An Oil Company Looks At Mining

The title of this session seems to have been picked especially for this paper. It is 1984, it is the morning after, and there is one monumental hangover among many if not most of the oil companies that have invested in mining in the past decade or so. How an oil company looks at mining depends on what time period you are talking about. A few years back around the time of investment this is what they were probably looking at: 1. A balance sheet of their own that was beginning to go wild, with many of their commodity prices having already seen increases of two, three, or four fold, and with no end in sight. 2. A need to invest their earnings someplace fast before the stockholders or the government got too interested. And that someplace should be in an industry where their own management skills could be applied. (Only a true cynic would suggest that this is a form of job security) 3. In mining there was an industry amazingly similiar to their own, one working with non-renewable natural resources, dealing with the same types of government agencies, and having the same type of critics and pressures from the general population. 4. An industry that was somewhat backward as compared with their own, and one where a generous ration of the capital and management skills so handsomely bestowed upon the oil industry could be used to great advantage.