Case Study Western Mining.docx - Case Western Mining\u2019s Economic Exposure Management Western Mining Company(WMC is an Australia-based minerals producer

Case Study Western Mining.docx - Case Western Miningu2019s...

This preview shows page 1 - 2 out of 2 pages.

Case: Western Mining’s Economic Exposure Management Western Mining Company (WMC) is an Australia-based minerals producer with business interests in 19 countries. It is the world’s third largest nickel producer, owns 40 percent of the world’s largest alumina producer (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 globally competitive. Most commodities produced by Australian mining companies, including WMC, are exported and priced in US dollars. Thus, these companies would suffer significantly and their Australian dollar revenue would drop if the Australian dollar appreciated sharply against the US dollar. Given such an exposure, the conventional wisdom held that borrowing in US dollars would provide a “natural” hedge against their dollar revenue stream. When forward markets began to develop in the mid-1970s, Australian mining
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Winter '20
  • MUNI
  • United States dollar, dollar, ISO 4217, Canadian dollar

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes