July 14 (Bloomberg)

Copper Rises on Concern Output at World's Largest Mine May Drop


Copper rose in London, heading for a third straight weekly gain, amid concern that a pay dispute at the world's largest mine may lead to reduced production.

Miners at Escondida in Chile plan to strike next month if unions and management fail to reach a wage accord. Workers introduced ``go-slow'' tactics at the mine on July 7. Escondida accounted for 8.5 percent of global mine output last year, according to data from Chile and mine owner BHP Billiton.

``Copper's strong and likely to remain strong ahead of the Escondida contract,'' said William Adams, a Saffron Walden, England-based analyst at metals information company Basemetals.com.

Copper for delivery in three months on the London Metal Exchange rose $180, or 2.3 percent, to $8,100 a metric ton as of 10:20 a.m. local time. It has gained 4.6 percent this week.

Copper output has already been cut this year by strikes at mines in Mexico and faltering metal recoveries at mines in Zambia and Indonesia. Stockpiled copper, which consumers may use to fill a forecast production shortfall this year, has also slumped in the last month.

Inventory monitored by the LME gained 0.6 percent, the exchange said today, to 94,100 tons. Still, it has fallen 16 percent since June 1 and is now equal to about two days of global consumption.

``Any strike action would soon eat into the stock level,'' Adams said.

Among other LME metals, aluminum gained $30 to $2,635, lead rose $40 to $1,170, tin was $175 higher at $8,095 and zinc gained $110 to $3,530.

Nickel climbed $650 to $25,900 after inventories of the metal used to make stainless steel dropped the most since August 2004. Inventory monitored by the LME fell 14 percent, the exchange said today. Stockpiles have dropped 82 percent this year to 6,582 tons, the lowest level since May 18, 2005.

``Until we see any sustained turnaround in inventories, it's difficult to get bearish,'' said Neil Buxton at London- based GFMS Metals Consulting Ltd. The high prices ``are not choking off demand at all,'' he said.

Dow Jones Newswires - 14 Jul 2006

By Allen Sykora


Labor has been a major issue for the copper market so far in 2006 and could become an even bigger one in the weeks ahead, with the potential for a strike looming against Chile's Escondida, analysts say.

A long-running strike against Grupo Mexico (GMEXICO.MX) is continuing, and the apparent distance between the Escondida union and management contract offers has left the market expecting a strike by a roughly 60-40 margin, reported Robin Bahr, analyst with UBS. This comes at a time when global supplies are historically low.

"Labor issues are extremely significant and have been this year," Bahr said. "In the first four months of 2006, there was more disruptions and copper lost to the market than the whole of 2005, particularly with the long-running strike at Grupo Mexico, which remains unresolved."

"The thing that has fired up the imagination of bullish traders is the fact that the Escondida mine is the largest in the world," said Dan Vaught, futures analyst with A.G. Edwards.

Escondida produced 1,271,472 metric tons of copper a year ago. Total global refined production was roughly 16.433 million metric tons, according to a report earlier this year from the International Copper Study Group.

Thus, Escondida accounted for roughly 7% of the global market last year, making it the world's largest mine "by quite a margin," said Bahr.

And that, obviously, makes the labor situation at the mine crucial for the copper market. Even if a strike lasts for only one month, this would cost 100,000 tons of production, said Bahr.

"To put that into perspective, there is less than that in LME warehouses," he continued.

Data released by London Metal Exchange early Friday showed that warehouse inventories rose 525 metric tons to 94,100 metric tons. Comex stocks stood at 7,510 short tons Thursday.

"Between the major two exchanges, you've got the same amount (approximately in storage) as would be produced by Escondida in one month," said Bahr.

After copper prices hit record highs this spring, the union has sought a 13% raise, while the company offered 1.5%. A union official says it has begun a work slowdown and that a strike is "imminent."

The market is "anxious" as the countdown toward the Aug. 2 contract expiry continues, said Bahr, estimating that perhaps 60% of the market is looking for a strike.

"People are expecting one only on the basis of the last few weeks, negotiations appear not to have gone too well and both sides appear far apart," he said. "But, having said that, negotiations will be more crucial toward expiry of the contract at the beginning of August."

A "significant portion" of copper's gains over the last two weeks or so are due to anticipation of a possible Escondida strike, explained Vaught.

September copper, traded on the Comex division of the New York Mercantile Exchange, has risen from a two-month low of $2.9145 a pound on June 14 to a six-week high of $3.7700 on Wednesday, a gain of 29%. Three-month copper on the London Metal Exchange has risen from around $6,410 to $8,210 a metric ton during that time.

Some buying by speculators and other market participants has already occurred in anticipation of a strike, yet a labor disruption is not fully factored in, meaning more gains are possible, said Bahr.

"If the strike were to take place and news were to hit the market, then you would see a strong knee-jerk response in prices," said Bahr.

Vaught pointed out that the Grupo Mexico La Caridad strike that began in late March was one of the catalysts that had helped copper jump from around $2.25 a pound to roughly the $4 area.

"You still have the La Caridad and another mine (Cananea) closed," he said. "So with the prospect of an even larger mine (Escondida) going on strike in early August, that holds pretty major bullish implications."

Chile's mining industry will remain in focus this fall, when contracts at some Codelco divisions are due to expire, added Bahr.

"That will have the potential, as much as Escondida, to really provide anxiety in the market," he said.

Ana Rebelo, chief statistician with the International Copper Study Group, provided data showing that Chile is the largest copper-producing country in the world.

Chile has annual capacity of roughly 5.5 million metric tons, out of a global capacity of 16.6 million, she said. Escondida has capacity of some 1.2 million metric tons, while the combined Codelco operations have capacity of 1.4 million metric tons, she reported.

Workers have been on strike against Grupo Mexico's two largest copper mines - La Caridad and Cananea. Union officials are demanding government support in an ongoing dispute over union leadership.

The La Caridad strike began March 24, and the company has said that the mine could be shut down in the not-too-distant future if the strike continues. On June 2, workers also went on strike at the Cananea mine.

Daily research reports from UBS and Man Financial note that Grupo Mexico has told clients that it will struggle to meet orders in August if strikes at its Mexican mines are not resolved. The company had declared force majeure on copper deliveries in recent months because of the strikes, although it has until now managed to meet most contracts, analysts said.

"There is also a contract coming up for renewal in Peru at the Antamina mine," Bahr reported.

A contract between workers and the mine, which is owned by a consortium of countries, expires July 24. However, Barclays and UBS research reports note that a union official has expressed optimism that an agreement could be reached without a strike.

"There are other labor tensions in Zambia," said Bahr. There have been slowdowns and various protests, although there is no actual strike occurring, he explained.

However, an agreement on a new labor contract was reached this week at the country's largest copper producer, Konkola Copper Mineshave, a union official reported. The old contract had expired June 30, but was extended three months while talks continued.

The worries about supply disruptions come at a time when global inventories are already at historically low levels - with LME stocks at 94,100 metric tons, Comex supplies at 7,510 short tons and Shanghai Futures Exchange inventories at 61,120 metric tons.

These inventories account for only a few days worth of global demand, pointed out Vaught.

"Not only are LME stocks for some metals at or are near critically low levels but those held throughout industry at metal exchanges, producers, consumers and merchants are telling a similar story," said Bahr.

He estimated total industry stocks of copper amount to only 2.4 weeks worth of global consumption. Supplies of other base metals are also tight, particularly nickel and zinc.

"The implication for those tight metals is clear - any supply interruptions will feed straight through to prices given the lack of an adequate cushion or buffer, with consumers remaining anxious about actual physical availability of metal," said Bahr. "With supply growth limited over the next 12 months, there is likely to be little opportunity for these stocks to be rebuilt to more comfortable levels."

July 17 (Bloomberg)

Copper Rises in Shanghai on Speculation Fund Buying to Continue


Copper prices in Shanghai rose amid speculation that investment and hedge funds may continue to buy the metal amid concerns that strikes may cut supply.

Workers at Grupo Mexico SA, the world's seventh-largest copper mine, resolved a strike at Cananea mine, restarting operations that were shut since June 1, Mexico's miners union said today. Still, this resolution doesn't mean that funds will sell, said analyst Wang Zheng, citing concern about a possible strike at Escondida, the world's largest copper mine.

``The definitive impact on prices is how funds will react to such news,'' Wang, a metal analyst at Shanghai Dalu Futures Co., said by phone today. ``In addition, there are possible labor disputes arising in the next one to two months, so I don't see the funds leaving the market just yet.''

Metal for September delivery rose as much as 1,320 yuan, or 1.9 percent, to 72,690 yuan ($9,090) a ton on the Shanghai Futures Exchange. It traded at 71,890 yuan at 9:40 a.m. local time.

Escondida's management has offered a rise of 1.5 percent above inflation, the same increase the company made three years ago. Output at the mine has fallen 10 percent below normal since workers started following safety procedures to the letter on July 7, labor union spokesman Pedro Marin said on July 12.

The mine's production may drop a further 15 percent unless BHP Billiton, which operates the mine, improves the wage offer, Metal Bulletin reported on July 14, citing Marin.

Shanghai Copper Gains as Traders See Pause in U.S. Rate Rises

July 20 (Bloomberg) -- Copper prices in Shanghai rose as some traders interpreted comments from the Federal Reserve chief to mean there'd be pause in interest rate rises, allaying concern higher borrowing costs may slow demand for the metal.

Policy makers must be wary of lifting interest rates too far, Fed Chairman Ben S. Bernanke told the Senate Banking Committee in Washington yesterday. Shanghai copper prices, which have doubled in the past year, are down about a fifth from a record high on May 15 partly on concern demand growth would slow in China and the U.S., the world's top users, as rates rose.

``After Bernanke's speech, the market thinks it is less likely that the Fed will raise interest rates in August,'' Cai Luoyi, metal analyst at China International Futures (Shanghai) Co., said. That's ``weakening the dollar and supporting copper prices.''

Metal for delivery in October rose as much as 1,370 yuan, or 2.1 percent, to 67,500 yuan ($8,445) a metric ton on the Shanghai Futures Exchange, after falling by the daily maximum allowable limit in the past two days. It traded at 66,870 yuan by midday break at 11:30 a.m. local time.

Copper for cash delivery in Changjiang, Shanghai's biggest spot market, rose as much as 1.3 percent to 65,850 yuan a ton. Chinese users have to pay 17 percent value-added tax, 2 percent import tax, premiums and freight charges for imported copper.

The dollar fell for a second day after Bernanke's remarks, and on speculation that minutes of the Fed's last meeting, due for release later today, will show policy makers considered stopping a two-year campaign of raising interest rates. A weaker dollar makes copper, traded internationally in the currency, cheaper for users outside the U.S.

Dollar Declines

Ending the policy of raising borrowing costs may dull the appeal of U.S. assets compared with those of Europe and Japan, where central banks are lifting rates. The dollar yesterday fell the most in three weeks against the euro and dropped versus the yen after Bernanke's testimony.

Copper for delivery in September fell 0.5 percent to $3.575 a pound on the Comex division of the New York Mercantile Exchange at 12:12 p.m. Singapore time in after-hours trading.

The metal for three-month delivery fell as much as $94, or 1.2 percent, to $7,700 a metric ton on the London Metal Exchange, and traded at $7,755 at 12:13 p.m. Singapore time.

LONDON, July 20 (Reuters)

Vedanta Q1 core earnings up 280 pct to $589 mln


India-focused miner Vedanta Resources Plc (VED.L: Quote, Profile, Research) posted a 280 percent rise in first-quarter core earnings on Thursday, buoyed by booming metals prices, and said underlying demand for its commodities remained strong.

London-listed Vedanta said in a statement its earnings before interest, tax, depreciation and amortisation (EBITDA) rose to $589.1 million in the three months to end-June, on revenues up 113 percent to $1.286 billion.

Mining Weekly - 20 July 2006

Zinc shortfall was 120 000 t in first 5 months


Zinc supply fell short of demand for the first five months of the year, because of higher consumption of the metal used to galvanize steel, the International Lead and Zinc Study Group said.

Zinc production was 120 000 tons less than demand, compared with a shortfall of 98,000 tons a year earlier, the Lisbon-based group said in a report on its Web site today. The group is funded by the governments of producing and consuming countries.

Demand rose 2,4% to 4,47-million t, the group said. Production grew 1,9% to 4,35-million t.

Source: Dow Jones - 20 July 2006

Copper sell-off by funds; Fundamentals sound: LME



London Metal Exchange three-month copper slumped Thursday as liquidation by commodity-trade advisory funds pressured prices back 6% below previous kerb levels, traders said.

Copper prices fell in $100 "gaps" in the run-up to late kerb in London on very little volume, ending the afternoon session down $430, or 5.5%, on previous kerb levels at $7,350 a metric ton.

"A late spell of liquidation by the speculative community knocked prices down but it's left people scratching their heads," said a broker.

Despite losses, market participants agree copper prices remain firmly underpinned by potential supply-side concerns including contract negotiations at major copper producers such as Codelco and Teck Cominco.

The union at Codelco's Escondida operations is to meet with management later Thursday to start negotiations ahead of their workers' Aug. 2 contract expiry.

"They've agreed to meet which is a good sign but, that alone, is not going to make investors sell," said a trader.

The possibility of a workers' strike at Teck Cominco Ltd.'s Highland Valley copper mine in Canada is also being closely watched by the market. Unionized workers have said they might decide to strike if they can't agree to a new wage deal by Oct. 1.

Dow Jones Newswires - 20 July 2006
DJ BASE METALS UPDATE:New Chile Copper Strike Threat -Report


Chile Codelco Contractors Threaten New Strike - Report

SANTIAGO (Dow Jones)--Unionized contract workers at copper giant Corporacion Nacional del Cobre de Chile's Teniente and Andina divisions are threatening to go on strike again, El Mercurio newspaper reported Wednesday.

(Reuters) - Sat Jul 22, 2006

Chile's Escondida union says contract talks fail

SANTIAGO, Chile, - Workers at Chile's Escondida, the world's biggest copper mine, said on Friday contract talks with the company had failed and that they planned to vote on a strike next week barring a new offer.

"It looks like we'll strike," Union Secretary Pedro Marin told Reuters late on Friday after two days of extraordinary talks failed to result in a new offer from the company.

Workers reached the decision in a meeting late on Friday night, Marin said.

The union and managers at Escondida, majority owned by global mining giant BHP Billiton, were in talks on Thursday and Friday to try to reach an agreement ahead of a strike vote by workers next week.

The last day for the company to improve its offer is July 25, so workers can vote on July 28 on whether to strike.

Marin said that a strike could begin on Aug. 1 unless the company requests mediation from labor authorities, in which case the sides have five days to resolve their differences.

The union, which represents more than 2,000 workers, began a slowdown this month to protest a wage increase offer that it called too small. The current contract expires on Aug. 2.

This week, the company invited workers to resume formal talks and workers and managers of Escondida met on Thursday and Friday.

"If you ask me about progress...zero," Marin said of the two days of talks.

With global copper prices surging, the Escondida union is asking for a 13 percent raise and a $30,000 net bonus per worker. The company has offered a 1.5 percent raise, a bonus and low-interest loans worth about $8,500 per worker.

BHP Billiton, the world's largest miner, owns 57.5 percent of the open-pit mine, while number-two Rio Tinto has a 30 percent stake.

Mining stocks were also in demand, lifted by a bullish note on the sector by UBS and firmer commodity prices amid concerns over supply disruptions and continued uncertainty over the escalating situation in the Middle East.

Copper prices rose 1.5 pct amid nervousness ahead of a strike vote tomorrow at Chile's Escondida mine, riots at Zambia's Chambishi mine and production losses at Chile's Chuquicamata mine.

In a note to clients, UBS raised its commodity price forecasts for copper, nickel, iron ore, platinum and molybdenum by an average of 7 pct in 2006 and 19 pct in 2007, following revisions to its supply-demand balances.

It told clients that although volatility may continue, it believes the shares are supported by attractive valuations, noting that its top picks are Xstrata and Lonmin.

Xstrata shares were up 108 pence to 2,142, also boosted by news that it intends to buy up to 5 pct of Falconbridge shares on the Toronto Stock Exchange, raising its chances of success in the battle for the Canadian nickel miner.

Elsewhere, copper plays Kazakhmys and Antofagasta gained 61 pence to 1,246 and 15 pence to 412-3/4 respectively, while Vedanta added 61 pence to 1,322 and Lonmin put on 70 pence to 2,846.

....Looks like a case of take your pic boys and girls.

Commodities boom seen lasting 4-5 years on demand


SEOUL, JULY 27: The boom in commodities will last another four or five years as supplies remain short due to underinvestment in mines and demand from emerging economies keeps rising, a senior fund manager in South Korea said on Thursday.

Inflation worries around the global economy will also cause commodity investments to shine among the dull returns from stocks and bonds, Kang Chungmo, senior manager at Woori Credit Suisse Asset Management, said. The commodities game will be much better than stocks and bonds for about four to five years, Kang said in an interview.

He manages an 80 billion won ($83.82 million) commodity fund, the largest one in Asia. The valuation for commodities, unlike stocks and bonds, is very difficult to do, so prices are completely decided by supply and demand. I believe there is a five-six year gap before commodity supply and demand will match.

Backed by the recent bullishness in commodities, Woori in March started sales of a fund that invests solely in commodities, the first of its kind in the country. The fund uses a basket of 19 commodities, tracking the Reuters/Jefferies CRB Index, which comprises futures from corn, gold, copper and crude oil.

We are basically following the weighting of the CRB, but personally I think gold and crude oil are the most favourable commodities, while copper only has 10-15% further to rise, Kang said. CRB index now weights 23% in crude oil and 6% each in gold, copper and corn.

Global prices of gold should hit $1,000 an ounce in three years, from $620 at present, Kang added. The Woori fund is up about 6.7% so far, after rising 12% in early May, and Kang is aiming for 10-12% in annual returns. In contrast, South Koreas KOSPI index has fallen 7% this year, after a 54% rise last year.

Woori is considering offering more commodity funds to attract a broader range of investors to the market. But investors are limited to individuals because regulations forbid big pension funds in South Korea from putting their money into commodities.

The health and welfare ministry, which regulates the pension funds, is considering allowing the funds to invest outside of stocks and bonds.

Commodity funds are drawing more attention, but it will take two years until big institutional investors are cashing in on the hot commodity market. Then the demand for commodity funds.

Reuters

Big Mining Is Big Value

By Alun Morris
July 28, 2006

I don't often buy large cap shares. I prefer to stay away from the thousand Watt arc lamps of multiple broker analysis and take my flashlight around the darker corners of the market.

However this month I bought a share in a sector that looks so cheap that I couldn't keep my grasping value hands off it any longer. I have been mulling a move on big mining since UK investing legend Jim Slater said in February that mining shares were cheap. In fact he thought the rating of this sector was one of the most serious mis-pricing of markets he had ever seen, showing high growth and low P/Es. Being fully invested I didn't buy. Besides, these huge companies have more analysts than Woody Allen, so where's my edge?



Why are big miners so cheap?

This sector is cheap for a reason. Metal prices have run up a hill that's got steeper and steeper and we don't know if there's a cliff at the end. Copper, nickel and zinc have doubled or trebled in the past year, largely due to rapid growth and construction spending in China and India. Many see it as yet another bubble with prices overshooting due to speculation. The futures market is predicting significant falls in prices next year. Demand would fall if the Chinese or Indian economies stumble..

The bull arguments are:

* The same was said about oil last year but the futures market is now predicting $70+ oil until 2011.

* New mines take six to seven years to enter production, so the recent rush to start new mines will not give a big supply boost until the end of the decade.

* Chinese growth seems to be underpinned by endless demand for ever cheaper consumer goods.

I believe that mining shares offer the same opportunity that the oil and gas sector did a year ago -- their prices considerably lag the rise in the commodities they produce.



So which is the cheapest?

An excellent Metals and Mining report from Deutsche Bank this month looked at seven UK listed shares. The table below has excitingly low ratios, especially cashflow, and uses Deutsche's estimates adjusted for Wednesday's prices:

                       2007 P/E
Anglo American      9.2
Antofagasta          7.1
BHP Billiton            8.2
Kazakhmys            6.5
Lonmin                11.4
Rio Tinto               8.4
Vedanta                7.2



see article and table in full here


Cash

Cash, cash, cash! Music to my ears. The sector has more cash than it knows how to spend, hence the very low P/CF and EV/EBITDA figures. I decided to buy Vedanta -- it has the lowest 2007 cashflow ratios and nearly the lowest P/E. These reflect forecast output growth of 48% over the next 3 years., far higher than the others at about 5% to 25%. Jim Slater likes it too -- in a talk in June his picks were BHP Billiton and Vedanta.

Be prepared for a bumpy ride. These shares will often move two or three times as much as the FTSE-100 in a day. If you can stomach this and the risk of a slump in copper prices (and the forecasts already assume some decline), Vedanta looks the cheapest of the bunch.

Am i blind or just plain dumb? ..... surely KAZ (and ANTO) is cheaper that VED, though KAZ from memory is a copper play while VED is fairly heavily into zinc ...... and surely it is a safer(?) bet to play the commodities straight rather than relying on the vagaries of companies who are at least one step removed

Workers vote for Escondida mine strike

Sat Jul 29, 2006 - By Pav Jordan


SANTIAGO, Chile (Reuters) - Workers at Chile's Escondida, the world's largest copper mine, voted overwhelmingly on Friday to strike to demand a new contract offer from the company that reflected soaring copper prices.

With global copper prices surging and markets nervous about supplies, 97 percent of 2,052 union workers at the mine had participated in the vote for a strike late on Friday.

"Some 97 percent of workers voted to strike," Union Secretary Pedro Marin told Reuters after votes were tallied.

He said the company will seek government mediation to hold off the strike, giving sides five more days to resolve their differences before workers walk off the job.

Marin said 1,994 workers voted, with the remaining 58 workers not participating because they were on holiday or otherwise not available.

"Only one vote was in favour of the company. One vote was blank," he said.

"On Monday we'll be talking with the company," Marin said.

With copper prices more than five times what they were when the union negotiated a 2003 contract that expires on August 2, workers are demanding a large raise from Escondida. The mine is majority-owned by global miner BHP Billiton.

Copper prices have soared amid strong demand from China's booming economy and solid global economic growth.

In New York, copper futures rose 2 percent on Friday amid jitters about the Escondida strike vote and a rockslide this week at the huge Chuquicamata copper mine, owned by top copper producer Codelco.

Workers were voting throughout the day on Friday, as shifts entered and exited the massive open-pit mine in northern Chile, and as union members on leave voted in surrounding towns.

Escondida expects 2006 copper output to be similar to last year's level of 1.27 million tonnes.

BHP Billiton, the world's largest miner, owns 57.5 percent of the open-pit mine, while number-two Rio Tinto has a 30 percent stake.

Billiton could not be reached for comment.

If government mediation fails, a strike likely would begin on August 7.

Three big miners issue interim results this week:

Wednesday:  Xstrata
Thursday:     Rio Tinto
Friday:         Anglo American


With vedanta issuing record busting results last week and the copper strike in Chile kicking off, all mining prices should get a boost this week.

Wednesday, July 26, 2006
Oligopoly Watch: - The latest maneuvers of the new oligopolies and what they mean.

Consolidation fever in the mining industry

Mining companies have been rolling up the industry over the past few years, and the consensus is that that trend will continue until there are no possible buy reagents left. That's the conclusion of a Financial Times article ("Miners roll up their sleeves to consolidate scarce resources", 7/25/06).

The most immediate sign of the buying frenzy is in the current duel between Phelps Dodge and Xstrata to buy Canada-based Falconbridge, a bidding war that has doubled the price of that company from around $10 billion to over $20 billion.

But that's not the only deal in the works.

* Australian iron ore miner Mount Gibson just made a bid for rival Aztec, hoping to boost the company to #3 status in Australia.
* Canada's GlobeStar Mining Corporation just bought out Dominican Republic nickel mines from Everton Resources Inc.
* Canada's Stornoway Diamond Corp. has bid to buy Canada's Ashton Mining and Contact Diamond Corporation, both diamond mining companies.
* New Zealand's Oceana Gold recently acquired Australia's Climax Mining, another gold miner.
* Canada's Barrick Gold has made an offer to buy Canadian rival NovaGold.

And these are just the deals happening in the last few months, all worth at least hundreds of millions of dollars.

Because metals prices are so high, the mining companies are loaded with cash. That means that even $20 billion acquisitions are doable. Some mid-size mining firms drawing strong interest are Alumina, Newcrest, Lonmin and Vedanta. There are twenty mining companies in the world with between five and 20 billion dollars in revenue, and all bets are that there will be significantly next within a few years. And the bidding, as for Falconbridge, is likely to be strongly contested.

And, as we've seen with big oil, acquiring established sources is far more desirable than spending money on exploration. The FT article quotes a Citigroup analyst as saying: "Acquisitions and buybacks deliver better returns than the expansion of production."

Older miners are wearing out faster than new mines are discovered. Also, the increasing environmental controls and Third-World nationalism make the cost of new mines grow ever higher.

Plus some very big companies are rumored, according to the article, to be targets. Aluminum company Alcoa is one of them, as is rival Alcan. Even gold and diamond giant Anglo-American may be tempting, now that is selling off both its steel and paper operations, making a pure mining play.

Companies like Rio Tinto and BHP Billiton are identified as possible predators. Both are set to generate many billions in cash this year, thanks to skyrocketing iron ore prices. Even smaller deals (purchases of single mines) are significant, as bigger companies keep rolling up smaller ones.

Harry (and others) ...... for all the truth in newspaper article etc, be wary of getting too greedy (yes, we've all done it) and don't chase any old mining company just because it just might be a t/o target ..... in conclusion, buy on fundamentals with any potential t/o as a bonus, and it would do no harm to put in place trailing stops.

Thanks C, and noted by many of us i should think.

the big Q is what to do tomorrow if anything .... lol!

Depends on peoples strategies as always.