Compare their views with your own in terms of what information is most important. Are there elements your peers have omitted? Provide reasoning to support your views.
After reading the case study regarding New Earth Mining, Inc., there is an abundant amount of information concerning both quantitative and qualitative measures. The most important qualitative information is the location of New Earth Mining. New Earth Mining is major valued -metal producer who succeeded financially during gold’s exponential increase in value in the first decade of the 2000’s. Based on the balance sheet,
they display strong cashflow, earnings, and standard levels of debt giving them great
opportunity for expansion (Fruhan, Wang, 2013). Being worried about the sustainability
of gold’s price levels, New Earth wanted out new investment opportunities to promote expansion
in different venues rather than through acquisition of smaller companies in the same
arena (Fruhan, Wang, 2013). Iron ore bodies in South Africa was what New Earth chose to
pursue as they saw stability through future demand, and shortage of skilled labor
globally (Fruhan, Wang, 2013).
The formation of New Earth South Africa was the end result after securing deals with buyers in China, Japan, and South Korea. After analyzing the qualitative information, there were a few major quantitative measures that were crucial. Beginning first with New Earth’s decision to go with iron production, Drexel Corporation reported 30 million tons of ore with an average iron content of 60% to New Earth’s making South Africa a prime target (Fruhan, Wang, 2013).
Fruhan, W. and Wang, W. (2013, October 11). New Earth Mining, Inc. Retrieved from https://cb.hbsp.harvard.edu/cbmp/content/59519553.
Discussion reply 1:
Quantitative data defines the information by providing measurable numbers and percentages whereas qualitative data describes the information using things such as surveys and research, quantitative data defines whereas qualitative describes (Business, 2016). Both of these factors are important in understanding the New Earth Mining case and how those involved came up with the best solution. The qualitative data gained from research and surveys to not only determine the inconsistencies within the gold industry but also to analyze the best route to take to diversify the company. The quantitive side allowed New Earth Mining to plan the investments and maximize the profit and return on their new investment. Without utilizing both quantitative and qualitative data the company would drastically reduce the likelihood of success (Fruhan, 2016).
(2016). Business Dictionary. Retrieved from www.businessdictionary.com
Fruhan, W.E. & Wang, W. (2016). New Earth Mining. The Harvard Business review.Retrieved from; Harvard Business School. http://cb.hbsp.harvard.
Discussion reply 2:
New Earth Mining is one of the largest producers of precious metals in the U.S. While the firm operates mines primarily in the U.S. and Canada, it has also made substantial investments in gold exploration projects in Australia and Chile. New Earth has been very successful and has a large amount of cash on the balance sheet, a simple debt structure, and a reasonable leverage ratio with no risk of liquidity. With a strong financial position, the firm considers reducing its dependence on precious metals by diversifying into base metals and other minerals.
To better understand what we have; New Earth Mining is all over the world and now they are going into another area that the volatility due to the governments and regulations are unstable at best in all areas of the country. However, due to the reward verses the risk they are seriously evaluating which direction to take. First, let’s evaluate what would it mean for NEM to look at it quantitatively.
Quantitative- of, relating to, or involving the measurement of quantity or amount
Qualitative- involving or relating to distinctions based on quality or qualities
In essence, what I see that they have done with New Earth is that in Africa it is a country that becomes very intriguing when you are looking to invest from the mining standpoint. The county itself is very mineral rich in several minerals not to add precious metals. Depending, the cashflow and the liquid assets, the board of directors would have to make the final decision as to:
- What is the reason that we are here?
- What are the political connections that can be made in this country? Where do we start, and what is the potential outlay vs. ROI?
- What are the possible losses that could be realized?
- If errors are made, how correctable are they?
Several issues come to mind when you are in a country as large as Africa. There are so many types of governments and political figures to deal with as well as health issues, monetary issues and safety as well. Therefore, expanding into Africa doesn’t become just a profits and loss issue, more than the several other situations that could happen as listed above.