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  3. First it was metals, now it is the companies that mine them. In May prices for copper, nickel and other metals rose to record le

First it was metals, now it is the companies that mine them. In May prices for copper, nickel and other metals rose to record le

admin2011-02-11  33
问题   First it was metals, now it is the companies that mine them. In May prices for copper, nickel and other metals rose to record levels, although they have since fallen a bit. Now three mining firms are proposing the most expensive merger in the industry’s history. The $ 40 billion deal, in which an American company, Phelps Dodge, plans to take over two Canadian ones, Inco and Faleonbridge, would create the world’s biggest producer of nickel, the number two in copper, and the fifth-ranked mining firm overall. The records may not stop there:two other mining firms, Xstrata and Teck Cominco, had previously bid for Falconbridge and Inco respectively, and could make further offers.
  Soaring commodities prices have left mining firms flush with cash and keen to expand. One Way would be to search for more metal in the ground, instead of on the stockmarket. But organic growth is expensive at the moment; as firms rush to increase their output to take advantage of high prices, every conceivable input, from engineers to mining trucks’ huge tyres, is in desperately short supply. Developing new mines is also slow. Mining executives worry that projects that get the go ahead when prices are high will not look so attractive when the next slump comes.
  That could be true of the proposed merger too, of course. Phelps Dodge offered a premium of 23% over the price of Inco’s shares and 12% over Falconbridge’s. Those shares, in turn, have been rising for several years along with the firms’ wares--nickel, for the most part, at Inco, and nickel and copper at Falconbridge.
  The bosses of the firms insist that the mark-up is justified, for several reasons. For one thing, they reckon they can squeeze savings of $ 900m a year out of the combined entity by 2009, by sharing equipment and personnel among adjacent mines, for example, and pooling their marketing staff. More importantly, they argue that the size and diversity of the new company will make it less vulnerable to mining’s painful cycles, and so more attractive to investors.
  The biggest and most diversified mining companies, such as BHP Billiton and Rio Tinto, do boast higher share valuations. They produce everything from aluminium to zircon, and so are less susceptible to flutuations in the price of any particular metal. By the same logic, the more mines a firm is running or developing, and the more countries it operates in, the less risk each individual project poses to profits.
  The merged trio will certainly have a broader geographical spread, with mines in five continents. But its main projects, in stable places like the United States, Canada and Chile, never seemed that risky in the first place. Furthermore, despite having sidelines in cobalt and molybdenum, the new firm’s fortunes will depend chiefly on the price of copper and nickel--two of most volatile metals of late.
  Some analysts mutter that Phelps Dodge embarked on the merger chiefly to save itself from being taken over. Investors seem to share their doubts: Phelps Dodge’s shares fell by 8% after it announced the deal, despite a simultaneous pledge to spend $ 5 billion on a share buy-back scheme once the merger is concluded.
  On the other hand, the price of nickel and copper jumped on the news. Traders seem to have assumed that the companies would have contemplated such an expensive deal only if they thought that metals would remain in short supply for some time. The more money that mining firms spend buying one another, rather than exploring for and developing new mines, the likelier that is.  
To avert the risk of profits, mining companies should take all the following measures EXCEPT
选项 A、a complete range of products.
B、business in different countries.
C、numerous mines to operate.
D、stable prices of certain metals.
答案D
解析 细节题。由题干中的risk和profits定位至第五段，这里提到矿业公司保证盈利的几个方法：它们的产品包罗万象，从铝到锆石不一而足，故而不易受到某一种金属价格波动的影响，同理，一家公司运营或开发的矿井越多，并且业务涉足越多的国家，某一项工程面临的利润风险就越低。可见，[A]、[B]和[C]是文章提到的细节，只有[D]未提及，故为答案。
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