Case: Western Mining’s Economic Exposure ManagementWestern Mining Company (WMC) is an Australia-based minerals producer with business interests in 19countries. It is the world’s third largest nickel producer, owns 40 percent of the world’s largest aluminaproducer (Alcoa World Alumina and Chemicals), and is a major producer of copper, uranium, gold,fertilizer, and talc. WMC builds its business on large, low-cost, and long-life assets that are globallycompetitive.Most commodities produced by Australian mining companies, including WMC, are exported and pricedin US dollars. Thus, these companies would suffer significantly and their Australian dollar revenue woulddrop if the Australian dollar appreciated sharply against the US dollar. Given such an exposure, theconventional wisdom held that borrowing in US dollars would provide a “natural” hedge against theirdollar revenue stream. When forward markets began to develop in the mid-1970s, Australian mining
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United States dollar,dollar,ISO 4217,Canadian dollar