单选题

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,Those shares 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 comparty will make it less vulnerable to mining's painful cycles, and so more artractive 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 and developing new mines, the likelier that is.

单选题 According to the author, three mining firms

【正确答案】 C

【答案解析】[题目考查点] 推理判断题，考查这三家矿业公司的举措。
[解题关键句] 题目意为：“在作者看来，三家矿业公司将怎样做”。文中第一段首先指出“…三家矿业公司提议进行矿业史上最昂贵的一次合并，其中美国公司Phelps Dodge计划收购两家加拿大公司，以成为世界最大镍生产商及第二大铜生产商，并且总排名第五的矿业公司。继而指出”…two other mining firms，Xstrata and Teck Cominco，had previously bid for Falconbridge and Inco respectively, and could make further offers.”即：另两家公司(Xstrata和Teck Cominco)之前分别对Falconbridge和Inco公司报价，可能会提出更高报价。因此，三家公司都打算并购别的公司，这与C项中的acquisition相对应，正确答案为C。

单选题 The author suggests that if the prices of the metal fall,

【正确答案】 D

【答案解析】[题目考查点] 事实细节题，考查金属价格与企业拓展业务之间的关系。
[解题关键旬] 题目意为：“作者暗示，如果金属价格下跌，将发生何种状况”。文中第二段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金属，而不是寄望于股市。但这种根本的发展在目前代价昂贵。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。

单选题 In the author's opinion, the price of the firm's metals rises because

【正确答案】 A

【答案解析】[题目考查点] 事实细节题，考查公司货物价格与股票价格之间的关系。
[解题关键句] 题目意为：“作者认为，公司货物即金属价格上涨的原因是……”，文中第三段指出，那同样适用于拟议中的合并(指第二段所说，当金属价格降下来人们将不再关注那些已获许可的项目)，Phelps Dodge在Inco公司股价基础上加价23%，在Falconbridge公司股价基础上加价12%。反过来，那些股票有数年的时间随着公司货物的价格一直在上涨，在Inco公司，绝大部分货物是镍，在Falconbridge公司则是镍和铜。因此，金属价格上涨的原因是公司在股票原有价格基础上加价，这与A项内容相吻合。其中，第三段中的“…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…”为信息关键句。文中的premium与题中的an additional amount of money相对应。

单选题 In the fourth paragraph, the bosses believed that it is reasonable to give an increase in the price because

【正确答案】 B

【答案解析】[题目考查点] 事实细节题，考查提价合理的原因。
[解题关键句] 题目意为：“在第四段中，公司老板认为提价合理的原因是……”，文中第四段阐述了两方面原因，一是他们估计截止到2008年，通过共用临近矿业公司的设备和市场营销人员，一年可以从公司联合体中设法节余九亿美元。更重要的是，他们认为新公司的规模和多样化经营可以使其不受矿业的困难周期太大影响，而这会对投资者更具吸引力。文中的squeeze savings对应B项中的have more profit,文中的attractive to investors与B项中的appeal to investors表意相吻合。

单选题 According to the author, why will some companies boast higher share valuations?

单选题 What problem do investors think Phelps Dodge is facing?

【正确答案】 D

【答案解析】[题目考查点] 细节理解题。考查公司面临的问题。
[解题关键句] 题目意为：“投资者认为Phelps Dodge公司面临什么问题?”文中第六段引用分析家的观点，即Phelps Dodge公司自身面临被收购的困境，因此采用并购其他公司的办法自救。进而分别说明了投资者也有这样的怀疑，然后举出Phelps Dodge公司股票降低8%的例子来证实。最后一段转而指出镍和铜的价格暴涨。最后指出“The more money that mining firms spend buying one another, rather than exploring and developing new mines, the likelier that is.”即：矿业公司用于并购的花费越多，而不是去勘探研发新矿井，就越有可能成功，因此Phelps Dodge寄望于并购，以解决自身将被收购的问题。含义与D项相吻合。