cost of the product can directly impact the economy of the country. Countries sign those contracts for a longer period. They can’t afford the cost of switching. They don&#8217;t hold any major power except guarantee of a good quality product. Similarly in any other mineral case, the market is concentrated. Buyers don&#8217;t have any other better options to switch. The overall bargaining power of buyers is low.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">The supplier in the mining industry holds high bargaining ground in negotiating the deal. The industry is concentrated but mining suppliers are more than the need of the industry. The suppliers usually are mining equipment companies. The cost of equipment is high. The switching cost to other suppliers is way too much higher. The supplier tends to supply cross-industry business as well. Switching between the productions of makes it difficult to cover up the cost. Industries need technical support from the suppliers on-site for routine checkups and maintenance. They also need a supplier for the up-gradation of equipment after purchasing tithe mining companies don&#8217;t afford to lose their precious equipment. The supplier, in that case, holds higher power in negotiating the deal.</p>
<h2 align="justify">References</h2>
<p align="left">Anglo American. (2020). About us, History. Available at: https://www.angloamerican.com/about-us/history#/EN/category-complete-history/detail-a-business-built-on-values<br />
Anglo American. (2020). Products, Diamonds. Available at: https://www.angloamerican.com/products/diamonds#/projects-operations-offices-headquarters/diamonds<br />
Deloitte. (2020). Modernizing core technologies. Available at:https://www2.deloitte.com/us/en/insights/industry/mining-and-metals/tracking-the-trends/2020/implementing-new-technology-in-mining.html<br />
Fortune. (2019). Global 500. Available at: https://fortune.com/global500/2019/rio-tinto-group/<br />
Fortune. (2019). Global 500. Available at: https://fortune.com/global500/2019/anglo-american/<br />
Statista. (2020). AngloGold Ashanti&#8217;s revenue from 2009 to 2019. Available at: https://www.statista.com/statistics/249008/anglogold-ashantis-revenues/</p>
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