Mining companies remain unhedged, despite Chinese clouds

After some painful experiences in recent years, mining companies remain largely unhedged – despite a jump in metals volatility and the threat of a Chinese downturn. Could they end up regretting it? Michael Watt reports

Metals hedging has never been so unfashionable. Years of rising commodity prices have decimated dealer hedging books, and mining firms say they have no plans to change course – that’s despite a surge in volatility in the second half of 2011 and less certainty about economic prospects for China, the ultimate consumer for around 40% of the world’s supply of some base metals.

“There is no inclination to change our current policy towards gold hedging,” says a spokesperson from South African mining