Boliden Counts on Stable Electricity as War in Iran Raises Oil Prices
Boliden's Energy Strategy Amid Global Oil Price Volatility
Boliden's Approach to Energy Sources
April 28 (Reuters) - Boliden does not hedge oil prices and given its use of other energy sources, the Swedish miner is in a less bad position than many rivals, CEO Mikael Staffas told Reuters on Tuesday.
Impact of the Middle East Conflict on the Global Economy
The global economy is facing a tangible strain from the energy shock triggered by the war in the Middle East, with companies across industries grappling with soaring production costs and weakening activity.
Boliden's Competitive Advantage
• "We are using relatively more electricity and less oil than many of our competitors," Staffas said
• "Our electricity price is not linked to the oil price, it's stable," he added
Oil Price Hedging and Financial Implications
• The decision not to hedge the oil price is "very conscious", as often when oil prices go up, so do metal prices, he said
• Oil prices will still be seen in transportation costs and purchases of diesel and chemicals
Additional Financial Effects
• However, Boliden should see positive effects from exchange rates, metal prices and some by-products, including sulfuric acid, Staffas said
• Boliden does not have any supply coming out of the Middle East and it does not sell anything in the region
• The group, which benefits from high precious metal prices, reported a 70% jump in Q1 adjusted earnings on Tuesday
(Reporting by Izabela Niemiec, Agnieszka Olenska in Gdansk, editing by Milla Nissi-Prussak)