How are natural resources traded?
What factors affect the value of natural resources?
This lesson explores issues related to commodity markets introducing the idea that natural resources are extremely valuable and that there are a complex series of international interrelationships based on these resources.
Download the oil prices starter powerpoint to see how the price of oil has changed over time between 1861 and 2013.
Describe the pattern of change that is shown in this graph.
What events do you think might have affected the price of oil?
View the next slide to see what events happened that affected the price of oil.
In order to explore different factors which can affect the value of different natural resources you are going to pretend that you are involved in the Mineral Commodity Markets and that you are involved in trading coffee, copper, iron, oil, wheat, coal and tin. In your group you each start with resources which have the value of 100 and in turn you need to work through the scenario cards to see what can happen to the price of natural resources. Pick a country of your choice to represent in this activity. Each card will have an event and an impact on the value of a particular resource (or a number of resources). You will need to calculate the impact on the value of your resources. Take it in turns to have an event affect your country. When all the cards have been viewed see what the final value of your resources has become. What was the event that had the greatest impact on your natural resources?
Note: In the real world different resources would start at different values but in this activity the values all start at 100 to allow for easier calculation. Also in the real world it is extremely unlikely you would get these scenarios included in the cards occurring in such short succession. While commodity markets can be volatile they are hopefully not as volatile as the hypothetical markets you are about to explore. You may need a calculator to work out the change in value to your natural resources.
This activity showed how different factors and events can affect the value of natural resources. The next task requires you to imagine that you work as a reporter for the Financial Times. You need to write a short news article for the Financial Times advising investors about the potential risks and rewards of investing in natural resources. You should highlight the various events which could affect their investment. Based on the scenarios you saw in your commodity markets, which natural resources should investors choose, and why?
Discuss in pairs what events happening in the world right now might affect the value of natural resources. Think about things you have seen in the news recently.
This resource has been developed as part of the Rediscovering London's Geography project, funded by the GLA through the London Schools Excellence Fund. It seeks to improve the quality of teaching and learning of geography in London’s schools, in addition to encouraging more pupils to study geography