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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: sea_urchin who wrote (10450)2/8/2001 1:35:42 PM
From: goldsheet  Read Replies (1) of 81220
 
The way the mining business works actually makes sense to me.
Folks that can't believe it or accept it have had great difficulties over the last five years.
Here's my most recent GPM summary:

"Firms tend to do what they think is in their own best interest, not what benefits the industry. Therefore, as long as the mines are profitable they will continue to produce as much gold as efficiently as they can. This industry remains way too fragmented for anything like a cartel with the ability to set prices. Metal miners must take the price consumers are willing to pay in the commodity market, or a little bit more if they have hedged successfully. I'm sorry if I sound redundant to the regulars with my focus on supply/demand numbers but just because production rises due the higher prices does not automatically means that production goes down when prices drop. The time lag is long - we are five years past the price peak and primary mine production is just starting to go flat. The industry is just too capital intensive to walk away from projects that cost hundreds of million to billions of dollars. As long as cash flow remains positive production continues, which means all the way down to cash cost per ounce. "

REF: Message 15320085
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