Phelps Dodge 2005

As the price of copper reaches a historic high, should one of the world's leading copper producers invest in opening a new high-cost US mine?
Bruce Greenwald  | Fall 2009
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It's late 2005 and the price of copper has reached a historic high of $1.25 per pound, prompting Phelps-Dodge Corporation to consider investing $550 million in opening a new Arizona mine. Phelps Dodge realizes it would likely need to shut the mine if copper dips below $0.75 per pound since the mine would produce no net profit at that price. In this case, students consider demand and supply for copper consumption and study 10 years of financial results for Phelps Dodge, copper prices, and worldwide copper production to discuss the economic viability of the investment.

Case ID: 070301

This case is used in core curriculum

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