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* Every little helps as miners seek to boost profitabilty
* Groups try to extract maximum value from mine to consumer
* Some previously wary miners move into commodity trading
* Glencore model can offset volatile commodity markets
* GRAPHIC - Mining stocks recover http://reut.rs/2hu85v0
By Barbara Lewis and Gavin Maguire
LONDON/SINGAPORE, Dec 20 (Reuters) - The world's big mininggroups are sharpening their marketing strategies in apost-crisis scramble for even tiny increases in profit, seekingmarginal gains much like cycling teams in the Tour de France orOlympic velodrome.
Anglo American, BHP Billiton andRio Tinto are using varying tactics to boostprofitability on commodities such as copper, iron ore and coal,as the traditional model of simply producing more is understrain and the recovery from a deep downturn remains tentative.
The one thing in common is a philosophy championed bycycling coach Dave Brailsford: achieve marginal gains in as manyareas as possible and the overall performance of the rider - orin this case the business - will improve significantly.
BHP and Rio Tinto, the biggest miners, have both appointedexecutives this year to extract the maximum value from everystage of their business process, from the mine to the consumer.
For BHP and Anglo American, the strategies include commoditytrading - although on a far smaller scale than their rivalGlencore, which began life as a pure trader and saysincome from this business helped it through the commodity slump.
Overall, the object is to help cushion the mining groupsfrom the kind of extreme price swings that the market hasexperienced in recent years.
"I am very confident that the culture changes we're buildingon will allow us to move away from this boom and bustmentality," Arnoud Balhuizen, BHP's new head of marketing andsupply, told Reuters.
The strategic shift, which began with the price crash thatknocked billions off the miners' earnings in 2015, has gainedmomentum this year despite a revival on commodity markets.
"Prices have lifted, but the world will remain a verycompetitive place and everybody will still be looking for thatextra dollar," one industry source said, speaking on conditionof anonymity.
Even after investors piled back into mining stocks thisyear, making them the biggest gainers on the London's FTSEindex, their prices are still barely back to where they werearound the start of 2015.
Chris LaFemina, a managing director of research at Jefferiesinvestment bank, said the new strategies were necessary but theywould not transform the miners' fortunes.
"In a bull market, companies would not have been worriedabout incremental margins through marketing, but now everyone isfocused on getting the maximum price and they can get a littlebit of extra margin over a lot of tonnes," he said. "Smallchanges are important at the bottom of the cycle and it stillmatters, but it's not going to change the investment case."
CUTTING OUT MIDDLE MEN
Balhuizen, who was appointed to his newly-created positionin May after more than a decade with BHP, said a traditionalfocus on selling large volumes through standard contracts mayhave been good for consumers, but not for producers.
Following zealous cost-cutting over the last two years, thenext stage was to assess every stage of the value chain. Thatled to the conclusion that the best price could be achieved ifbrokers were cut out, long-term contracts torn up and specificproducts delivered to specific consumers.
It's an approach that echoes Glencore's use of its networkof an estimated 7,000 customers to deliver a tailored service toclients willing to pay a premium over market prices.
Balhuizen offered the example of coal, the price of whichhas surged this year after steep falls in 2015. "You don't wantto sell too much coal to someone who doesn't value it, becausehe won't pay you for it," he said.
Mining groups have traditionally steered clear ofspeculative commodity trading as a source of income, reluctantto take on the levels of risk involved. This contrasts toGlencore, which remains an active trader despite becoming amajor producer when it merged with mining group Xstrata in 2013.
However, Balhuizen signalled a shift at BHP. The group givesno figures for how many marketing staff it employs, but he saidtraders - which he defined as "people who buy material on theirown account and take risk" - were among them.
VALUE QUEST
Anglo American also does some pure trading. While the groupdoes not disclose volumes, it has said it met a goal set in 2014that marketing activities should contribute $400 million in coreearnings by 2016.
This remains modest compared with Glencore, which expectstrading to account for $2.5-$2.7 billion of core earnings forthe full year.
Outside trading, Anglo American has also boosted platinummargins by as much as 5 percent. This followed the ending of adeal under which Johnson Matthey sold all its platinumdirectly to customers. Instead of selling at a discount to thespot market, it now it sells at a slight premium.
Rio Tinto says it does not trade but under its CEOJean-Sebastien Jacques, who took over in July, it has a newdivision to analyse the group's business and extract value atevery opportunity.
Steve McIntosh, who was appointed group executive of growthand innovation in July, told analysts in December the aim was tospan "the entire value chain from ore body to market" in pursuitof the extra dollar.
Rio's traditional big earner, accounting for roughly 60percent of core profit, has been iron ore, a high margin, bulkproduct.
GRAPHIC - Big Four iron ore miners http://tmsnrt.rs/2gkaM50
However, Jacques has put an emphasis on copper. This needsto be processed, and Rio is increasingly blending copper from avariety of sources as the best grade material is used up.
Rio began buying copper from other sources to fill itssmelter in the U.S. state of Utah because the quality of its ownores had declined. But the volumes are tiny - a few hundredthousand tonnes - compared with Glencore's copper trade ofaround 3.1 million tonnes per year.
RISK
While the strategies of Glencore and the rest overlap, thebig difference is the level of trading risk that the miners arewilling to take on.
Glencore has presented its trading business as the oppositeof risky in that it was a source of cash and stable earningseven when commodity prices were crashing.
GRAPHIC - Glencore's business model http://tmsnrt.rs/2ftX4Ll
Trading does not involve the huge capital expenditure andasset depreciation of mining, but needs credit and can go wrong.
Glencore relies on complex funding arrangements with around60 banks and sometimes investors are wary, with its shares amongthe biggest losers during the crash of 2015. But when all goeswell, its trading can generate cash even in the deepest slump.
Ultimately, the risk could be for Glencore, as more playersscramble for dwindling margins. However, Glencore investors sayit would take years for rivals to steal significant marketshare, and any gains for the others are helpful but onlyincremental.
"It's extremely difficult to compete with someone who hasthe key relationships, logistics and infrastructure in placealready," David Neuhauser, managing director at LivermorePartners, a Glencore shareholder, said.
"As with any competitive situation, it could potentiallyerode margins or volume, but I'd be hard pressed to see how theycould lose out to the others."
(Additional reporting by Dmitry Zhdannikov in London and JohnTilak in Toronto; editing by David Stamp)
