AFX News Limited
Boliden hedges 70 pct of 2007 exposure to copper at 35 pct below today's price
01.03.07, 8:02 AM ET
STOCKHOLM (AFX) - Swedish mining company Boliden AB said it has hedged 70 pct of its price exposure to copper in 2007 at 3,966 usd a tonne, 35 pct below today's price of 6,120 usd.
The company said the hedging is part of a broader programme to extend its hedging of copper, gold, lead and silver prices by about two years to 2010 in order to secure payments for the expansion of its mining in Aitik.
Copper is the company's main revenue earner. For 2008 it is hedging 70 pct of its price exposure to the metal at 6,394 usd per tonne, and in 2009 at 5,920 usd per tonne.
Similarly the company has hedged 72 pct of its exposure to gold in 2007 at 578 usd an ounce, 70 pct of its 2008 exposure at 665 usd an ounce, and 70 pct of its 2009 exposure at 702 usd an ounce.
The price of gold today is around 634 an ounce.
With lead the company has hedged 49 pct of its exposure at 1,191 usd a tonne for 2007, 50 pct of its exposure at 1,315 usd in 2008, and 50 pct at 1,252 usd in 2009.
Lead is trading at around 1,695 usd a tonne today.
The company is hedging 51 pct of its price exposure to silver in 2007 at 9.26 usd an ounce, 70 pct at 13.15 usd a ounce in 2008 and 70 pct at 14.59 an ounce in 2009.
Silver is trading at 12.90 usd an ounce today.
Boliden is leaving its exposure to zinc totally unhedged.
'The hedging creates a better balance in our operations from a long-term perspective when we can secure significant parts of the investment in Aitik,' said Boliden's chief executive Jan Jahansson.
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