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