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%

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.

Times 2 June 2006

Anil Agarwal, the Indian metals tycoon who has taken Vedanta Resources to the brink of FTSE 100 membership, may move into coal to cash in on Indias demand for energy. Vedanta reported a 109 per cent rise in attributable full-year profits to $373.5 million.

Onwards and upwards.

Broker Recommendations - Friday 2nd June 2006, 12:15 pm

Deutsche reiterates buy Vedanta Resources (LSE: VED.L - news) with a 16.60 target.

Merrill says buy Vedanta Resources.

Morgan Stanley has overweight on Vedanta Resources (2300p target).

Copper Futures Increase on London Metal Exchange, Erasing Earlier Decline

June 2 (Bloomberg) -- Copper rose on the London Metal Exchange, reversing an earlier decline, on speculation that supply won't keep up with increasing demand for the metal.

A shortfall in copper supplies will give an ``upward shift'' to prices in the next three to five years, Xstrata Plc's copper chief Charlie Sartain said on the sidelines of the Minerals Council of Australia 2006 Minerals Week in Canberra on May 31.

Copper for delivery in three months on the LME was $115, or 1.5 percent, higher at $7,825 a metric ton as of 10:36 a.m. local time. Copper has declined 4.9 percent this week, reducing its gain this year to 78 percent.

``It's bottomed and is heading higher over the next week,'' Peter Hollands, managing director of U.K. consulting company Bloomsbury Minerals Economics Ltd., said in a telephone interview.

BHP Billiton, the world's largest miner, on May 4 said there's likely to be a deficit of copper concentrate between 2006 and 2008. Copper concentrate is an intermediate product that is refined into metal, which is used in wires and pipes.

Supplies are been disrupted by labor disputes and equipment and worker shortages.

A strike at Grupo Mexico' SA's La Caridad mine, Mexico's second-largest copper mine, began March 24. Grupo Mexico miners walked off the job at the Cananea copper mine yesterday in a dispute with the government over recognition of a union leader. Cananea is the company's largest mine in Mexico, producing almost half of the refined copper that the company produces in Mexico.

Among other metals for delivery in three months on the LME, lead rose $20, or 1.9 percent, to $1,060 a ton. Zinc gained $95 to $3,600, nickel added $250 to $20,800 and aluminum rose $20 to $2,630. Tin was the only metal to decline, by $10, to $8,175.

Surge in commodity prices is no bubble

By: Geoff Candy Posted: '02-JUN-06 07:00' GMT Mineweb 1997-2004

JOHANNESBURG (Mineweb.com) -- The huge surge in commodities prices is no bubble, delegates at the World Economic Forum on Africa heard yesterday.

At a session entitled The Commodities Market: Riding the Bull Run, delegates heard the views of Jeffrey Currie, MD and head of commodities research at Goldman Sachs, Obiageli Katryn Ezekwesili, Minister of Solid Minerals for Nigeria and Sir Mark Moody-Stuart, Anglo Americans chairman.

What came out of the session is that commodity industry is not a bubble and, while prices are at or near record highs, miners are not producing astronomically high returns.

The primary reason is the significant rise in costs, partly because of the lack of investment across the board and, partly as a result of an increase in regulation, especially environmental regulation and the costs involved in ensuring transparency.

According to the delegates the gold price, whose fluctuations have been historically linked to currency movements diverged from this correlation in September 2005, has once again reconnected, but the equilibrium level has been moved from $300/oz to $650/oz.

The divergence was driven by: the introduction of gold exchange traded funds (ETFs), stagnating production, increased jewellery demand and speculation from central bank purchasing.

This demand for such ETFs has recently reached a plateau, which has resulted in the reconnection with currency movements.

Delegates heard that the fact that long prices have shot up more quickly than spot prices is evidence that the bubble is underpinned by buying from industry players, rather than speculative buying by funds.

An industry that in the long-term cycles between phases of investment and exploitation, the commodities industry is currently at the beginning of a new investment phase. And, it is one that could last at least a decade longer than the last one.

While investment has been surprisingly slow, this was shown to be a sign that this cycle is somewhat different to previous boom-bust type scenarios.

The investment in new mines and infrastructure currently under way is happening in an increasing cost environment without the tax subsidies that characterised the last cycle.

However, because this is a cycle albeit an extended one, the current investment will ultimately result in an excess of supply which will drive prices down.

The question on everyones lips is how long this cycle will last? And, the answer seems to lie in the question of costs.

The current spike in costs is the main reason behind industry reluctance to invest, but as production is scaled up costs could go either way and, until such uncertainty is resolved, prices will remain high.

Prices are recovering a little lets hope the carry on upwards for a change.

Dropped nearly 5.5%...what a bargain.

"Source: Dow Jones Base Metals Board

London Metal Exchange three-month copper slipped lower through the afternoon session as light but persistent selling from investors pushed prices below $7,500 a metric ton, traders said.

The sell-off was largely attributed to overnight anti-inflationary comments by U.S. Federal Reserve Chairman Ben Bernanke.

Analysts said Bernanke's hint of further interest rate hikes, combined with recent weaker-than-expected U.S. data, points to a slowdown. Until further clarity on how long a tightening period may last, base metals look set to remain volatile, they added.

LME copper hit an intraday low of $7,485/ton, down 4% on the day and a 15.2% drop on the all-time high of $8,825/ton hit May 11. The market closed the kerb session at $7,510/ton.

But in the background, an ongoing strike at Grupo Mexico's La Caridad and Cananea operations, along with still low inventories and a slow supply side response to rising demand is underpinning the market, traders said.

"Because of supply constraints and low inventories, we continue to believe downside risk to the copper price is limited, although upside pressure is also likely to ease amid a seasonally weaker period for demand ahead," said Barclays Capital.

"Importantly also, the physical copper market in China is currently very weak," Barclays Capital added.

The other base metals were far more resilient than copper, although ended the session generally lower.

LME aluminium and zinc were both down but still within their recent ranges.

Of these two metals, analysts said aluminium has the more bearish fundamentals, with the cost of its key ingredients, alumina and power, down in recent days.

In contrast zinc remains in a market deficit, with demand growth from China very strong and supply not anticipated to catch-up until 2008."



The last para' is important because vedanta gets more than half its profits from zinc.