Longterm trends in domestic metal prices under international conditions of differential inflation rates and unstable currency exchange rates

The problem of a realistic investment analysis for a new mining venture that sells its products on the international metal markets IS studied against the background factors, firstly, of different inflation rates between the countries hosting the mines and those. hosting the metal markets; and, secondly, of the changing pattern of currency exchange rates between such countries. The purchasing-power parity theory is used to establish a pattern of relationship between these two factors, and to develop a more logical approach to the long-term forecasting of metal prices in the currency of the country in which the mine is situated.