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  3. Read the article below about mining mergers and the questions on the opposit

Read the article below about mining mergers and the questions on the opposit

游客2025-05-18  10
问题     Read the article below about mining mergers and the questions on the opposite page.
    For each question(13-18), mark one letter(A, B, C or D)on your Answer Sheet.
                Three middling mining firms bet on scale and scarcity
    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 Falconbridge, 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 recession comes.
    That could be true of the proposed merger too. 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 2008, 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 fluctuations 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 in recent years.
    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. [br] What problem do investors think Phelps Dodge is facing?
选项 A、The price of nickel and copper are also falling.
B、Its shares fell as a result of the merger.
C、It promises to buy the shares back in the wake of the merger.
D、It was under the pressure of being taken over.
答案 D
解析 题目意为：“投资者认为Phelps Dodge公司正面临着什么问题?”原文第六段引用分析家的观点，即Phelps Dodge公司自身面临被收购的困境，因此采用并购其他公司的办法自救。进而分别说明了投资者也有这样的怀疑。然后举出Phelps Dodge公司股票降低8％的例子来证实。最后一段转而指出镍和铜的价格暴涨。最后指出The moremoney that mining firms spend buying one another，rather than exploring for anddeveloping new mines，the likelier that is．即：矿业公司用于并购的花费越多，而不是去开发新矿井，就越有可能成功，因此Phelps Dodge寄希望于并购，以解决自身将被收购的问题。含意与D项相吻合。
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