This model uses rational expectations theory to forecast
mineral commodity prices in the future. The theory defines
expectations as being identical to the best guess of the future
from all available information. This theory assumes that outcomes
being forecasted do not differ systematically or predictably from
the equilibrium results. For example, mining project evaluators
assume to predict the gold price by looking at gold prices in
previous years. If the economy suffers from constantly rising
inflation rates or oil price pressure, the assumptions used to make
a prediction are different from that time when the economy
follows a smooth growth.