Managing metal price risks

CIM Bulletin, Vol. 76, No. 858, 1983

KEITH C. HENDRICK, President, Noranda Sales Corporation Ltd. Toronto, Ontario.

Metal prices are frequently the most critical and least predictable element in determining the profitability of mining operations. Short-term fluctuations can be offset in varying degrees by hedging or other market actions. Such solutions are not practical for the longer term. The paper investigates the nature and extent of metal price risks and evaluates methods to reduce them.
Keywords: Risk management, Mineral economics, Hedging, Metal prices, Markets, LME COMEX.