Vedanta Resources is a diversified and integrated metals and mining group with annual sales of $1.9bn. Its principal operations are located in India, where it has a major market share in each of our main metals: aluminium, copper, zinc and lead. There are also substantial copper operations in Zambia and 2 copper mines in Australia.

            Red = 25 day moving average.           Green = 200 day moving average.

                        

Copper - (6 month graph)

SALES PER ACTIVITY (Data as of 31/03/2006)

Copper:      60%
Zinc:         24%
Aluminium:  12%
Others:       4%

Telegraph

Copper passes $8,000 a tonne
(Filed: 10/05/2006)


Copper surged past $8,000 a tonne for the first time in history as speculative investment fund buying continued to dominate in a market already hit by strong demand and supply constraints.


For three-month delivery, copper advanced $195, or 2.5pc, to $8,010 a metric tonne in morning trade.

Labour disputes and threats to output from Mexico to Indonesia have dented global stockpiles, driving copper 82pc higher this year alone. BHP Billiton, the world's biggest miner, recently said supplies will be limited until 2008, while inventory tracked by the London Metal Exchange, the world's biggest metals bourse, is so low it will last the world less than three days.

At the same time, pension and hedge funds are pouring money into commodities as raw materials from sugar to oil produce returns that far outpace other assets. Barclays has estimated that fund investments in commodities may exceed $120bn by 2008, up from $80bn last year.

Li Rong, a metal analyst at Great Wall Futures Corp, told Bloomberg by phone from Shanghai: "Speculators are confident that London prices will keep rising."

Funds tracking commodity indexes may hold copper futures contracts equal to as much as 465,000 tonnes, almost three times more than the physical metal stored in warehouses monitored by exchanges in London, New York and Shanghai, Bloomsbury Minerals Economics said in a report last week. The shortfall in supplymay drive prices above $9,000 a tonne this year, it added.

Simultaneously, demand, driven by the booming Chinese economy, is soaring. China's economy expanded 9.9pc last year, followed by 10.2pc growth in the first three months. And labour disruptions are exacerbating the situation. Workers at Grupo Mexico SA, the world's seventh-largest copper producer, have been on strike since March 24 over pay and safety. Added to which, a decline in ore grades at Freeport-MacMoRan's Grasberg reduced output in the first quarter.

Alfred Wong, who helps manage $12bn at UOB Asset Management in Singapore, said: "Every day we see further evidence of supply disruptions. I'm not surprised at all to see this kind of rally."

LONDON (AFX) - The price of copper smashed through 8,000 usd per tonne for the first time following the closure of a mine in key producer Mexico.

In morning trade on the London Metal Exchange, three-month copper prices reached 8,010 usd per tonne -- the highest point since the metal was first listed in 1877.

The price of copper, used for electrical wiring and plumbing, has been boosted in recent months by supply problems, limited output and soaring demand from the booming economies of China and India.

Mining company Grupo Mexico said this morning it is closing its zinc and copper mine in San Martin, the country's largest, after the government refused to intervene to end a strike that has affected the site since March.

Zinc, which is chiefly used to galvanise iron and steel, also hit a new record of 3,525 usd per tonne.

Strike action has also hit another of the company's copper mines in Le Caridad, while mining production is declining in Chile, the world's largest producer of the commodity.

China stockpile talk drives copper to highs: LME

Source: Dow Jones


London Metal Exchange three-month copper, nickel and zinc pushed to fresh contract highs Wednesday driven by fresh investment buying on the strength of continuing concerns about supply shortages, market participants said.

Copper grazed fresh contract highs of $8,100/ton in the run-up to late kerb in London, closing just shy of that at $8,070/ton, up $255 on Tuesday's PM kerb price.

Copper bulls were encouraged by market conjecture about whether China will opt to increase its physical strategic reserves of copper rather than boost its exploration activities.

"Reports that China will be looking to accumulate metal for its stockpile only serving to add fuel to the bull fire," said Roy Carson, analyst at Triland Metals.

Illiquid trading conditions are also encouraging sharp upward price moves, particularly in copper, according to market participants.

Aluminium also benefited from momentum created by hedge fund buying, improving on yesterday's breach of the $3,000/ton level and finishing the PM kerb at $3,094/ton. Earlier prices breached fresh 18-year highs of $3,100/ton. Aluminium bulls now target the June 1988 record high of $3,272/ton, according to Roy Carson at Triland Metals.

Nickel also pushed to a fresh contract high of $20,450/ton, closing at that level at late PM kerb in London, up 2.5% on previous PM kerb prices.

Buying momentum also focused on zinc, helping push prices to fresh highs of $3,660/ton at late kerb, up $190 on the previous session close. Wider spreads encouraged fresh buying, as did the strong performance in copper, according to an analyst.

Lead prices breached resistance at $1,300/ton to finish the session up $33 on previous kerb prices at $1,312/ton.

Daily Telegraph
Copper price soars as bull run hots up
By Josephine Moulds (Filed: 12/05/2006)

Commodities continued their bull run led by copper, which broke through $8,800 a tonne during the day.

"It has been a wild, wild day; wilder even than it has become in recent weeks," said Stephen Briggs, economist at French investment bank SG.

"The copper price was, at one point, up 10pc on the day, which is almost unheard of. Copper is dragging the other base metals up with it and having an effect on precious metals."

Copper closed up $471 at $8,619 a tonne in London.

Demand for copper, particularly from China and India, has outstripped supply, which has been hampered by strikes and accidents. Zinc, which closed up $505.5 at $3,980, is in similarly short supply. Nickel rose $1,150 in sympathy with other metals to $21,700. Gold hit a new 25-year high, closing up $16.90 at $719.

The wall of money pouring into commodities has boosted prices. Mr Briggs said: "There is a lot of pension fund and mutual fund money being diversified into this asset class."

A key factor in the metals bull market has also been the decline in the dollar. Metal prices are expressed in dollars, and so when the dollar weakens they become cheaper for holders of other currencies. The dollar's decline continued yesterday, falling 1 cents to $1.8794 against the pound.

Stephen Lewis, economist at Insinger de Beaufort, said: "The dollar has been falling because there has been a feeling that east Asian central banks are not going to be accumulating dollars. Indeed they may be shedding them."

Belligerent comments from Iran's president also prompted risk fears.

Citywire. 12 May.

Morgan Stanley has an overweight rating for Vedanta Resources, raising target to 23 from 16.

LONDON (AFX) - Vedanta Resources PLC said operations at the new 250,000-tonne per year Korba aluminium smelter in India have been hampered by bad weather.

The power plant that is supplying electricity to the smelter tripped because of stormy weather, cutting average daily output to 350 tonnes from 450 tonnes in March, when the facility has been fully commissioned.

'We are currently stabilising the potline under these complex conditions and some pots have been taken out from the existing production line,' Vedanta said in a statement.

'We are making efforts to stabilise the pots taken out from the potline and our current assessment is that this may be progressively completed towards the end of the second quarter of FY 2007,' it added.

Surplus electricity generated by the power plant will be exported to India's state-owned grid, it said.



monicca.egoy@afxnews.com

Copper may rise up to 50% on fund demand, Sucden says

Source: Bloomberg


Copper prices in London may increase by as much as 50 percent in the next year as global demand from hedge funds and cablemakers outstrips supply, according to Sucden U.K. Plc, which trades on the London Metal Exchange.

Prices of the metal have surged 87 percent this year, and reached a record $8,800 a ton on May 11, as hedge and pension funds poured money into commodities in pursuit of higher returns than those offered by stocks and bonds. Global supply may not rise quickly enough to meet demand, Jeremy Goldwyn, global head of industrial commodities at Sucden, said in Shanghai yesterday.

"Many pension and mutual funds see commodities as a natural home for three to five percent of their money," Goldwyn told a futures conference. "They have a massive influence on the price and use commodities as a hedge for their traditional investments" such as stocks and bonds. Sucden is one of 11 companies that trade on the floor of the London Metal Exchange, the world's biggest metals bourse.

Economic growth in the U.S. and Europe meant the high copper price hasn't eroded demand, he said. Cumerio, the copper producer spun off by Belgian metals producer Umicore SA, said last month first quarter deliveries of wire rods and shapes rose 10 percent in the first quarter.

"We don't feel there's a great deal of demand destruction" from the high prices, while copper miners haven't been able to increase output because of problems such as labor disputes, and a shortage of skilled engineers and mining equipment, Goldwyn said.
Increasing prices

"We certainly would not be surprised to see copper at $9,000, $10,000 or $12,000 in the next six, nine or 12 months," he said. Index-linked funds and other passive investors had placed $80 billion to $120 billion in commodities, with as much as 30 percent of that in base metals, he added.

The potential for copper prices to rise and fall sharply had fueled concern amongst brokers that their clients may not be able to meet margin requirements, said Goldwyn. A margin is the amount of cash a client deposits with a broker when buying or selling a commodity for future delivery.

"If clients can't meet margin requirements, their brokers still have to," he said. The system "certainly has been under stress" and extreme price volatility makes it harder for option market-makers to manage their exposure, added Goldwyn of Sucden, which is owned by Paris-based Sucres et Denrees SA.

An option is the right, not the obligation, to buy or sell a commodity within a pre-determined time.

Grupo Mexico SA has had a strike at its La Caridad mine for two months. Chile's state-owned Codelco, the world's largest copper producer, said output this year will decline from 2005.

Global demand for refined copper in the first quarter of this year had risen at least 5 percent from a year earlier as users had to buy copper to fulfill their orders, Jon Barnes, principal consultant, copper fabricating, at London-based metals adviser CRU, said in an interview.

"Last year, all the fabricators were running down their stocks," he said. "This year, everyone has to restock so they have to buy, even at high prices," he said.

Still, there are signs that the uptrend in copper prices may end, said John Kemp, an economist at Sempra Metals Ltd., which trades on the floor of the LME and is owned by San Diego- based Sempra Energy.

"Substitution, moderating global growth and a more cautious appetite for risk among investors will eventually bring the bull market to an end," Kemp told the conference yesterday.

"All these factors are already underway," he said. "It's impossible to say when they might start to affect copper prices, or how far the market might fall before finding a floor."
Investment funds

Investment funds now have very large positions relative to the size of the market and can consequently move prices and "shape the environment," Kemp said.

Falling liquidity has accelerated and exacerbated price movements. Price volatility has been increasing and is likely to remain "exceptionally high for at least the next couple of years," he added.

The surge in prices has led to a sharp increase in inquiries from metal consumers to hedge, Dominic Mound, director of base metals in the Asia-Pacific region at ABN Amro Holding NV, said at the conference.

"In the last six months, I've enjoyed more inquiries from consumers with the upsurge in prices than in the previous six years," he said. "One of the reasons is they can no longer ask the fabricator to carry the risk for them, so they are coming to the market," he said.

Business

The Times May 30, 2006

Vedanta Resources, the India-focused miner, will report its full-year results on Thursday. Analysts expect profits of 367 million, from 188 million last time.

Yes, this thursdays results will reveal that profits are double last years. Share price should be well over 1600 by weekend. Definitely the miner to be on this week.

Vedanta goes into the FTSE 100 in a couple of weeks time.

seems the market has been over-reacting to US and should pick up again soon. more buyers than sellers on most stocks. results due tomorrow and years profits are up by 100% (367 million, from 188 million last time.).

UBS buy note today.

Source: Calcutta Telegraph 31 May 2006

Orissa clears Vedanta smelter

The Orissa government today approved the first phase of Vedanta Resources' 5-lakh-tonne aluminium smelter in Jharsuguda district.

The construction work for the Rs 7,000-crore project in Bhokamunda area of Jharsuguda, which will be implemented in two phases of 250,000 tonnes per annum each, is expected to start in June.

In the first phase, the company would invest Rs 3000 crore. The construction of the first phase is expected to be completed in the second half of 2009 and the second phase is expected to get over by 2010.

The proposal for the establishment of smelter in Jharsuguda district was placed before the high-powered project clearance authority, chaired by chief minister Naveen Patnaik, this afternoon. The aluminium smelter project will largely cater to the export market. According to company officials, around 40 per cent of the funds for the project will be generated through internal accruals, while 60 per cent would be debt funded.

Setting up the smelter is a major step in Vedanta's corporate plan to create one million tonnes of aluminium capacity in India. The smelter will use alumina from the nearby Lanjigarh refinery, which is being set up at an estimated cost of Rs 4,500 crore and is nearing completion.

The alumina refinery project at Lanjigarh is caught in a controversy as the centrally- empowered committee of the Supreme Court has recommended that the Union government should not allow the the contentious project to come up. However, the construction of the alumina refinery is going on at full steam.

Besides Vedanta's alumina smelter, the project clearance authority asked its officials to speed up the process of setting up three mega thermal plants of 3000 megawatt each by Navbharat Power, Mahanadi Aban Power Company, and GMR Energy. The state will get an estimated Rs 150 crore revenue per year from each of these power plants.

The environmental impact of the thermal plants also figured at the meeting. The chief minister asked the officials to take up plantation work around the projects on a priority basis.

Vedanta Resources PLC
01 June 2006


1 June 2006

Vedanta Resources plc
Results for the year ended 31 March 2006


Highlights

Record Financial Performance

- Group Revenue up 96.5% to $3,702 million and Group EBITDA up 142.6% to
$1,102 million, driven by better prices and strong volume growth

- Operating profit up 187.7% to $944 million

- Strong balance sheet with net assets of $2.3 billion and gearing of
under 1%

- ROCE (excluding project capital work in progress) significantly higher
at 37.9% up from 32.0%

- Basic EPS up 108.3% at 130.2 US cents, EPS on the basis of underlying
profits up 166.3%

- Final dividend proposed at 14.3 US cents per share bringing full year
dividend to 20.0 US cents


Volume Led Growth

- Phase 1 expansion projects in copper and zinc completed

- Korba aluminium smelter production being ramped up progressively

- Second phase of expansion projects totalling $3.1 billion announced
during the year

- 50,000 tpa lead plant commissioned making us India's largest primary
producer of lead

Such a good news but falling like a stone ,just dont understand the markets at times.

Merrill Lynch has a buy rating and 18.60 target for Vedanta Resources.

JP Morgan reiterates its overweight rating and 18.25 target for Vedanta Resources.

This seems over done to me .hopefully wont be long before the bounce.

Managed to get on board at the end.... now lets see that bounce.

i wish i had sold this morning when they started trading at 15pounds,thought they will go higher,but went the other way,learnt a lesson which can only be good for the future,as they say profit is only once the stock is sold.good luck for tomo

Never mind ateeq180 can't see this one down for long.