Eric Johnson

There's famously companies that have been on the wrong side of hedging contracts.

So some of your listeners might remember a company called Pazminco, a lead and zinc miner.

Pazminco, what were they?

Nickel?

Lead and zinc.

Now that

That collapsed, went into voluntary administration in 2001.

Now, they had all these hedging contracts in place, terribly out of the money on that.

And so for everything that they were digging out, they were losing money, digging out of the ground, they were losing money on.

The other one famously, Newcrest, was a gold miner, and it went through a tough time for a long time selling all these out-of-money hedging contracts.

Gold price was soaring, and Newcrest just wasn't making money on the back of that.

Yeah, look, they've really broken away from Australia.

But don't forget, Australia is in the middle of, not in the middle, well, we're right in,

We're right into a interest rate rise cycle.

So that is putting a real dampener on our local market.

There is a prospect of a rate rise in early May.

The market is still penciling in potential for another one later this year.

So that's a pretty aggressive move as the central bank tries to stamp out inflation in the economy.

The United States, on the other hand, they're in a rate halt cycle.

So their cash rate is on hold.