With reference to MM, describe two features of a merger (lines 20–22).

Explain the strategies used by MM to achieve sustainability.

Answers could include:

• Two or more businesses join together (Chilmin and MM in this case)
• The result is another single business, in this case retaining the name Megamin Mining
• The Directors made up of people from both businesses (in this case the two great grandchildren and three Chilean shareholders and two workers’ representatives
• Generally mergers are friendly (in this case it was by agreement)
• This type of expansion occurs when two businesses become integrated by joining together and forming a bigger combined business. The owners of two businesses agree to join their firms together to make one business
• They can take advantage of synergies.

Accept any other reasonable description.
Award [1] for each feature up to a total of [2].
Award [1] for putting the feature into context up to a total of [2].

PLEASE NOTE FOR 2024 exams onward: The concept of sustainability will be assessed in the internal assessment for HL/SL only. Related parts of this multi-part question may be used for external assessment practice.

Refer to Paper 1 markbands for May 2016 forward, available under the "Your tests" tab > supplemental materials.

Sustainability has three dimensions: environmental (ecological) sustainability, social sustainability and economic sustainability.

Environmental sustainability

Most of MM’s strategies are concerned with environmental sustainability and include:

• Carbon offsetting
• Supporting research to reduce use of harmful emissions
• Reviewing MM’s own practices to get more energy efficient production methods
• Improved targets
• New environmental policies
• Switching to lithium for electric cars

Social sustainability

• “MM is reducing its operations in Alberta in response to Canadian concerns about the impact of the industry on First Nations (indigenous) peoples” (lines 60-61)
• Fairness of working conditions and other employment practices in different countries (incl. safety and pay issues in Egypt): no clear strategy in place, however “MM ’s board is concerned”

Economic sustainability

• To achieve economic sustainability, MM diversified a lot over the years (e.g. when they invested and expanded into property esp. the hotel division).
• Regarding the current problems with the hotel division (which does not seem economically sustainable) MM is “conducting primary market research to help identify methods to increase hotel bookings” (line 81).
• Regarding the Egyptian mine (which is operating at a loss, which is not economically sustainable) MM does not have any strategy in place yet, but “is exploring ways in which it could reduce its costs” (line 107).

Accept any other reasonable point about MM’s sustainability strategies.
Explanation/analysis should come from discussing these in relation to the situation that MM is in.

Marks should be allocated according to the paper 1 markbands for May 2016 forward section A.
Award maximum 2 marks for only explaining one strategy.
Award maximum 3 marks for a theoretical answer or an answer that describes two (or more) strategies without explaining them.
Award maximum 5 marks if the explanation of two strategies or more is mainly descriptive but in context.

Most candidates were able to demonstrate some understanding of mergers. The question required candidates to describe two features of mergers. Most candidates considered the consequences of mergers having taken place rather than a feature of them. Whilst there could be some overlap on some points it was often difficult for candidates to gain the second mark for context.

Candidates were generally able to show good understanding of sustainability and relate the concept to Megamin Mining (MM). Strategies were often well discussed. Some good responses were able to split sustainability into three dimensions—environmental; social and economic, but many candidates only copied in their answers elements from the case study, without much added value.