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%

Whose money are they giving away?

Analysts at Morgan Stanley said the increase in Chinese rates would ultimately benefit commodity prices and non-Chinese mining companies and metals producers, given the reduction in supply that would eventually feed through to end markets.

Global inventories of copper have sunk to critically low levels and supply concerns remain acute. Workers at Falconbridges Lomas Bayas copper mine in Chile were due to vote on possible strike action on Thursday.

AFX


LONDON (AFX) - Vedanta Resources PLC said its unit Hindustan Zinc Ltd ('HZL') has reported strong growth momentum on account of increased volumes and zinc prices.

Net sales for the fourth quarter and year ended March 31 2006 were up 142 and 76 pct respectively.

Profits before depreciation, interest and taxes for the fourth quarter and year ended March 31 were up by 242 pct and 136 pct, respectively

Net profit for the fourth quarter and year rose by 250 pct and 123 pct.

Lead metal produced during the year was 24,000 tonnes, including 4,300 tonnes from the recently commissioned 50,000 tpa Ausmelt lead plant.

Vedanta said preliminary work on the new 170,000 tpa zinc smelter at Chanderiya has commenced. The plant is expected to commissioned by early 2008, taking HZL's total zinc capacity to 570,000 tpa.

Into the FTSE100 we go in 4 weeks time and with metal prices soaring and not enough of the stuff to meet demand the sp on VED will fly past 20 in no time at all imho.

Financial Times.

Copper at new high on supply fears.
By Neil Dennis
Published: May 4 2006 17:40

Copper prices soared to new highs on Thursday as shrinking stockpiles of the metal and the continuing threat of production disruptions stoked supply fears.

BHP Billiton, the worlds largest miner, said that labour disputes and equipment shortages, added to rising global demand, would be likely to result in a shortfall of copper concentrate through to the end of 2008, while planned new mines and production plants come online.

John Croft, the mining groups base metals marketing executive, said that prices were unlikely to fall far while stockpiles remained at such low levels.

The London Metal Exchange reported that stocks in its warehouses had fallen to the lowest levels since April 19, and represented just two days of global demand.

But traders said volumes were starting to dry up as prices continued to hit a succession of new highs. Volume is dying away and liquidity is poor, said John Kemp at Sempra Metals. He added that hedge fund buying was providing the main prop, as speculators bet the market could continue to support higher prices.

I dont see what will turn the market around in the immediate near-term. People are just too scared to go short, he said.

By the close of trade in London, the three month LME contract stood at $7,650 a tonne, up $545 from the previous sessions close, but off a record of $7,680.


Gold prices hit a fresh 25-year peak of $677.40 an ounce as funds sought havens from geopolitical tensions in the face of an imminent UN Security Council resolution on Iran.

Meanwhile, it appeared there was significant reduction by gold miners in their hedging commitments in the first quarter. The worlds biggest gold miner, Barrick Gold, said it had cut its forward sales by 4.7m ounces. In total, the global hedgebook fell by 5m oz to 48m oz in the quarter.

this is certainly the value company at the moment. it is going into the FTSE100 next month and the big players and institutions are going to have to keep buying big-time. stock will become scarcer and the price then has to keep rising. all this is imo - dyor.

Very low price at the moment and, yes, given that VED is going into the FTSE 100 in a few weeks time and that it is already the 63rd biggest company, this is definitely a good time to buy and/or top-up.

seems like the mining sector is looking ripe for consolidation. how about Vedanta being bought out ??? price will go through the roof!!!

weird that people can sell a stock which is in a red-hot (mining) sector and about to enter the FTSE100 whilst copper and the global demand for it is still rising.

Things are looking good for Vedanta !!!!!!!!!!!!!


Reuters - Aluminium at 18-year peak, new copper record

Tue May 9, 2006 5:07 PM
By Nick Trevethan

Speculators pushed aluminium prices above $3,000 a tonne for the first time since 1988 and zinc and copper hit record levels on Tuesday as investors piled back into commodities after a shaky start to the week.

Aluminium hit an 18-year peak of $3,029 a tonne in electronic trade, driven by the volume of buying by funds and other investors who have moved in as industrial metals outperform more traditional assets.

Copper touched a new all-time high of $7,830, zinc climbed to a record $3,503, platinum stormed to unprecendented levels and gold was nearly $700 an ounce, its strongest in 25 years.

Oil futures were over $1 higher at $71.10 a barrel, nearing recent record highs of $75.35.

Base metals had wobbled on Monday, losing as much as three percent before recovering by the close.

"Aluminium is catching up with the rest of the complex, it was always projected to hit $3,000 or beyond," an LME trader said.

"I think it can go beyond that figure today, there is enough money coming and there is enough buying around", he added.

Barclays Capital analyst Ingrid Sternby said: "We have recognised in recent weeks that things are coming together for aluminium."

Sternby said stocks of the metal were falling, China appeared keen to rein in breakneck expansion by its power-hungry aluminium industry and demand was being buoyed by world growth.

"The support we have seen in prices has resulted in a positive trend and above $3,200 is the technical goal."

Three-months aluminium on the London Metal Exchange was $3,013 at the close, up 2.9 percent from Monday's $2,928 last trade.

LME copper for delivery in three months was at $7,815 against Monday's close of $7,630, and Sternby saw copper hitting $8,000 soon.

Dealers noted fees for converting copper ore into refined metals had dropped sharply in recent weeks, indicating that ore supplies were getting tighter.

"The copper concentrate market is tightening very quickly. That may mean there won't be enough concentrate for the smelters," a trader said.

Copper, used in wiring and tubing, has gained as much as 77 percent this year and has increased more than fivefold since 2001 on strong demand, especially from China and India, supply disruptions and speculative fund buying.

Last week the world's largest diversified miner, BHP Billiton, which produces copper and zinc, said prices were unlikely to fall until stocks rose from current low levels.

Robust global demand, labour unrest and supply disruptions at copper mines in Mexico and elsewhere lent support, while shortages of skilled labour and mining equipment were hampering efforts by producers to bring on new capacity.

Little progress has been made in talks to end a strike at Grupo Mexico's La Caridad copper mine after workers there walked off the job on March 24.

China Plans to Build Metals Reserves to Ensure Supply

May 10 (Bloomberg) -- China aims to build up strategic reserves of minerals such as uranium, copper and aluminum to help meet rising demand and provide a buffer against supply disruptions, the Ministry of Land and Resources said.

The nation plans to have ``sufficient reserves'' of uranium, and will start to amass stockpiles of copper, aluminum, manganese, tungsten and other minerals in the next few years, the ministry said in a statement on its Web site. The term ``sufficient reserves'' was not defined, and there were no specific targets for the eventual size of the mineral holdings.

``China's at a new stage of industrialization,'' Zhou Ming, a Shanghai-based metals analyst with Guotai Junan Securities Co. said today. If China wants to ``ensure its interests are unhurt, while sustaining growth, it must control enough of the world's key resources.''

China, the world's biggest consumer of steel, copper, and aluminum, recorded growth of 10.2 percent in the first quarter from a year earlier. The expansion, the fastest among the world's major economies, has contributed to a surge in many metal prices to records this year.

The country has already announced plans to begin building a strategic oil reserve as early as this year. The government has also urged companies such as Aluminum Corp. of China Ltd., the world's second-largest alumina maker, to secure raw materials overseas to make sure the nation's metals needs are met.

Joint Investment

The government and companies will jointly invest to build up the mineral reserves, the statement said, citing a five-year state plan. It didn't say how the reserves will be managed.

China's State Reserve Bureau currently oversees the nation's commodities reserves, including those in copper and steel. The bureau has lost hundreds of millions of dollars since late last year covering wrong-way bets on copper as the metal climbed to a record, Chinese traders have estimated.

The ministry said it will step up domestic exploration and increase the country's proven reserves of iron ore by 5 billion metric tons; of copper by 20 million tons; and of bauxite by 200 million tons by 2010. Bauxite is used to make aluminum.

The ministry wants to increase proven reserves of oil by 4.5 billion to 5 billion tons; natural gas by 2 trillion to 2.25 trillion cubic meters; and coal by 100 billion tons, the statement said.

The announcement of China's stockpiles initiative comes as prices of many commodities, including both base and precious metals, have been driven to all-time highs.

Shanghai Futures

Copper futures in Shanghai rose to a record for a third straight day today, taking their gain this year to 83 percent. Nickel futures in London have gained 48 percent in the same period, and zinc has jumped 82 percent.

``China has always been short of these materials, so the government needs to ensure they have enough,'' Zhou Feng, senior economist at the Information Center of China Minmetals Corp., the country's largest metals trader, said from Beijing today.

``It's probably because prices are high that people are linking'' them with the stockpiling plan, ``but this sort of policy isn't something that would have been decided just in the last few days,'' said Zhou.

The surge in commodity prices has also been underpinned by an increase in speculative investment in metals and energy by hedge and pension funds seeking better returns than from stocks and bonds. Money in commodity index investments may rise 38 percent to $110 billion this year, Barclays Plc has estimated.

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.