Basic economics / Основи на икономиката: Chapter 13 - Time and risk

Now, Murrin Murrin is an investor favorite. Shares of the company that runs it. . .have more than tripled in the past year, and some analysts see room for more.

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The surprising turnaround highlights a central fact of the current commodity boom: With prices this high—especially for nickel—even technically difficult or chronically troubled projects look good. Nickel is most widely used to make stainless steel.{474}

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Although the reserves of natural resources in a nation are often discussed in terms of physical quantities, economic concepts of cost, prices, and present values must be considered if practical conclusions are to be reached. In addition to needless alarms about natural resources running out, there have also been, conversely, unjustifiably optimistic statements that some poor country has so many billions of dollars’ worth of “natural wealth” in the form of iron ore or bauxite deposits or some other natural resource.

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Such statements mean very little without considering how much it would cost to extract and process those resources—and this varies greatly from place to place. Extraction of petroleum from Canada’s oil sands, for example, costs so much that until recent years the oil there was not even counted in the world’s petroleum reserves. But, when the price of oil shot up past $100 a barrel, Canada became one of the world’s leaders in petroleum reserves.

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