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  3. Read the article below about mining mergers and the questions on the opposite page. For each question(13-18), mark one lette

Read the article below about mining mergers and the questions on the opposite page. For each question(13-18), mark one lette

admin2015-04-23  1
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.
The author suggests that if the prices of the metal fall,
选项 A、the firms will suddenly have plenty of money for a short time.
B、it will be difficult for the firms to grow larger in size.
C、the firms will try to increase their production.
D、people will not focus on the projects that are given permission.
答案D
解析 题目意为：“作者暗示，如果金属价格下跌，将发生何种状况”。原文第二段中指出矿产品价格飞涨，使矿业公司拥有充裕的现金，并热衷于扩大规模。一种办法就是发掘更多的金属，而不是寄希望于股市。但这种根本的发展在于目前代价昂贵。开发新矿也很缓慢，矿业主管担心在价格高时得到许可的项目一旦面临经济衰退，将不再对人们具有吸引力。由此可见，在经济衰退时，即金属价格下跌时，人们将不再关注那些获得许可的项目，文中的go-ahead与D项中的“that are given permission”表意相吻合。
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