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%

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.

The Times June 02, 2006

Big Shot By Peter Klinger

Anil Agarwals timing is impressive. When he listed the Vedanta Resources mining company on the London Stock Exchange 2 years ago, investors initially balked, sending Vedantas shares down as low as 269p. Mr Agarwal persisted with his vision of building Indias pre-eminent mining company, producing zinc, copper and aluminium within easy reach of the countrys booming markets. His patience and ability to deliver on promises, including yesterdays 188 per cent improvement in full-year operating profit to $943.8 million (504 million), is paying handsome dividends. Vedantas shares are now worth 13.78 and his familys stake is worth 2.1 billion.

Mr Agarwal, who has homes in India and Britain, has been variously described as combative, aggressive and totally focused. It is an approach that has served him well, and could soon serve university students with a role model. Mr Agarwal has pledged $1 billion to a trust with which he wants to set up Vedanta University. The university wants to emulate the international reputations of the likes of Oxford and Stanford. A tall order, but based on Mr Agarwals own rags-to-riches story, who knows. . . ?

Record-breaking results from the Indian copper miner Vedanta Resources could not prevent a bout of profit-taking that saw the shares drop 69p to close at 1,378p. Even so, the group looks likely to win a place in the FTSE 100 on Wednesday, when the latest reshuffle is due to be confirmed, and despite the recent weakness in commodity stocks, the group has a market capitalisation in excess of 4bn. Pre-tax profits more than doubled to $1.1bn, as the company cashed in on strong demand for its products and the global bull market for metals.

The Investment Column: Volatile Vedanta mines vein of long-term growth
Edited by Michael Jivkov Published: 02 June 2006
Our view: Long-term buy Share price: 1,378p (- 69p)

Vedanta made a profit of more than $1bn last year, a record for the mining company. It generated free cashflow of $600m, has next to no debt these days and is in pole position to enter the FTSE 100 in next week's reshuffle of the blue-chip index. Can things get any better for the miner?

Yesterday, Vedanta promised its shareholders that things would, by unveiling plans to become the only company to produce 1 million tonnes per annum of zinc, aluminium and copper by 2010. This in effect doubles its production.

There were only two areas were Vedanta slightly disappointed investors yesterday. Some in the City had hoped the miner would announce a higher dividend than the 14.3 cents a share it flagged. Given the awesome amount of cash the company generated, it certainly had the ability to reward shareholders with a higher payout. Also, Vedanta's Zambian copper business remains a high-cost operation by global standards.

Clearly, the awesome results produced by Vedanta reflect the high raw material prices globally. Kuldip Kaura, the chief executive, warned that there is a possibility prices will soften going forward. However, he argued that the rapid industrialisation of Asian nations would remain the primary driver of world-wide base metal demand and prevent prices from falling back too far.

In this assessment, Mr Kaura is probably right. As long as he remains so, Vedanta should continue to enjoy strong profitability. Although the shares are likely to remain volatile in the near future, it is worth tucking some away for the long term.