This in spite of third quarter contract values in Scandinavia being higher than spot figures in mainland Europe. Flat products prices have been supported by a stronger than average economic recovery in the Nordic countries, especially Sweden, MEPS said.

“However, consumption across Europe is not anticipated to pick up quickly,” the report stated. “There is a widely held view that steel makers will need to cut production in order to balance supply with demand and support prices.”

Long products prices have generally fallen in northern Europe this month. Products, such as rebar, are most directly influenced by the cost of ferrous scrap, the consultancy said. Sales volumes have held up well in the run up to the summer stoppages.

MEPS said the stainless steel market is quiet due to the impending vacation and nervousness regarding nickel values. Sales activity was reasonable in June despite the anticipation of low alloy surcharges in July, the report said.

“Consumption by the automotive and engineering industries is good but most steel makers can see no orders beyond September/October, according to MEPS.

“Some Scandinavian suppliers sold reasonable tonnages in June, thanks to increasing demand from the shipbuilding and offshore sectors,” according to the consultancy. “Observers are cautiously optimistic about activity in the second half of 2010”

This report is based on Chinese industry classification (Industrial Classification For National Economic Activities, GB/T 4754-2002).
Additionally, by original creation of ZEEFER Industry Distribution Index, the report directly shows the difference in various regions of Mainland China in terms of copper ores mining industry, providing an important reference for investors’ selection of target regions to make investment.

What will you get from this report?

- To get a comprehensive picture on distribution of and difference in performance in regions of Mainland China in terms of the copper ores mining industry;
- To figure out the hot regions in China for copper ores mining industry, find out the potential provinces and cities suitable for investment as well as the economic development level and investment environment in these regions;
- To get a clear picture on the overall development, industry size and growth trend of copper ores mining industry across China in the past 3 years;
- To get a clear picture on development status of foreign enterprises, state-owned enterprises, and private enterprises in recent years as well as the industry position of the above ownerships;
- Present you with a list of top 20 enterprises inside the industry;

Regions Covered By This Report.

- All the 31 provincial regions in Mainland China;
- Top 20 cities in terms of copper ores mining industry.

Enterprise Types Covered By This Report.

- Top 20 enterprises;
- Enterprises Funded by Foreign Countries (territories), Hong Kong, Macau and Taiwan;
- Chinese State-owned Enterprises;
- Collective-owned Enterprises;
- Cooperative Enterprises;
- Joint-Equity Enterprises;
- Private Enterprises.

ZEEFER Industry Distribution Index

It is an indicator through aggregate weighted computation based on the three authority statistics of enterprise numbers, sales revenue and profit by region and corporate ownership, and in accordance with the regional distribution of leading enterprises inside the sector. Through horizontal comparison on the copper ores mining industry development in different provinces, municipalities, and autonomous regions, the ZEEFER Industry Distribution Index is specially designed to truly reflect the conditions of regional distribution for the copper ores mining industry, providing a quantitative, visual and reliable reference for relevant users to make decisions. The ZEEFER Industry Distribution Index adopts a hundred mark system. For a certain region, the higher the score, the higher the distribution concentration in this region and the industry position of the region shall be more important.

Key Topics Covered:

1. Overview

2. The Nationwide Distribution Of Copper Ores Mining Industry In China

3. Introduction To Major Cities

4. Nationwide Distribution Of Foreign-Funded And HK-, Macau-, And Taiwan-Funded Enterprises In Copper Ores Mining Industry

5. Nationwide Distribution Of Foreign-Funded Enterprises

6. Nationwide Distribution By Enterprise Numbers

7. Sales Revenue Of Foreign-Funded And HK-, Macau-, And Taiwan-Funded Enterprises By Region

8. Sales Revenue In Different Regions For Copper Ores Mining Industry

9. Nationwide Distribution Of Top 100 Enterprises In Terms Of Sales Revenue

10. Comparison Of Foreign-Funded And HK-, Macau-, And Taiwan-Funded Enterprises

11. Analysis On Operating Status Of Enterprises By Corporate Ownership

12. Analysis On The Changes In Number Of Enterprises By Corporate Ownership

13. Analysis On The Changes In Sales Revenue By Corporate Ownership

14. Comparison On The Rate Of Return On Assets Of Enterprises

15. Comparison On The Investment Environment Indexes Of 10 Major Regions

16. List Of Top 20 Enterprises In Terms Of Sales Revenue

17. Index Explanation

Results were boosted by strong increases in volumes from the company’s Australian operations, as well as higher prices for metallurgical coal.

On a per share basis, adjusted income from continuing operations rose 38%, to $0,69 a share, which was above analyst consensus expectations.

Peabody, which mines coal in the US and Australia, said that earnings before interest, tax, depreciation and amortisation (Ebitda) rose 35% year-on-year, to $440-million, and revenue was up 24%, to $1,66-billion, helped by an almost doubling of revenue from Australian operations.

“Our global platform is expected to continue to capitalize on rising volumes and prices, and the continuation of our strong operating performance,” CEO Gregory Boyce said in a statement.

“We expect second half results to be stronger than the first.”

Peabody said it has raised the midpoints of its 2010 earnings targets, and is now expecting adjusted earnings per share of between $2,60 and $3,15 a share, excluding currency remeasurement.

Full-year Ebitda is forecast at between $1,7-billion and $1,9-billion.

The company sold 59,7-million tons of coal in the second-quarter, slightly higher that the 59,4-million tons reported for the same period of 2009.

Quarterly sales were helped by a 28% increase in Australia shipments,

Peabody has maintained its 2010 sales guidance of 240-million to 260-million tons, including US production of between 185-million and 195-million tons and Australia production of 27-million to 29-million tons.

Shares in the company slid 0,3% on Tuesday morning, to $42,19 apiece by 10:00 in New York.

Australia’s Foreign Review Investment Board approved the investment by CCMD in February.

Project owner Asia Iron, a wholly owned subsidiary of Hong Kong-headquartered SINOM Investments, will now issue new shares to CCMD.

CCMD has released a $40-million prepayment, with completion of the transaction subject to other conditions, including CCMD receiving approvals and signoffs from other relevant Chinese regulatory authorities. These were expected within the next month.

Following completion, the parties will immediately start preliminary works for the project development.

Under the terms of the agreements, funding for the development of stage one of the Extension Hill magnetite project, which will target production of ten-million tons a year of high-grade iron-ore magnetite concentrate, will be provided by proportional debt and equity contributions from CCMD and SINOM, along with project debt financing from a Chinese bank.

The Extension Hill project has a Joint Ore Reserves Committee compliant reserve of over 200-million tons, and a resource of 240-million tons grading in excess of 68% iron.

The iron ore production touched 125.0 million metric tons over the year and 31.2 million tons in the fourth quarter, level with the third quarter.

Current quarter production was impacted by tie-in activities at Western Australia Iron Ore as Rapid Growth Project 4 continues to ramp up. Following demand related production adjustments, Samarco returned to full production during the year ended June 2010, delivering a record result for the operation.

For the 2010 financial year, 39% of Western Australia Iron Ore shipments on a wet metric tonne basis were priced on annually agreed terms, with the remainder sold on a shorter term basis. During the second half of the financial year, the old benchmark pricing system was substantially replaced by shorter term market based, landed pricing. Our expectation is that future Western Australia Iron Ore shipments will be priced on this basis.

More men get the three highs (hypertension, high blood cholesterol, high blood sugar), metabolism syndrome and chronic kidney disease than women. For instance, 27.2 percent of male above age 20 have hypertension, while only 21.4 percent of female in the same age group have it.

The results also showed that men have worse health awareness than women, as they go to clinics and have health checks less often, yet has an equal use of emergency services and have more hospital stays.

Also, more men smoke and eat betel nuts, and more men are overweight and obese.

BHP has now on their website “Father’s Day Electronic Health Cards” for the public to download, so that children can sign and give it to their fathers to remind them the importance of health.

In a solid final production report for fiscal 2010, the world’s biggest resources company also revealed better than forecast petroleum output, with other commodities in line with expectations.

Head of resources research at UBS, Glyn Lawcock, said the miner had exceeded forecasts on shipments of metallurgical coal, used in steelmaking, which was selling at high prices.

“They have absolutely ripped it with metallurgical coal,” Dr Lawcock said.

“We were looking for 30 per cent growth (in shipments) on the quarter and they did 50 per cent growth on the quarter,” he said

“It is a good thing to be doing when you are selling metcoal at $US200 per tonne, so that is a big plus,” he said.

Dr Lawcock said at current forecasts BHP’s annual profit was expected to come in at $US12.3 billion ($13.94 billion), but with new figures that could rise.

The company made 9716 shipments of metallurgical coal in the June quarter, with 32,001 for the year.

Demand for metallurgical coal has been strong following a recovery in steel production in Asia and Europe, causing prices to rise.

Shares in BHP Billiton gained 73 cents, or 1.91 per cent, to $39.03, the highest since June 24, by 11.51am (AEST).

BT Financial Group portfolio manager Tim Barker was also impressed with the metallurgical coal figures, and said the rest of the report was in line with his expectations.

“The numbers (for metallurgical coal) were certainly more than I would have expected,” Mr Barker said.

Petroleum delivered its third consecutive annual production record, with output for the year up 15 per cent.

Dr Lawcock said the petroleum figures were slightly better than he expected, but spending on exploration was higher than forecast.

“The headwinds coming into this result is that they expensed a lot of petroleum expenditure, close to $US500 million for the second half versus $US75 million in the first half, so that is going to weigh on earnings estimates,” Dr Lawcock said.

“Offsetting that will be the positive from more metcoal,” he said.

Iron ore production rose nine per cent for the year, to an annual record, on the back of strong demand from China.

The company told the stock exchange that measures introduced by China to reduce the nation’s growth to sustainable levels meant volatility in commodity end-demand was likely to persist.

The miner also said it was cautious about the short-term outlook on the global economy.

“Uncertainty surrounds the near term prospects for growth in the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels,” BHP Billiton told the stock market.

The impact of an outage at BHP Billiton’s giant Olympic Dam project in October following problems with a haulage unit impacted on the company’s production of some commodities.

Olympic Dam in South Australia is the world’s largest uranium deposit, fourth largest remaining copper deposit and fifth largest gold deposit.

Copper production was down 11 per cent on the previous year, while uranium production fell 43 per cent and gold fell 19 per cent.

Production of alumina was also up for the year despite an unplanned interruption of ship unloading capabilities at its part-owned Alumar refinery in Brazil.

For the year BHP Billiton spent $US516 million on minerals exploration, of which $US467 million was expensed.

It said projects including its North West Shelf life extension works, its iron ore rapid growth project 5 in Western Australia, and its expansion of the Antamina copper mine in Peru were on schedule and on budget.

Copper -3250MT

Lead -1000MT

Zinc +1425MT

Nickel 0MT

Aluminum +48275MT

Tin -245MT.

The Swedish firm, mainly focused on copper and zinc, said the expansion of its Aitik mine had helped boost copper production by more than half in the period but borrowing costs had risen as a result of the expansion. It had also suffered higher costs due to the temporary shutdown of a smelter in May.

“The maintenance shutdown at Ronnskar is largely responsible for the deterioration in operating profit in comparison with the first quarter,” the company said in a statement, referring to the performance of its smelting business.

Boliden said output at its Aitik mine would reach full capacity of 36 million tonnes of ore a year by 2014, but said it had incurred higher interest costs on its investment.

Analysts said this and the smelter shutdown were weighing on Boliden shares.

“Estimates will be lowered partly because of … Aitik and partly because costs have been higher than expected,” said Fredrik Agardh, an analyst at Handelsbanken Capital Markets.

Boliden’s shares, down over 10 percent in the past month, dropped a further 4 percent on Monday to 83 crowns from 86 before the results were released.

Chief Executive Lennart Evrell said increased production volumes, the new Aitik facilities and the maintenance shutdown had increased costs by 503 million crowns compared with the same period last year.

METALS VOLATILE

Zinc prices have dropped sharply this year, with three-month zinc down 30 percent at the end of the second quarter from the end of 2009, partly due to excess production and stock. The outlook for copper prices is also uncertain. [ID:nLDE66415K] [ID:nLDE6661FD]

Boliden said its zinc output was unchanged from the first quarter, while copper production had risen 51 percent.

“There is uncertainty regarding metal prices — no positive trigger in that area — so I expect quite a few downward revisions of estimates based on this report,” said an analyst who asked not to be named.

Operating profit at the firm came in at 1.12 billion crowns ($153 million), slightly below the average forecast for 1.3 billion crowns given in a Reuters poll of 10 analysts. Quarterly revenue came in at 8.9 billion crowns, which compared with an average forecast of 9.2 billion forecast.

Cape Lambert would gain a 33% stake in the Marampa rail and Pepel port, jointly known as the Marampa infrastructure, for a $45-million investment in the refurbishment of the infrastructure.

African Minerals would retain a 57% holding in the Marampa infrastructure, while the Sierra Leone government would hold a 10% stake.

African Minerals, through a special purpose vehicle, would oversee the refurbishment and daily operation of the infrastructure, which would be completed by March.

Once the refurbishment of the Marampa infrastructure is completed, Cape Lambert would have the rights to a minimum throughput of two-million tons a year.

Meanwhile, African Minerals was also looking to construct a new railway line to link its Tonkolili iron-ore project with the new port at Tagrin, at which time it would cease using the Marampa infrastructure.

Cape Lambert chairperson Tony Sage said that the company has been granted an option to match any third-party offer to acquire African Minerals’ stake in the Marampa infrastructure, which could be exercised once the Tonkolili infrastructure was operational.

“This agreement ensures the Marampa iron-ore project has access to suitable infrastructure, which we expect will provide a significant value uplift when we come to sell the project” sage said.

In November, Cape Lambert increased its shareholding in the Marampa project from 35% to 100%, when it acquired the balance of the project from African Minerals in a deal valued at around A$31-million.

The project comprises 305 km2 of granted exploration licence, an inventory of haematite tailings and a brownfield exploration tenement representing the extension of haematite mineralisation to the north and west of the former Marampa mining operations, as well as a number of regional exploration targets.

“Everywhere we look in this region, we see growth,” Martin Abbott, chief executive officer of the LME, said in an interview on Bloomberg Television in Singapore today. “All of the numbers are so impressive,” Abbott said.

Asian nations including China are leading the global economy out of recession, boosting demand for metals such as copper, nickel and tin. The LME has announced talks with Singapore Exchange Ltd. on cooperation, and plans more metal warehouses in the world’s fastest growing region.

“We are recognizing that the growth in Asia is not cyclical, it is structural, and more and more of the business that we transact is going to be derived in this region,” Abbott said. “This is not simply a China story.”

Three-month copper futures have advanced for seven of the past eight years driven by rising Asian demand, and the contract has climbed 37 percent in the past 12 months to $6,664.75 a metric ton today. The LMEX Index of six industrial metals has gained 30 percent over the past year.

‘We See Growth’

“When you look at what’s happening throughout Asia, I think we’re looking at a long-term story of infrastructure build, industrial build and GDP growth,” Abbott said, citing expansions in Indonesia, Vietnam and Malaysia.

Abbott’s view echoes that of commodity bulls such as Singapore-based investor Jim Rogers, who has said that economic growth in Asia is powering demand. Rogers said earlier this week that “you should own commodities because that’s your only refuge,” backing silver and farm goods such as rice.

The International Monetary Fund yesterday raised its forecast for global growth to 4.6 percent this year, reflecting a stronger-than-expected first half. The lender increased the 2010 growth forecasts for China to 10.5 percent and for India to 9.4 percent for the year to March.

China’s economy expanded 9.1 percent last year, boosted by an unprecedented 9.59 trillion yuan ($1.4 trillion) of credit extended by banks in 2009 and a 4 trillion yuan, two-year fiscal stimulus plan. The nation is the world’s largest metals user.

Indonesia, Southeast Asia’s largest economy, may accelerate to 5.9 percent growth this year, Finance Minister Agus Martowardojo said yesterday.

Singapore Talks

The London-based metal exchange, founded in 1877, has begun talks with Singapore Exchange Ltd., operator of the local derivatives and securities exchange, on possible cooperation, according to a statement yesterday. The LME opened its first overseas office in the Southeast Asian city-state this year.

“The crisis has been a huge opportunity for the LME,” Abbott said yesterday to mark the exchange’s new Singapore office, referring to the global credit crisis. “We have actually seen more business coming onto the exchange because of the crisis, because companies are even more aware of the need for counterparty risk management.”

Abbott, who became chief executive of the LME in 2006, has overseen the introduction of cobalt and molybdenum futures. Trading volumes last year were the second highest on record after 2008, with a notional value of $7.4 trillion.

“We are agnostic about price,” Abbott said today. “We are not agnostic to cyclical and structural trends,” such as the industrialization of Asia, he said.

Ledsham said while visiting Zambia, Africa’s largest copper producer, that the Konkola North project, Vale’s joint-venture project with African Rainbow Minerals was the first of other projects Vale planned to develop in Africa.

“Our goal is to start implementation of the project in September this year and begin production by 2013. The capital required is around $400-million which we will invest in two and half years,” Ledsham said during a business meeting in Lusaka.

“We (will be) starting with 50 000 t of copper per year before going to 100 000 t in the second phase when we expand the mine by 2015,” Ledsham said

Ledsham said the Konkola North underground mine would employ about 1 500 people once its development started.

He said Vale was also involved in exploration works and planned to invest in Nickel mining in Zambia after completing the copper mine.

Diversified South African miner African Rainbow said in May that it planned to divest from a gold project in Namibia by June and finalise the development of the Konkola copper project with Vale.

Copper mining is Zambia’s economic mainstay and the mines are a major employer in this southern African country of 12-million people.

Foreign mining companies in Zambia include London-listed Vedanta Resources, Canada’s First Quantum Minerals, Glencore International of Switzerland and Metorex of South Africa.

China dominates production with 95% of global supply of the group of metals, a crucial ingredient in the motor magnets used in hard disk drives, CD ROMS and DVDs and electric cars.

The newspaper, citing industry sources, said the plan for a unified pricing mechanism covering Jiangxi, Fujian, Guangdong, Hunan and Guangxi provinces is expected to be implemented as early as this month.

The five areas will establish a unified transportation and sales system and are expected to consolidate production into 3-5 conglomerates in the long term.

“In the long run, steps will be taken to heighten the influence of domestic miners on the price of the minerals in the global market,” China Daily quoted an unnamed source as saying.

China’s Ministry of Commerce issued a second batch of 2010 export quotas for rare earths on Thursday, allowing 32 companies to export up to 7 976 t.

In the first five months of the year, China exported 18 786 t, three times as much as in the same period of 2009.

China has already put limits on rare earth production and stopped issuing new exploration licences until June 30, 2011. It also launched a crackdown on illegal rare earth mining last month to stamp out unauthorised supplies.

Its leading producer has also been given permission to set up a strategic reserve in the northern region of Inner Mongolia.

Furthermore, Baosteel stated, as the traditional low season for the steel market approaches, Chinese domestic mills will come under great pressure given the strength of iron ore prices.

Work and exploration will restart at three coal projects in Queensland state Zug, totaling A$186m says the Switzerland-based company. The CEO of Rio also said it is reopening studies for expansion of its iron ore operations in the Pilbara region.

Xstrata also said a development decision for the Wandoan project is expected in 2011. This comes after said Prime Minister Julia Gillard earlier agreed to cut the tax to by 10% to 30%, a week after ousting Kevin Rudd as the nation’s leader to defuse a row with mining companies.

“Today’s decision effectively lifts the suspension on expenditure announced by Xstrata last month and allows the next stage of planning for this internationally significant Wandoan project to proceed,” Xstrata Coal CEO Peter Freyberg said in the statement.

Shares in London-based Rio fell 0.2% to A$65.10 at the 16:10 close on the Australian stock exchange.

An expansion of Rio’s iron ore mines in Western Australia’s Pilbara region will boost capacity to 330 million tonnes by 2015 and final approval is due later in 2010, according to Citigroup’s Clarke Wilkins. The broker last year estimated the expansion may cost A$12bn. Their capital spending this year may be between A$5bn and A$6bn, Rio said in March.

“With the certainty we’ve now got with the minerals resource rent tax, we are now configuring those numbers and impact back into our projects,” Walsh said. “There is still an amount of work to be done in relation to tying up the valued engineering work.” He didn’t give a time for when the project may be approved.

Gillard’s compromise means the minerals tax will now only apply to coal and iron ore mines and affect 320 companies instead of the 2 500 under Rudd’s proposal. Projects will also be entitled to a 25% extraction allowance that reduces taxable profits.

The Reuters/Jefferies CRB Index of 19 raw materials ended the second quarter with a decline of 5.4 percent, the most since the final three months of 2008, after the first quarter’s 3.5 percent loss. The gauge may fall to 251, compared with 253.80 on July 6, and a break of that level may lead to further declines to near the 2010 low of 247.25 in July, Dhiren Sarin, Barclays’ technical analyst said.

“The outlook is bearish for the CRB Index,” London-based Sarin said in an interview. The trend “is likely to remain in play into this quarter as the market is caught within its weekly cloud and is still within a larger bearish channel.”

The CRB Index had risen for three consecutive weeks in June before declining 4.2 percent last week, the most in two months. A drop back below the “open gap” at the 256/258 level formed in June signaled at a reversal in the trend, Sarin said.

Raw materials from zinc to soybeans have slumped this year on concern that Europe’s sovereign-debt crisis may harm economies. Crude has slid 9.1 percent this year in New York, soybeans fell 14 percent in Chicago and zinc tumbled 28 percent in London.

In technical analysis, investors study charts of trading patterns to predict changes in prices.

HOT ROLLED PLATE

US transaction figures have failed to hold at the May levels for hot rolled plate, despite little change in demand and a scarcity of imports,” MEPS said.  Sales to wind turbines, infrastructure and defense projects are firm but service centers report that few sectors for commodity plate are exhibiting any real strength. The Canadian market is described as satisfactory with particularly good performance in the wind tower and bridge building industries.
“Customers have conceded a small increase,” MEPS said. “However, demand from the construction sector is lacking, with distributors finding it difficult to make sales. A price slide over the summer cannot be ruled out.”

COLD ROLLED COIL

For cold rolled coil, tepid demand from distributors and some consumers, together with weakening scrap costs, has put negative pressure on cold rolled coil transaction values in the US,  MEPS said, despite some pick up in auto manufacturing.
“Service centers continue to keep stocks to a minimum.” The report said. “The Canadian mills have some holes in their June/July production schedules, leading to short delivery lead times. Thus, transaction numbers have fallen from the levels of a month ago, although, the steelmakers are indicating that they fully expect them to rebound in August. Buyers are starting to receive more import offers but they are not attractively priced.”

COATED COILS

Auto demand for coated steel is still very strong in the US, MEPS said. Car sales improved again in May as the sector rebounded from a poor 2009. A state incentive scheme to persuade customers to purchase new, energy saving domestic appliances appears to be having a positive impact.
“Nevertheless, both hot dipped galvanized and electro-zinc coated coil transaction figures have slipped in recent weeks,” the report said. “The Canadian auto sector continues to perform quite well, although demand is expected to ease as the summer approaches. The mills have conceded a discount on recent sales of hot dipped material. However, there is little import competition with offers in line with, or higher than, domestic ones.”

WIRE ROD
The escalating price trend in the US has reversed over the last few weeks. The number of import offers has grown, relieving the tightness in supply from domestic sources, MEPS said.  In Canada, current spot numbers are $C20 per tonne below the May level. Business conditions are lackluster.

MEDIUM SECTIONS AND BEAMS

For medium sections and beams, MEPS said it had noted some price cutting in recent weeks in the US, where producers have very poor order books and are also having to cope with increased import penetration.
“Consumption in the non-residential construction sector remains at a dismal level,” the report said. “Canadian mill order intake is steady at best. End-user activity is slow and unlikely to improve in the short term. Customers are keeping inventories to a minimum.”

REINFORCING BAR

In the US, service centers are loath to hold much stock, the MEPS report said. Sales are weak. As scrap prices drop away, rebar transaction figures have begun to decline. “The reductions anticipated by Canadian customers in May have already started to take hold,” MEPS said. “Demand is dull with no significant changes envisaged in the near-term.”

MERCHANT BAR

In the US, Nucor surprised customers by reducing merchant bar transaction values by considerably more than the small $US5 per ton decline in the scrap surcharge, MEPS said.  “Service centers are particularly angry about the stock losses they will incur,” MEPS said. “Activity remains muted. Canadian demand is feeble. Transaction numbers trended upwards in May but there has been no movement since then. Improvement is unlikely in the near future. Although some imports are available, prices are not attractive.”

While London Metal Exchange futures anticipate prices no higher than $6,519.50 a metric ton through the end of 2011, or 1.2 percent more than for delivery now, 13 of 14 analysts surveyed by Bloomberg expect a shortage next year. Traders are being too bearish because lower prices may curb spending on mines and exacerbate future shortages, said Goldman Sachs Group Inc., which forecasts a price of $8,050 in 12 months.

“In the short-term, we’re looking at slowing growth and oversupply, but longer-term, things look good,” said Michael Pento, the chief economist at Delta Global Advisors Inc. in Holmdel, New Jersey who correctly predicted January’s slump that began this year’s 12 percent decline. “The smart move is to buy copper for a few quarters down the road.”

Codelco Chief Executive Officer Diego Hernandez said last month that higher costs and lower ore grades mean new global supply “is coming very slowly.” Freeport-McMoRan Copper & Gold Inc. Chief Financial Officer Kathleen Quirk said new finds are “extremely rare” and “it is a very constrained market from a supply standpoint.”

Metal for delivery in three months, the benchmark contract, slumped 20 percent since April to $6,469 on concern the economic recovery would slow in the second half. Manufacturing growth weakened last month in China, Europe and the U.S., which account for as much as two-thirds of global demand.

Lower-Quality Ore

Copper for delivery in August is next year’s most expensive contract on the LME, trading at $6,519.50. Metal for immediate delivery costs $6,439.75. The first-half drop of 12 percent was the worst since 2001. The highest prediction for next year’s average in Bloomberg’s survey of analysts was $8,157 from Bart Melek, a commodity strategist at BMO Capital Markets in Toronto. That’s 26 percent more than now.

Mining companies are already missing analysts’ output forecasts because of lower-quality ore, providing “a bullish pricing signal,” Credit Suisse Group AG analysts led by Liam Fitzpatrick in London said in a report June 30.

For now, traders are focused on demand. China’s growth will slow to 9.25 percent next year, from 10.1 percent in 2010, according to as many as 27 economists surveyed by Bloomberg. The country’s refined-copper imports fell 8.1 percent in April and 9.7 percent in May.

U.S. President Barack Obama said June 29 that the world’s biggest economy is facing “headwinds” from the sovereign-debt crisis in Europe, where governments are cutting budgets. U.S. growth will slow to 2.9 percent in 2011 from 3.2 percent this year, while the euro zone will accelerate to 1.3 percent from 1.05 percent, according to surveys of as many as 66 economists.

Global Equities

More than $7.4 trillion was wiped off the value of global equities since mid-April because of concern slowing growth will sap demand. Energy and commodities companies led this year’s 12 percent decline in the MSCI World Index of developed markets. The S&P GSCI Total Return Index of 24 raw materials fell 14 percent.

Copper producers will have to develop new supplies even if demand stagnates, Quirk of Phoenix-based Freeport, the world’s second-biggest copper miner, said at a conference in New York on June 4. Average ore grades fell about 26 percent in the last two decades, according to Deutsche Bank AG. Next year’s shortage may be the biggest since 2004, Macquarie Bank estimates.

Deeper Discoveries

A greater proportion of discoveries in the last 10 years were more likely to need deeper mining methods than in the previous two decades, according to a presentation in May by London-based Rio Tinto Group. It cost about 95 cents to extract a pound of copper from an open pit mine in 2008, compared with $1.33 from an underground mine, according to data from Addlestone, England-based researcher Brook Hunt, a Wood Mackenzie company.

Prices may exceed the record $8,940 reached in July 2008 as early as the first quarter, according to Leon Westgate, an analyst at Standard Bank Plc in London who forecast this year’s plunge. Copper will average $7,708 next year, the highest ever, according to the median in the Bloomberg survey of 14 analysts.

Demand will expand 6.4 percent to 19.98 million tons next year, the biggest gain since 2007, Morgan Stanley predicts. Refined copper from mines and scrap recycling will reach 19.95 million tons, the bank estimates. That production is worth about $143 billion at this year’s average price on the London Metal Exchange.

‘Declining Ore Grades’

The surplus will shrink next year because of “declining ore grades in mines, infrastructure problems and postponing planned mine projects due to problems with project financing,” Herbert Wirth, chief executive officer of Lubin, Poland-based copper miner KGHM Polska Miedz SA, said in an e-mail.

“The portfolio left to be developed has a lower quality than we have been used to for many years,” Hernandez of Santiago-based Codelco, the world’s biggest producer, said in an interview in New York last month. “For these new projects to be developed we need a higher copper price.”

Anglo American Plc, based in London, reported in April that first-quarter output dropped 14 percent from the previous three months because of lower ore grades. BHP Billiton Ltd. and Rio Tinto, the world’s biggest and third-largest mining companies, said the same month that year-on-year production in the period declined for the same reason.

Stockpiles monitored by the London Metal Exchange fell 20 percent to 444,500 tons since mid-February, equal to almost 9 days of global demand. Canceled warrants, or metal earmarked for delivery from warehouses, totaled 35,425 tons on July 1, the highest since March, data from the bourse show.

‘Decline Again’

“Copper supplies have started to decline again,” said Andrew Karsh, who helps manage $4.8 billion for the Credit Suisse Total Commodity Return Strategy team in New York. “What we see is a continual benefit in terms of the demand for copper.”

Stock analysts are already anticipating higher profit for mining companies. Freeport will report earnings per share of $8.17 this year and $9.14 next year, compared with $5.86 last year, according to the mean estimate of eight analyst estimates compiled by Bloomberg. Shares of the company fell 27 percent in New York trading this year.

Aurubis AG, the world’s largest copper smelter, gained 14 percent in Frankfurt trading. A shortage probably began in March and continued through the second quarter, CEO Bernd Drouven said in an e-mail. The company will report earnings per share of 3.59 euros ($4.50) this year, compared with a loss of 1.15 euros in 2009, according to the mean of eight analyst estimates.

BHP Billiton

BHP Billiton, based in Melbourne, fell 16 percent in London this year and Rio Tinto declined 15 percent. KGHM fell 14 percent in Warsaw. Codelco, the world’s largest copper producer, is not publicly traded.

“The industry as a whole is facing significant challenges,” said Greg Waller, vice president of investor relations at Vancouver-based Teck Resources Ltd., which mines copper in North and South America and expects to increase output by 40 percent in two years. “In 2011, we are expecting that growth will be back on track and consumption of copper will be strong while the supplies are tight.”

Stockpiles tracked by the London Metal Exchange fell for a 12th day today and have slid for 33 of the past 34 sessions. Bookings to remove copper from LME warehouses increased to the highest level in almost four months on July 1.

“Prices are creeping higher after the strong losses last week,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by phone.

Copper for delivery in three months climbed $90, or 1.4 percent, to $6,500 a metric ton at 5:14 p.m. on the LME. The contract lost 5.3 percent last week. Futures for September delivery gained 0.7 percent to $2.9365 a pound on the Comex in New York.

Weinberg predicted “thin trading,” citing the U.S. Independence Day holiday. Comex floor trading is shut today. Investors bought and sold 4,660 three-month copper contracts in London, less than 15 percent of the total for July 2, last week’s slowest day of trading by volume.

LME prices last week dropped the most since the week ended June 4 as figures showed slower growth in manufacturing in China, the world’s top copper consumer. Auto sales in the country weakened in June and a services-industry index slid to a 15-month low, adding to signs that the economy leading the world recovery is cooling, reports showed today.

Car Sales

Passenger-car purchases rose 10.9 percent from a year earlier, down from May’s 25 percent gain, the China Automotive Technology & Research Center said. The services-industry measure fell to 55.6 from 56.4, HSBC Holdings Plc and Markit Economics said in an e-mailed statement.

“The government-orchestrated slowdown in China” contributed to Citigroup Inc.’s decision to cut its forecast for copper prices in this year’s second half, analyst Alan Heap in Sydney wrote in a report today. He also cited “prospects of a stalled recovery in the developed economies (Europe in particular).”

Copper will average $3.10 a pound ($6,834 a ton) in the half, 15 percent below its prior estimate, Citigroup said. The metal will average $3.29 next year, 9 percent less than predicted previously, according to the report.

Slowing Momentum

Concern about tighter monetary policy in China and the potential impact on demand of Europe’s fiscal crisis have helped to pull LME copper down 12 percent this year. Growth in Europe’s services and manufacturing industries slowed in June, Markit said, adding to signs a recovery is losing momentum.

The chance that Europe’s economy may return to recession “is rising fast and is at its highest since the recovery started more than a year ago,” Nick Moore, head of commodity strategy at Royal Bank of Scotland Group Plc, said in a report e-mailed today. “Absent an effective policy intervention to tackle the debt crisis in the periphery over the coming months, the European economy will double-dip in 2011.”

A composite index based on a survey of euro-area purchasing managers in both services and manufacturing fell to 56 from 56.4 in May, Markit said. An index of services retreated to 55.5 from 56.2. A gauge of euro-area manufacturing declined to 55.6 from 55.8 in the previous month, Markit said on July 1.

LME copper stockpiles fell to 444,500 tons, the lowest level since Dec. 2. Canceled warrants, as the bookings are known, slid 4.8 percent to 33,325 tons, the second drop in a row.

Nickel for three-month delivery on the LME slipped 0.3 percent to $18,744 a ton, erasing a gain of as much as 2.3 percent. Vale SA reached a “tentative” agreement for a new contract with workers in Canada who have been on strike for a year, the longest labor dispute in Vale’s 67-year history.

Aluminum was little changed at $1,937 a ton and lead rose 0.4 percent to $1,760 a ton. Zinc climbed 1.6 percent to $1,808 a ton and tin rose 0.4 percent to $17,300 a ton.

MEPS said decreases were noted in three out of the countries researched. Lower raw material costs, coupled with reduced demand from both domestic and export customers, pushed prices down in June. Currency exchange rate movements also contributed to the reduction in the Asian average in US dollars.

“Our forecasts have been revised downwards in June due to recent falls in nickel, chromium and molybdenum costs,” MEPS said.

“Demand is likely to weaken further in the short term as customers wait for lower prices in the coming months. This is expected to spur a cut in mill transaction values in the short term as they try to secure order volumes. Production outages are also anticipated at steelmakers across the region. This should help to limit the decreases in selling figures during the second half of 2010.”

MEPS said an increase in buying activity is envisaged for early 2011. “Improved economic conditions across the region should help to boost end-user demand,” the consultancy report said. “Trade volumes to the west are likely to expand. Consequently, stainless steel prices are forecast to rise in the first and second quarters of 2011.”

The gains were led by metal stocks. The metal index rose 0.67 per cent. Defensive sectors like FMCG and Healthcare saw buying interest. Consumer durables stocks saw some profit booking. The broader markets continued to outperform the benchmark indices. The BSE small and mid cap indices rose close to 0.4 per cent.

The market breadth was strong with 71 per cent stocks rising on the BSE. Among the gainers are Hindalco, Tata Steel, Cipla and BHEL. Reliance Comm extended the losses. The stock was down 1.19 per cent. Maruti Suzuki and HDFC declined.

News driven counters included government run MTNL that rose 3.03 per cent. Telecom minister A Raja has sought a reimbursement of spectrum fee for MTNL. Eicher Motors rose 3.54 per cent. The company reported close to 50 per cent increase in June sales. Adani Enterprises was down 0.23 per cent. It has hired banks for its QIP issue.

Sugar stocks rose. White sugar prices are at a 2 week high. Agriculture Minister Sharad Pawar has suggested a de-control of the sector.

Asian markets were mostly up after touching the day’s low earlier in the day. The Nikkei 225 in Japan, down close to 2 per cent at one point, had gained 0.31 per cent to 9,295 at 9.23 am. The Kospi in South Korea fell 0.78 per cent. The Shanghai Composite gained 1.75 per cent. The Chinese markets had closed at a 15 month low on Monday.

Copper 6495 (+20)

Lead 1770 (+10)

Zinc 1830 (+30)

Nickel 18745 (+45)

Aluminum 1935(+0)

The Brazilian mining giant said it struck a deal with the United Steelworkers Local 6500 and 6200 representing production and maintenance employees at the company’s operations in Sudbury and Port Colborne, Ontario.

Vale and the union will sign comprehensive memorandums of agreement on Monday, Vale said in a statement..

About 3,000 workers went on strike last July in Sudbury in a dispute over pensions, bonus issues and contract language.

A separate strike at Vale’s Voisey’s bay nickel mine in eastern Canada began last August.

The Sudbury and Voisey’s Bay operations together produce about 10 percent of the world’s nickel, as well as sizable amounts of copper, cobalt and precious metals.

Mediators called off talks aimed at ending the Sudbury strike last week because of a deadlock over eight or nine workers who were fired. The union wanted the company to allow the dismissed employees to get their jobs back.

Vale’s statement made no reference to the issue of the dismissed workers, and a spokesman could not be reached immediately for further comment.

Copper for September delivery HGU0 on the COMEX metals division of the
New York Mercantile Exchange ended up 3.90 cents, or nearly 1.4 percent, at
$2.9160 per lb, after dealing between $2.8945 and $2.9580.

On the London Metal Exchange, benchmark copper CMCU3 was untraded at the
close but last bid at $6,410 a tonne from $6,335 at the close on Thursday.

Copper found support from the dollar, which slipped against the euro after
data showed a larger-than-expected drop in U.S. June nonfarm payrolls to
125,000, while the unemployment rate unexpectedly fell to 9.5 percent.
[ID:nN01165161] [USD/]

Donald Selkin, chief market strategist with National Securities Corp. in
New York, said the increase in private hiring gave a slightly positive tone to
the report, despite all of the negativity surrounding the headline number.

“I thought it was decent, relative to expectations … the fact that the
13,000 was out there and we came in at 83,000 in the private, to me was OK”, he
said, referring to the ADP Employer Services report on Thursday. [ID:nWEN6511]
[ID:nN02205916]

Still, recovery sentiment remained fragile, as highlighted by
below-consensus manufacturing surveys this week in the United States and China,
the world’s top two consumers of copper. [ID:nTOE66001K] [nN01108492]

Furthermore, euro zone manufacturing slowed in June to its weakest growth
rate in four months, but was unrevised from a survey estimate just over a week
ago. [ID:nSLAUHE67Q]

“Everyone knew things were slowing down a bit,” said Alex Heath, head of
base metals at RBC Capital Markets. “With cutbacks and austerity measures
imposed, nobody should be terribly surprised to see GDP shrinking or PMI
slowing down. On the other hand the numbers are still good in China.”

For graphic; here

TAX PRESSURE

Also weighing on metals was news Australia ended a damaging dispute with
global miners by dumping its “super profits” tax for a lower resources rent tax
backed by key global miners. [ID:nAUTAX]

As a result Swiss-based Xstrata (XTA.L) reinstated about A$600 million of
copper mining and exploration projects in Australia. [ID:nSYU010165]

Meanwhile, stocks in LME warehouses continued to fall. <0#LME-STOCKS>

Copper stocks dropped 2,125 tonnes to 447,300 tonnes, the lowest since
early December last year, and aluminum stocks shed 5,150 tonnes to 4.2 million
tonnes, about 220,000 tonnes below the record high of 4.64 million tonnes set
in January.

Three-month aluminum CMAL3 closed up $16 at $1,942 a tonne. Zinc MZN3
was untraded at the close, but last bid at $1,775 a tonne from $1,743 on
Thursday. Earlier, the metal used to galvanize steel, jumped more than 4
percent to $1,820.

Galvanized steel producers are estimated to account for more than 50
percent of global zinc demand, forecast at around 12 million tonnes this year.

Lead CMPB3 rose $18 to end at $1,753 a tonne, tin CMSN3 gained $280 at
$17,240, while nickel CMNI3 shed $200 to $18,800.

Metal Prices at 1805 GMT
Metal Last Change Pct Move End 2009 Ytd Pct

move
COMEX Cu 291.80 4.10 +1.43 334.65 -12.80
LME Alum 1935.00 9.00 +0.47 2230.00 -13.23
LME Cu 6445.00 110.00 +1.74 7375.00 -12.61
LME Lead 1755.00 20.00 +1.15 2432.00 -27.84
LME Nickel 18825.00 -175.00 -0.92 18525.00 1.62
LME Tin 17300.00 340.00 +2.00 16950.00 2.06
LME Zinc 1790.00 47.00 +2.70 2560.00 -30.08
SHFE Alu 14775.00 170.00 +1.16 17160.00 -13.90
SHFE Cu* 52350.00 1010.00 +1.97 59900.00 -12.60
SHFE Zin 15015.00 555.00 +3.84 21195.00 -29.16
** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and
ZN
SHFE ZN began trading on 26/3/07

Copper output at 321 132 t from January to May was higher than the 276 230 t the southern African country produced during the same period last year.

The central bank said in a fortnight report that copper exports increased marginally to 345 329 t in the first five months of 2010 versus 244 873 t in 2009.

Cobalt production increased to 3 210 t in 2010 from 1 613 last year and exports shot up to 3 198 t to May this year from 1 587 t in 2009, the Bank of Zambia said.

Chibamba Kanyama, an economist at the country’s main think-tank, the Economics Association of Zambia, told Reuters copper output had risen following the opening of new mines like Equinox Minerals’ Lumwana mine and the increase in copper prices

“It was not cost efficient to carry out mining activities in certain parts of the mines when the price of copper was low but with the rise in prices it is now profitable to carry out mining in areas that were considered expensive,” Kanyama said.

Kanyama said Zambia was likely to achieve its target to raise copper production to about one-million tons by 2011, from just below 700 000 t in 2009.

“Copper prices are cyclical and the mining companies are rallying behind the high price to maximize output before the cycle goes down,” Kanyama said.

Kanyama said cobalt output had almost doubled following the re-opening of Zambia’s largest cobalt producer, Chambishi Metals.

Copper mining is Zambia’s economic lifeblood and the mines are a major employer in the country of over 12-million people.

Foreign mining companies in Zambia include London-listed Vedanta Resources, Canada’s First Quantum Minerals, Glencore International of Switzerland and Metorex of South Africa.

“We cannot afford that as a company,” Eskom Chief Executive Officer Brian Dames said.

A second union said on Wednesday its members rejected a new pay offer and would join a work stoppage that could also harm manufacturing and mining companies in the world’s top platinum and fourth-largest gold producer and force them to curtail operations.

Metminco has a 69.4% interest in Hampton. The project is at an early stage (~ 21,000m drilling) exploring a world class Cu-Mo porphyry system (~ 10km long) within a major Cu porphyry belt.

Planning is underway for a new 50,000m drill program. The drilled mineralization (~ 900m x 500m) is open in several directions and at depth.

In the phase two drilling campaign at Los Calatos Hampton drilled 10 core holes totaling 9,516m from November 2009 to March 2010, supplementing 13 cored holes previously drilled by Hampton (phase 1, totaling 6,387m), and 39 cored and reverse circulation holes drilled previously by Phelps Dodge and Barrick.

Total metres drilled on the Los Calatos Project to June 2010 are 21,261m, of which 20,393m was considered in the revised June 2010 resource estimate.

In June 2010 total resources for the Los Calatos Project of 926 million tonnes, using a cut off grade of 0.2% Cu., are subdivided into:

- Indicated Resources of 111,264 million tonnes at 0.39% Cu and 0.038% Mo; and
- Inferred Resources of 814,970 million tonnes at 0.37% Cu and 0.026% Mo.

Hampton is preparing a more detailed technical report on the Los Calatos Project, to be released in this quarter.

Hampton is also currently planning to commence a 50,000 metre phase 3 drilling program at Los Calatos, seeking to extend current resources, and to drill test other nearby exploration targets.

Metminco recently appointment Tim Read and Francisco Vergara Irarrazaval. Read is based in the United Kingdom and was formerly an investment banker and corporate executive and has over forty years experience in the mining and metals sector.

Vergara is senior partner of a law firm in Santiago, Chile and has extensive experience in the resources sector in Chile and in other Latin American countries.

Bell Equipment , which posted a net loss of R372m for the financial year to March , said the increase in the copper price, and the resultant surge in mining, meant a major increase in the use of its materials- handling equipment. The company is operating in the Democratic Republic of Congo.

CEO Gary Bell said that the copper mining sector provided “growth and long-term stability” for the company. The downturn saw Bell’s revenue fall by more than half in the year to December, from R5,46bn in 2008 to R2,7bn last year. It posted a net loss of R372m, from a profit of R514m.

“As the copper price is the lead indicator of economic recovery, it is safe to say that those companies experiencing the benefits of the high price are also recovering,” said Econometrix Treasury Management MD George Glynos yesterday.

Copper production increased due to demand from China, which consumes 45% of the world’s copper.

South African companies working in the Copper Belt in the Congo and Zambia benefited from this consumption as these African countries were important copper suppliers . This was owing to the low reserves of copper in large producing countries such as Chile, Peru and the US.

While SA’s heavy equipment suppliers to mines would feel the positive effects of a high copper price, other South African companies, especially those focusing on electronics and electrical equipment, suffered. These included electrical engineering company Reunert . “When the copper price increased, the rand increased, which puts manufacturing firms at risk,” said CEO Gerrit Pretorius.

The global copper price hit a high of 7900 a ton in April, and although the price had softened this quarter, it was expected to remain high for the next few years, said a mining analyst.

However, the analyst warned that copper was a volatile commodity, with prices anticipated to come down again in 2013. The analyst speculated that the demand from Western Europe and the US would start to slow in the next few years owing to a decline in infrastructure development.

Meanwhile, apart from the buoyant copper price, the industrial metals sector is expected to stay on a recovery path this year. Demand for such metals was expected to be stimulated by lean producer inventories , government stimulus programmes and Chinese consumption, analysts said. Global economic growth is starting to pick up as a result.

BMO Capital Markets global commodity strategist Bart Melek said that global industrial production was recovering from a 12,5% decline last year to a 3,2% rise this year .

African Copper PLC (ACU.LN), a copper deposits explorer focused on Botswana, said Wednesday that for the 15 months ended March 31, it made a pretax profit of GBP30.7 million on revenue of $7.4 million.

MAIN FACTS:

-Revenue $7.4 million (12 months ended Dec. 31, 2008: $n/a)

-Operating profit $34.4 million (2008: loss $186.8 million)

-Pretax profit $30.7 million (2008: loss $186.7 million)

-Earnings per share $0.05 (2008: loss $1.28)

-Directors do not recommend the payment of a dividend for the year (2008: nil).

-Shares closed Tuesday at 4.5 pence.

-By Iain Packham, Dow Jones Newswires; 44-20-7842-9269; iain.packham@dowjones.com

(END) Dow Jones Newswires

Fluor said on Tuesday it would handle the engineering and construction on the new Caserones copper mine for Minera Lumina Copper Chile, which is backed by Pan Pacific Copper Co Ltd and Mitsui & Co Ltd.

“South America, and Chile in particular, continues to be a robust market for our company in the mining sector,” Dwayne Wilson, Fluor’s group president for industrial business, said in a statement.

The $1,3-billion will be added to Fluor’s backlog for the second quarter, which it said last month could top $30-billion after falling to $25,7-billion at the end of the first quarter, as new awards could exceed its single-quarter record of $8,8-billion.

Fluor has said that the profitability of this bigger backlog would be relatively weaker because mining work tends to yield a lower margin than oil and gas projects.

Work on the Caserones projects will be done at 4 000 m above sea level, and the project has a marketable output of 3,6-million tons of fine copper and 87 kilotons of molybdenum, Fluor said.

When Minera Lumina signed off on the plans in February, with copper prices having more than doubled from a year before, the project was due to be completed by 2013, according to a statement on Mitsui’s website.

Pan Pacific is 66 percent owned by Nippon Mining & Metals, part of Nippon Mining Holdings Inc, while the remainder is held by Mitsui Mining and Smelting Co Ltd.

Shares of Irving, Texas-based Fluor were down 3% on Tuesday, in line with the sector as crude oil prices tumbled.

A MCC majority-owned lead and zinc mine in Pakistan produced about 13,000 tonnes of zinc concentrates in the first half of the year and the material was sold to China, Zeng said, adding the firm had not sold lead concentrates due to small amounts.
The mine started production at the end of last year and has a designed capacity of about 70,000 tonnes of zinc in concentrate a year, he said.
MCC also operates a copper mine in Pakistan with annual production of 18,000 tonnes of copper, 2 tonnes of gold and 3 tonnes of silver, Zeng said.
A 10-year lease for the operation of the mine will expire in 2012 and MCC is in talks with the local government for an extension, he said.
Zeng said the lead and zinc unit was seeking to invest and develop overseas metals mining projects for MCC.
"We focus on the development of projects, not exploration as that takes 10 to 20 years and we don't have the time," he said, adding Beijing encouraged the firm to invest in overseas projects.

Copper 6521(+41)

Lead 1729 (+19)

Zinc 1775 (+15)

Nickel 19255 (+95)

Aluminum 1943(-7)

Consumer spending in the U.S. rose in May more than forecast, a sign households are gaining confidence in the recovery and the job market. Purchases rose 0.2 percent after little change the prior month, Commerce Department figures showed today. Incomes climbed 0.4 and the savings rate increased to the highest level in eight months. Copper has dropped 7.5 percent this year.

“The numbers suggests that the U.S. economic recovery remains on track, though the pace of the recovery is probably a bit slow for most people’s liking,” David Thurtell, a Citigroup Inc. analyst in London, said by telephone.

Copper for delivery in three months jumped $36, or 0.5 percent, to $6,806 a metric ton at 1:49 p.m. on the London Metal Exchange. Prices rose to a four-week high of $6,875 on June 25 and reached $6,873 earlier today.

LME copper rose as much as 2.7 percent on June 25, supported by U.S. consumer confidence rising in June to the highest level since January 2008. Prices gained 5.2 percent last week, the most since the week ending Feb. 19, partly on speculation imports by China might increase after the People’s Bank of China indicated on June 19 it would abandon the yuan’s two-year peg to the dollar.

The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, slid 0.5 percent last week, making dollar- priced metals cheaper in terms of other monies. The index gained as much as 0.3 percent today.

Sovereign-Debt Crisis

Copper has dropped this year as the dollar gained and investors speculated that monetary tightening in China and the European sovereign-debt crisis may curb demand.

Group of 20 leaders responded to the European debt crisis with deficit-reduction targets and agreed to pursue higher capital requirements for banks once economic recoveries take hold.

Stockpiles of copper tracked by the LME fell for a seventh day to 453,175 tons, the lowest level since Dec. 7. Bookings to remove metal from warehouses jumped for a third day to 31,900 tons, the highest since March 3. Copper stockpiles monitored by the Shanghai Futures Exchange declined 8.8 percent last week to 123,939 tons, the bourse said on June 25.

Aluminum for three-month delivery on the LME rose 1 percent to $2,016 a ton. Stockpiles in LME-monitored warehouses dropped for a third consecutive day, down to 4.44 million tons and the lowest since July 13, 2009.

Aluminum producers in Henan province, the largest maker of the metal in China, agreed to curtail 700,000 tons of capacity, Wen Xianjun, the deputy head of China Nonferrous Metals Industry Association, said today by phone from Beijing.

Nickel gained 2.4 percent to $20,226 a ton. Zinc fell 0.3 percent to $1,866.75 a ton, lead advanced 1.4 percent to $1,840 a ton and tin was unchanged at $18,125 a ton.

Copper 6637(-33)

Lead 1786 (-14)

Zinc 1799 (-8)

Nickel 19920 (-5)

Aluminum 1981(-10)

Copper consumption came in at just over 700,000 tonnes last month, versus 650,000 in April.

China’s arrivals of refined copper fell 9.7 percent in May from last month in their second straight monthly drop, while on a daily basis, accounting for the longer May month, imports fell almost 13 percent.
China May refined copper imports fall, demand up

Apparent daily appetite for refined copper in China, the world’s top consumer, grew 5 percent in May from April, Reuters calculations show, as a fall in imports was offset by rising output and a drop in stock levels.

Copper consumption came in at just over 700,000 tonnes last month, versus 650,000 in April.

China’s arrivals of refined copper fell 9.7 percent in May from last month in their second straight monthly drop, while on a daily basis, accounting for the longer May month, imports fell almost 13 percent.

In May, China, the world’s top copper consumer, imported 279,690 tonnes of refined copper, the most popular type of copper in Chinese and international markets, data from the General Administration of Customs showed on Monday.

The May inflow was down from 309,772 tonnes in April which was a fall of 8.1 percent from March, and below expectations of 290,000 to 300,000 tonnes.

Import demand for spot refined copper increased last month as a favourable arbitrage opened between London and Shanghai prices, traders said.

About 100,000 tonnes of bonded copper already in Shanghai filled much of that extra demand, driving up premiums for bonded copper in Shanghai to $110-$120 per tonne over cash LME copper prices in early June from $80-$100 a month earlier.

Last month Chinese buyers also placed spot orders for more than 10,000 tonnes of Chilean refined copper, which would start arriving in late June, with the bulk to land in Chinese ports in July.

Beijing’s measures to cool the property sector, the major user of base metals, had made buyers cautious, Lan Ke, analyst at the assets management division at Southwest Securities, said.

“People had expected prices to fall,” he added. But he noticed that the expectation was changing after China’s central banks said over the weekend that the world’s top consumer of most base metals would gradually make the yuan’s exchange range more flexible.

The statement strongly suggested that China was ready to break the currency’s 23-month-old dollar peg, which quickly pushed up yuan against the U.S. dollar to 21-month high on Monday and drove up metal prices.

Imports of primary aluminium from China, the world’s biggest consumer and producer of the metal, dropped 3.2 percent on the month to 28,045 tonnes in May due to the delay and cancellation of contracted shipments last month on the fall in LME aluminium prices.

Exports of primary aluminium dived 48 percent on the month to 25,265 tonnes in May on reduced supply of bonded stocks, the main source for a 16-month outflow high in April that made China a net exporter of the metal for the first time since 2008.

But imports of refined lead jumped to 3,144 tonnes in May, up from 260 tonnes in April, due to weak LME prices.

Copperbelt Province Permanent Secretary Villie Lombanya told Reuters all the mines had returned to normal production after they replaced equipment damaged due to unstable electricity supply, soon after the power was restored.

Konkola, owned Vedanta Resources, said on Saturday it expected to resume full operations the same day after restarting a processing plant and its key Nchanga smelter.

First Quantum Minerals’ Kansanshi mine, Zambia’s largest single mine by output, resumed full production after losing nine hours of production during the power blackout, its spokesperson Godfrey Msika told Reuters.

Production also resumed at the Lumwana Mine owned by Australia’s Equinox Minerals and the Bwana Mkubwa plant, another First Quantum unit, officials at these mines told Reuters.

Other foreign mining companies operating in Zambia include Glencore International AG of Switzerland and Metorex of South Africa

Copper 6560 (-9)

Lead 1802 (-13)

Zinc  1775 (-5)

Nickel 19325 (-50)

Aluminum 1938 (-7)

Porphyry copper mineralization at La Verde has been explored since the 1970s, resulting in the discovery of two mineralized copper zones; East Hill and West Hill. Previous geological and geophysical programs at La Verde have demonstrated a strong association between geophysical responses (Induced Polarization, “IP”) and porphyry copper mineralization hosted in the multistage La Verde intrusive system.

The 2010 exploration budget of US$4.0 million includes costs associated with a minimum 10,000 meters of diamond drilling. Initial drill targets include confirmation holes across the known mineralization as part of the technical support required to bring the property into NI 43-101 compliance, as well as the commencement of drilling previously untested IP targets.

Catalyst Copper Corp. is a Vancouver-based publicly traded mine development company that optioned the La Verde copper porphyry project in Michoacan, Mexico from Minera Torre de Oro, S.A. de C.V., a subsidiary of Teck Resources Limited (see December 8, 2009 news release for complete option details).

                   ON BEHALF OF THE BOARD OF DIRECTORS OF
                            CATALYST COPPER CORP.

                     TERENCE W. HODSON, V.P. EXPLORATION

Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of the Company, including, but not limited to, risks associated with mineral exploration and mining activities, the impact of general economic conditions, industry conditions, dependence upon regulatory approvals, and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Copper 6580 (-110)

Lead 1810 (+15)

Zinc  1790 (-15)

Nickel 19800 (-360)

Aluminum 1982 (-28)

Stop Loss Below 300.50 TGT 305.50/307

Current Market Price 303.50

 FUNDAMENTALS

 * Three-month copper on the London Metal Exchange CMCU3
rose $4 to $6,450 by 0132 GMT on Friday, hovering above a
one-week low of $6,410 in the previous session.

 * Shanghai's benchmark third-month copper futures contract
SCFc3 slipped 0.6 percent to 51,340 yuan a tonne.

 * New U.S. claims for jobless aid rose last week while
consumer prices notched their largest decline in nearly 1-½
years in May, suggesting interest rates will remain ultra low
to nurse the fragile economic recovery. [ID:nN17254724]

 * Meanwhile factory activity growth plummeted in the U.S.
Mid-Atlantic region in June, a survey by the Philadelphia
Federal Reserve Bank showed, adding to worries about the
vulnerable recovery in the U.S. economy. [ID:nN17165505]

 * LME copper stocks rose 1,025 tonnes to 460,175 tonnes on
Thursday, the first rise since mid-May. [MCU-STOCKS]

 MARKET NEWS

 * The euro held steady near three-week highs on Friday, as
investors liquidated short positions after a robust response to
Spanish bond auctions, while the U.S. dollar appeared
vulnerable to a sell-off.[USD/]

 * U.S. stocks edged higher late in a choppy, thinly traded
session on Thursday as investors built on momentum gained after
the S&P 500 index broke through its 200-day moving average
earlier this week. [.N]

 DATA/EVENTS

 The following data/events is expected on Friday:

 * India M3 Money Supply June  (1130 GMT)

 * U.S. ECRI weekly index     (1430 GMT)

 PRICES
 Base metals prices at 0132 GMT
 Metal         Last       Change   Pct Move  End 2009 YTD pct
chg
 LME Cu        6450.00      4.00     +0.06    7375.00
-12.54
 SHFE Cu*     51340.00   -330.00     -0.64   59900.00
-14.29
 LME Alum      1958.00     -8.00     -0.41    2230.00
-12.20
 SHFE Alum*   14520.00    -60.00     -0.41   17160.00
-15.38
 COMEX Cu**     290.25     -9.15     -3.06     332.75
-12.77
 LME Zinc      1742.00    -23.00     -1.30    2560.00
-31.95
 SHFE Zinc    14125.00   -170.00     -1.19   21195.00
-33.36
 LME Nickel   19500.00   -300.00     -1.52   18525.00
5.26
 LME Lead      1742.00    -22.00     -1.25    2432.00
-28.37
 LME/Shanghai arb^           189
 Dollar/yuan          6.8282 \ 6.8289
 ** 1st contract month for COMEX copper
  * 3rd contact month for SHFE aluminium, copper and zinc
  ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month

“We’re not talking about different tax rates,” Ferguson told Australian Broadcasting Corp. radio today. There will be “generous transitional arrangements” for existing projects and “there will be a headline rate of 40 percent.”

Prime Minister Kevin Rudd has seen public support drop since announcing his proposed tax on the “super profits” of resource projects, a levy mining companies say will stall investment in an industry that in April accounted for 57 percent of the value of goods exported.

Australia, the world’s biggest shipper of coal and iron ore, announced the new tax on May 2 as part of an overhaul that includes a phased cut in company tax rates to 28 percent from 30 percent by mid-2014. Rudd’s government is holding talks with resources companies on the plan.

BHP Billiton Ltd., Rio Tinto Group and Xstrata Plc met with Ferguson today in Canberra.

“At present there is no formal acknowledgement from the government” that the mining industry’s tax concerns will be addressed, the three companies said in a joint statement after the talks. Ferguson wouldn’t comment on the meeting.

Consultation Process

The government says 80 companies agreed to join the consultation process that is led by a Treasury panel. A first report outlining the issues under discussion will be released next month and a final document late this year, according to the government. Legislation will be put to parliament in late 2011 if the Rudd government is re-elected at a national ballot due by April.

“Nothing has changed,” Treasurer Wayne Swan said in Canberra today. “We said that our bottom line was a 40 percent rate. We said there would be generous transitional provisions and we said we’d discuss the detail with the industry, and that’s precisely what we’re doing.”

State Resources Minister Paul Holloway in South Australia, home to BHP’s Olympic Dam where a A$20 billion ($17.3 billion) expansion is under review, has called for special consideration for the project. The mine has the largest deposit of uranium in the world, the fourth-largest copper reserve and Australia’s largest reserve of gold.

“The federal government gave us a good hearing and we’re waiting for them to come back to us,” Holloway said in an e- mail last week.

New Investments

Sydney-based miner and steelmaker OneSteel Ltd., Australia’s second-largest producer of the alloy, said on May 26 it wants the proposed levy to only apply to new investments.

“We’ll make sure, as the premier of South Australia has raised with me and as I have discussed for example with OneSteel, that we will take on board the special nature of their operations,” Ferguson said today.

Documents released when the proposed levy was announced said the consultation process will focus on the point at which profits are taxed. Companies are seeking answers how the levy will be applied to processed minerals and raw commodities.

“The issue of the taxing point is central to our considerations,” Ferguson said today without providing details.

The resource total for the project has now reached 297,2-million tons, up 7% from the previous resource estimate.

FerrAus CEO Mike Amundsen said on Wednesday that the resource upgrade was another critical step to underpin the prefeasibility study and the pathway to allow the Pilbara project to make its first ore shipment during the fourth quarter of 2013.

“The infill drilling programme has been very successful in enhancing the overall confidence of our resource base necessary to support the prefeasibility study, with 75% of the total high-grade ore resource base now classified as measured and indicated.”

Amundsen noted that the prefeasibility study for the Pilbara project was due for completion within the next few moths, and each resource upgrade for the project provided the company with greater certainty that it would be able to achieve the 15-million ton a year production target.

“We are aiming to prove up a total resource of 400-million tons by the end of this calendar year with continuing exploration drilling of the many targets yet to be tested,” he added.

Once the prefeasibility study has been completed, FerrAus would move to immediately start its definitive feasibility study, which was scheduled to be completed in early 2011.

In an analysis published Wednesday, Ecclestone said Hallgarten’s 12-month outlook is for zinc to again reach $1.10 or slightly higher.

“Zinc is in a very delicate place,” Ecclestone asserted. “Having just recovered last year from the mauling that sent it below 50 cts in the market meltdown of 2008, the zinc complex needed a sustained recovery in prices to tease projects off the drawing boards and into the financing phase. While some transactions went through the recovery phase most of these were on existing producing assets.”

Ecclestone suggested “zinc end users need to feel that there is some new production coming on three or more years out. Short of silver mines with strong zinc/lead by-product credits there is nothing between here and the horizon in terms of new production.”

“This then implies that a shortage bubble is coming along and prices will spike again as they did in 2006/2007,” he observed.

“We have no doubt that zinc and lead should both hit $1 per lb before the end of 2010, probably on opportunistic Chinese stockpiling and a desire by the Chinese to ensure that foreign miners stay in operation to provide them with fairly reliable supplies,” Ecclestone advised.

For the fastest return on zinc investment, Ecclestone recommends the Zinc ETF “would look to be the way to play the bounce from recent lows.”

In spite of the recent zinc price slump, Ecclestone predicted zinc production will be up this year “because of momentum from a strong finish to 2009 and the rising Zn/Pb output from the strong silver price and new productions in the Ag/Zn/Pb polymetallic category.”

However, he cautioned “under this frothy layer primary base metal sources of Zn/Pb will be heading down as mines expire and no new production appears. This is where the real crisis is brewing.”

In his analysis, Ecclestone suggested, “Merely the ongoing growth in China will continue to increase its share of global zinc consumption and its zinc output is clearly inadequate for its own needs.” Like so many other key metals, the zinc price is subject to what Ecclestone called “market-making” by the Chinese.

“It seems the Chinese are more interested in orderly markets where Western producers get a fair though not outrageous return on their production than Western end-users that beggared a whole swathe of the base metals industry (leading  to the annihilation of virtually all the US and Canadian majors) between 1983 and 2003,” he explained.

“‘Better the tender mercies of the Chinese than the gouging of Western industrials’ should be the mantra of the surviving and up-and-coming base metals miners as they head into a new decade,” Ecclestone suggested.

After several years of protests, litigation and delays attributed to the global economic downturn, the U.S. is about to get its first new primary nickel mine in years in the historic mining region of the Upper Peninsula of Michigan.

Rio Tinto announced Tuesday it will invest $469 million in the development of the Kennecott Eagle Mine.

Located northwest of Marquette, Michigan, Eagle will be the only primary nickel mine operating in the United States. It will be the first new mining operation to be built in Michigan in years.

Rich copper and iron ore deposits were first discovered in the Upper Peninsula (U.P.) of Michigan in the 1840s.  Mines in the area yielded more mineral wealth than the California Gold Rush.  American Indian casinos now draw a tourism crowd to the U.P.

Rio Tinto’s funds will enable construction of a new underground mine and its associated surface facilities, rehabilitation of the existing Humboldt Mill, and development of a multi-use access road.

Site work on the property began last month.  The company had recently relocated a small group of Native and non-native American protestors who had been camping on the site since mid-April.

“We respect their right to protest and call attention to an issue they feel is important,” Kennecott’s Matt Johnson. “Their presence has made it possible for us to have conversations with them that enable us to gain a better understand of their priorities and concerns.”

“At the end of the day we all want the same thing: confidence that the mine will be built and managed in a way that is compatible with the U.P.’s environment and way of life.”

The Eagle mine is the first mining project to be permitted under Michigan’s 2004 nonferrous metallic mine law. Construction of the mine and mill will begin this year and first production is expected in late 2013. The main focus of work this year will be construction of an advanced water treatment plant and related environmental control system.

Kennecott hopes Eagle will produce separate nickel and copper concentrates containing an average of 17,300 tonnes of nickel and 13,200 tonnes of copper annually over six years.  Ore will be transported to the old Humboldt Mill now undergoing rehabilitation. The mill was part of Cleveland Cliffs’ Humboldt iron ore mine operation near Champion, Michigan.

Rio Tinto is exploring for additional resources in the immediate area.

The choices in this tourist mecca have traditionally been a cyclorama of junk-food horrors, from endless options for chicken fingers (with an optional ghost tour) to all-you-can-eat Salisbury steak and nachos at a buffet named for Gen. Pickett’s Charge.

A quiet but serious culinary revolution, though, has been growing in the Adams County countryside surrounding this historic town. Ambitious wineries such as Hauser Estates have recently popped up, cultivating grapes amid the rolling hills of Biglerville’s apple orchards. The Gettysburg Festival, which runs June 18-27, has placed food events at the core of its celebration.

Even more impressive are the everyday efforts of some of the area’s best restaurants, including three that feature locally bred chefs who’ve returned from pedigreed gastromomic adventures farther afield to bring some sophisticated flavors back to their home turf.

House-made charcuterie and wood-roasted Spanish tapas at a tiny apple-country BYOB? A lavish industrialist mansion where the chef creates inventive seasonal fare inspired by local organic farmers and the owners’ own herd of cattle? Or how about an elegant meal at a colonial-era tavern in East Berlin from a chef who once ran the four-star kitchen at Manhattan’s Lespinasse?

I wouldn’t have believed it, either, until I tasted these meals myself. But after visiting this spring, I found that each of these three restaurants add a flavorful new reason to visit Gettysburg this year.

The Sheppard Mansion

Chef Andy Little knows his way around B&Bs, having trained at Virginia’s vaunted Inn at Little Washington (after school at the C.I.A.) and made his reputation with Philadelphians as a seasonally minded chef at EverMay on the Delaware north of New Hope. Coming back to his meat-and-potatoes hometown of Hanover, he says, was an unexpected turn. But the rebirth of the Sheppard Mansion as an inn and a serious restaurant has been an ideal opportunity to craft a special fine-dining destination from the ground up.

Owned by the family behind the Hanover Shoe Co., the mansion is a gracious inn and perfect all-in-one stop for a night on the way to Gettysburg, which is just 25 minutes west. The guest rooms and dining rooms are gorgeously restored to their pre-World War I elegance, with dark wood paneling, silken walls, Tiffany lamps, and polished silver in the dining room stating a period theme.

Little’s cooking, though, is a thoroughly contemporary expression of seasonal New American cuisine with the occasional Southern accent, drawing inspiration from local farms when ingredients can’t be found in the mansion’s extensive box gardens or the Sheppard family’s own produce and cattle farm.

On the current menu, edible nasturtiums grace deep-fried softshell crabs marinated in a savory Old Bay-scented creme brulee custard. In early spring, buttermilk-fried frogs’ legs came over garlic cream, while baby turnips accompanied seared rockfish over lentils stewed with ham hock. Mustard and crumb-crusted halibut “schnitzel” served over silky pureed cauliflower was an homage to the area’s German roots, as was a tender duck breast with mustard-spiced spaetzle.

As for dessert’s highlight – a deep-fried apple pie turnover topped with homemade brown butter ice cream – Little concedes a play on the pop culture favorite: “McDonald’s, naturally! . . . And, of course, apple country, too.”

Of course.

Pomona’s

Biglerville sits at the picturesque heart of Pennsylvania apple country. What a surprise, then, to come across the exotic flavors of Spain and Italy emerging from a wood-fired oven in this tiny 28-seat BYOB tucked behind the Gettysburg Baking Co.

Chef Shaun Wolf, an East Berlin native and Restaurant School at Walnut Hill College grad, was on the opening kitchen crews at both Osteria and Zahav, where he learned to work the searing 800-degree heat of a wood oven. And Osteria’s lingering influence is obvious in the extensive selection of charcuterie that Wolf has been crafting, from the clove- and pepper-cured smoked beef bresaola to the richly textured porchetta head terrine and a country ham braised in apples and apple brandy.

Wolf makes fine variations on pizza, too, like the unusual pie we savored topped with gossamer rounds of “fresh dug” local potatoes over parmesan cream sauce with pancetta and mint. But he’s been paring back the pizzas lately toward more unusual Spanish “coca” flatbreads (like the one topped with tuna and white beans), to reserve oven space for the rest of his intriguing menu.

Among the best items roasting beside the blazing coals are bundles of scallions that emerge charry and wrapped in paper, ready for a dip in red pepper romesco. Big-barreled canneloni came stuffed with a slightly dry but flavorful mince of local applewood smoked rabbit. Tender brook trout was crisped in the oven on an iron plancha, streaked with purees of green parsley and garlicky white almond-bread sauce, then posed over a platter of duck-fat fingerling potatoes.

My favorite, though, was a cazuela brimming with plump shrimp basted in a garlicky butter electrified by lemony aleppo pepper, bay leaves, and a cuminy spice blend. I owe that winning choice to the urging of our neighboring table, a foodie couple from Carlisle, half an hour to the north.

“It’s date night,” they said, licking the shrimp butter from their fingers. “And we knew exactly where we were coming.”

Shanghai aluminium rose about half a percent at 14,630 yuan a tonne, and the third-month zinc contract was up 2.1 percent at 14,600 yuan at the opening.

The Medical Flexibles operations are part of the $2.22 billion acquisition of the Alcan packaging unit from Rio Tinto, which Amcor completed in February.

The deal saw Amcor secure Rio’s Alcan Packaging food unit in Europe, global pharmaceuticals, Asia food and global tobacco units, and means 85 per cent of Amcor’s revenue will now be earned offshore.

The Medical Flexibles business comprises four plants in North America, and approval is conditional on divesting one of the plants which is located in Marshall, North Carolina.

Amcor will initially acquire all four plants for $US66 million ($A77.8 million), with expected closure on July 1, 2010.

Comex gold futures Thursday closed slightly lower on more profit-taking pressure and consolidation. No significant chart damage has occurred during this latest pullback in prices. August Comex gold closed down $7.70 an ounce at $1,222.20.

U.S. stock indexes and crude oil prices were higher Thursday, while the U.S. dollar index is lower. That suggested an increase in investor risk appetite Thursday, which limited the safe-haven flows of money into the gold market.

Reports that Chinese officials said gold is not a viable option to be part of China’s foreign exchange reserves did also put some mild selling pressure on gold Thursday.

However, recent pullbacks in gold prices have been viewed by traders as bargain-hunting-buying opportunities during the major bull market run in gold. Don’t be surprised to see renewed buying interest in gold on Friday, heading into the weekend.

Many analysts had been expecting an increase in scrap selling of gold as prices reached a new high. However, reports said this has not yet occurred in significant fashion.

The London P.M. gold fixing was $1,217.50 versus the previous P.M. fixing of $1,233.50.

From an important technical perspective, August gold futures have seen no significant technical damage occur recently. The gold bulls still have the solid overall near-term technical advantage. There are still no solid early technical clues to suggest a market top is close at hand. Prices are in a four-month-old uptrend on the daily bar chart. Bulls’ next upside technical objective is to produce a close above solid chart resistance at the all-time high of $1,254.50. Bears’ next downside price objective is closing prices below technical support at the last “reaction low” on the daily bar chart, at last week’s low of $1,198.10. First resistance is seen at Thursday’s high of $1,236.00 and then at Wednesday’s high of $1,242.60. Support is seen at Thursday’s low of $1,216.20 and then at this week’s low of $1,212.10. Wyckoff’s Market Rating: 7.5.

July silver futures closed up 16.2 cents at $18.351 an ounce Thursday. Prices closed nearer the session high and scored a bullish “outside day” up on the daily bar chart. The key “outside markets” were in a bullish posture for silver Thursday, as the U.S. dollar index was lower, while crude oil and the U.S. stock indexes were higher. The bulls have the overall near-term technical advantage. However, prices are still in a four-week-old downtrend on the daily bar chart. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of $17.195. Bulls’ next upside price objective is closing prices above solid technical resistance at last week’s high of $18.735 an ounce. First resistance is seen at Thursday’s high of $18.445 and then at this week’s high of $18.49. Next support is seen at $18.00 and then at Thursday’s low of $17.905. Wyckoff’s Market Rating: 6.5.

July N.Y. copper closed up 125 points at 286.25 cents Thursday. Prices closed nearer the session high on more short covering in a bear market. The key “outside markets” were in a bullish posture for copper Thursday, as the U.S. dollar index was lower, while crude oil and the U.S. stock indexes were higher. Copper prices are still in a two-month-old downtrend on the daily bar chart and the bears still have the overall near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at this week’s low of 272.00 cents. Bulls’ next upside objective is pushing and closing prices above solid technical resistance at 300.00 cents. First resistance is seen at Thursday’s high of 290.50 cents and then at 295.00 cents. First support is seen at 285.00 cents and then at Thursday’s low of 280.15 cents. Wyckoff’s Market Rating: 3.0.

In a letter to shareholders, BHP Chairman Jac Nasser said the government has failed to acknowledge problems with the proposed 40% tax on “super profits” and its impact on the mining industry.

Nasser said the tax rate should vary according to the mineral resource being mined and should be applied on the value of minerals alone, excluding infrastructure processing or other support activities.

“Substantive redesign of this proposed tax is necessary and, if this can’t address its fundamental failings, it should be abandoned,” he said.

OZ Minerals has a $A1bn acquisitions war chest, and it will target copper projects of between 50,000 and 150,000 tonnes per annum. CEO Terry Burgess says the uncertainty created by the proposed tax on mining profits will make it more difficult for the group to expand its Prominent Hill Mine in South Australia. He also concedes that OZ itself could become a takeover target due to the impact that the downturn in copper prices has had on asset values.

China’s copper imports at around 397 000 tons were slightly below forecasts, but analysts had expected a drop from April’s 436 345 tons as measures to cool growth rates and slow property speculation took hold.

Copper for three-months delivery on the London Metal Exchange was $6 425 a ton at 1415 GMT, versus $6 340 a ton on Wednesday and after hitting a session high of $6 455, its highest since Friday.

“Chinese imports are notoriously variable, it does not surprise me that they’ve pulled back a bit ahead of summer shut-downs,” he said, adding that Chinese demand would remain supportive in the longer term.

“They have cut back on speculative activity in property,” he added. “But I see China touching the breaks rather than throwing out the anchors.”

“It is still a healthy number and is reflective of the still strong underlying demand if you consider there’s destocking going on in China,” said analyst Gayle Berry at Barclays Capital.

Risk appetite across global markets looked strong, with the euro <EUR=> rising 1 percent versus the dollar. The euro was supported in part by the head of China’s national pension fund saying the currency would weather Europe’s debt crisis.

The European Central Bank kept interest rates at 1.0 percent as expected on Thursday after a torrid month in which it has abandoned resistance to buying government debt and flung its exit strategy into reverse.

A global shares rally also supported sentiment.

RATE DECISIONS

Chinese demand was the major reason copper prices more than doubled last year. The metal, used extensively in construction and wiring, has given up gains after hitting a 20-month high above $8,000 a ton in mid-April as China slowdown fears and worries euro zone economy weighed.

On the fundamentals front, which analysts say is largely being ignored by the market for the moment, inventories for copper at LME registered warehouses dropped by 1 775 tons and 7 575 tons for aluminium.

Battery material lead was at $1 696,25 a ton versus Wednesday’s $1 680 a ton while tin was at $16 700 a ton from $16 300. Aluminium was $1 964 a ton from $1 927 and nickel eased to $19 538 from $19 270.

LME zinc was at $1 770 from $1 757. Zinc, the weakest performer amongst LME metals has lost one third of its value this year, under pressure from high stocks and worries about longer term surpluses.

The deficit will be between 500,000 metric tons and 1 million tons this year, Targhetta said in an interview at the Copper 2010 conference in Hamburg yesterday.

“The concentrate market will remain tight over the next three years, or even longer,” said Targhetta, who is also president of Freeport unit Atlantic Copper. Concentrate is the raw material from which copper is produced.

Mining companies delayed or scrapped new projects after copper prices plunged a record 54 percent in London in 2008, crimping future supply. Global mine production fell 0.1 percent last year, Barclays Capital said in a report. The refined market is expected to show a deficit of 155,000 tons this year after a surplus of 567,000 tons in 2009, according to the May 21 report.

The shortfall in mined output will keep the fees that mining companies pay smelters to turn ore into metal “under pressure for a long time,” Targhetta said at the event, organized by the GDMB Society for Mining, Metallurgy, Resource and Environmental Technology with Hamburg-based Aurubis AG. The German company is the world’s largest publicly traded copper refiner.

Smelters have received increased supplies of scrap copper, and have benefited from higher prices for sulfuric acid, the largest by-product from the smelting process, Targhetta said.

‘Scrap is Helping’

“Scrap is helping smelters in China and also outside China,” Targhetta said. This year Atlantic Copper’s plant in Huelva, Spain, will produce 20,000 tons of copper from scrap, up from 7,000 tons last year, he said.

Atlantic Copper, based in Madrid, produces about 1 million tons of sulfuric acid per year. This year the company expects to produce 278,000 tons of copper anodes, usually refined into a finished form of metal known as cathode, Targhetta said. That’s 8,000 tons more than last year, he said. Production of cathodes will reach 262,000 tons this year, up from 257,000 tons, he said.

“Production will be lower next year” as the plant is scheduled to be closed for about 20 days for maintenance work, he added.

U.S. stock indexes and the U.S. dollar index were firmer Wednesday, as the stock indexes saw a short-covering bounce. Crude oil futures prices were also firmer on short covering Wednesday, which also added some downside price pressure to the gold market.

However, look for gold prices to continue to be underpinned by safe-haven buying amid the European Union’s debt crisis that has yet to fully play out. Traders will continue to keep a close eye out for any further downgrades to European Union countries’ sovereign credit ratings. Traders will also continue to monitor the geopolitical front, with the North Korea-South Korea tensions still high, and with the weekend Israeli raid on a ship carrying food to the Gaza region.

The London P.M. gold fixing was $1,215.00 versus the previous P.M. fixing of $1,227.75.

From an important technical perspective, August gold futures bulls still have the solid overall near-term technical advantage. There are still no early technical clues to suggest a market top is close at hand. Prices are in a four-month-old uptrend on the daily bar chart. Bulls’ next upside technical objective is to produce a close above solid technical resistance at the record high of $1,251.40. Bears’ next downside price objective is closing prices below technical support at the last “reaction low” on the daily bar chart, at $1,168.00. First resistance is seen at this week’s high of $1,230.60 and then at $1,240.00. Support is seen at Wednesday’s low of $1,215.00 and then at this week’s low of $1,211.60. Wyckoff’s Market Rating: 7.5.

July silver futures closed down 23.6 cents at $18.315 an ounce Wednesday. Prices closed near mid-range and saw profit-taking pressure from recent gains. The silver bulls still have the overall near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at the last “reaction low” of $17.41. Bulls’ next upside price objective is closing prices above solid technical resistance at the May high of $19.845 an ounce. First resistance is seen at Wednesday’s high of $18.51 and then at this week’s high of $18.735. Next support is seen at Wednesday’s low of $18.09 and then at $18.00. Wyckoff’s Market Rating: 7.0.

July N.Y. copper closed down 225 points at 304.05 cents Wednesday. Prices closed nearer the session high. Trading has turned choppy recently, but copper prices are still in a seven-week-old downtrend on the daily bar chart and the bears still have the overall near-term technical advantage. The next downside price objective for the bears is closing prices below solid technical support at the May low of 290.05 cents. Bulls’ next upside objective is pushing and closing prices above solid technical resistance at 326.75 cents. First resistance is seen at Wednesday’s high of 306.50 cents and then at 310.00 cents. First support is seen at 300.00 cents and then at Wednesday’s low of 297.05 cents. Wyckoff’s Market Rating: 3.0.

The People’s Bank of China pushed up yields on one-year bills for the first time in four months, boosting returns after rates for interbank loans climbed to the highest level since September 2008. The central bank has asked lenders to set aside more capital as reserves three times this year.
Metals also fell as the Dollar Index advanced for a third day, reducing the appeal of commodities priced in the currency. The euro weakened against most of its major counterparts, extending its longest monthly decline against the dollar in 10 years, on concern that Europe’s efforts to reduce budget deficits will derail the region’s recovery.
Property Problems

China’s property market problems are worse than in the U.S. or U.K. before the financial crisis, the Financial Times said, citing an interview with Li Daokui, a member of the Chinese central bank’s monetary policy committee. China has raised minimum mortgage rates, restricted pre-sales by developers and tightened controls on purchases of second and third properties in an effort to cool growth.
“Sentiment deteriorates amid mounting concerns over China’s property market,” Tan Wentao, an analyst at HNA Topwin Futures Co., said from Shanghai.
Copper for September delivery in Shanghai retreated as much as 1.7 percent to 54,090 yuan ($7,921) a ton and traded at 54,280 yuan a ton. Aluminum slid 0.2 percent to 15,255 yuan and zinc decreased 0.6 percent to 15,960 yuan.
“Shanghai copper may test lows of 52,000 yuan soon,” China Futures’ Lu said. “Aluminum is not considered a financial investment as much as copper, while zinc has fallen more than its peers this year, so the two are more resistant to declines.”

Nickel in London slumped 2.4 percent to $20,848 and lead dropped 2 percent to $1,813 a ton. Zinc declined 1.5 percent to $1,906.50 and tin lost 0.3 percent down at $17,850 a ton.

Vale has now increased its participation in Belvedere to 75,5% from 51%.

AMCI, Vale and joint-venture partner (JV) Aquila Resources jointly own the project.

Vale stated that its preliminary estimates have found that once it was fully developed, Belvedere could reach a production capacity of up to seven-million tons a year of coking coal.

“Investment in the coal business is an important part of Vale’s growth strategy,” the Brazilian mining giant said.

The Belvedere coal JV currently holds an on-site resource in excess of 3,8-billion tons, of which 1,5-billion tons is classified in the indicated category, and 2,3-billion tons in the inferred category.

Subject to the completion of all necessary feasibility studies and the receipt of regulatory approval, the Belvedere project is planned to start exporting coal by 2014.

Vale has coal operating assets and a portfolio of exploration projects in Australia and Colombia, and minority interests in two JVs in China. Vale was also developing the Moatize project in Mozambique and has mineral exploration initiatives in several other countries.

Surprisingly strong U.S. housing data for April drove
optimism about the economy, boosting stocks and driving up oil
prices.

The stock rally — a 2.3 percent rise for the Dow Jones
Industrial Average .DJI — also eased concerns that Europe’s
sovereign debt crisis could restrain a fragile economic
recovery.

“Investors are waking up to the positive story coming from
the United States. Shocks from Europe could knock us back
again, but ahead of the payrolls numbers, I think these markets
will be firm,” a trader in Hong Kong said.

Friday will see the release of U.S. non-farm payrolls for
June, viewed by many as the key gauge of the nation’s economic
recovery, with the market looking for an increase in excess of
500,000.

Three-month copper on the London Metal Exchange CMCU3
rallied $65 to $6,730 by 0336 GMT, and earlier touched $6,760,
reversing the previous day’s loss.

“I don’t see a strong rebound. Sentiment is cautious after
the correction in the past few weeks,” Barclays Capital analyst
Yingxi Yu said.

“Metals are still being weighed down by concerns about
China — those are probably more important than the crisis in
Europe, but growing uncertainty about the global economy may
delay Chinese efforts to slow growth and that may be positive”

On the supply side, copper’s longer term outlook saw a
boost after global miner Xstrata (XTA.L: Quote) said it has suspended
almost A$1.2 billion ($1 billion) in coal and copper mining
projects in Australia, blaming Canberra’s new mining tax.

Xstrata, which last month halted some copper exploration in
the country’s north, said on Thursday it was now suspending a
A$600 million project to expand its Ernest Henry copper mine.

Benchmark third-month Shanghai copper SCFc3 rose 560 yuan
to 53,960 yuan, but zinc SZNc3 extended losses from the
previous session, when the market hit its downside limit, to
fall 0.6 percent to 15,115 yuan.

LME aluminium CMAL3 rose 0.8 percent to $2,000 a tonne,
but technicals pointed to a slightly weaker market, targeting
$1,920 for as long as the market holds below $2,025.
[TECH/C-MET]
Base metals prices at 0336 GMT
Metal Last Change Pct Move End 2009 YTD pct
chg
LME Cu 6730.00 65.00 +0.98 7375.00
-8.75
SHFE Cu* 53960.00 560.00 +1.05 59900.00
-9.92
LME Alum 2000.00 15.00 +0.76 2230.00
-10.31
SHFE Alum* 14955.00 20.00 +0.13 17160.00
-12.85
COMEX Cu** 304.75 1.55 +0.51 332.75
-8.41
LME Zinc 1827.00 26.00 +1.44 2560.00
-28.63
SHFE Zinc 15115.00 -95.00 -0.62 21195.00
-28.69
LME Nickel 20050.00 400.00 +2.04 18525.00
8.23
LME Lead 1725.00 29.00 +1.71 2432.00
-29.07
LME Tin 17675.00 25.00 +0.14 16950.00
4.28
LME/Shanghai arb^ -181
Dollar/yuan 6.8298 \ 6.8303
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month

“The decisions represent the initial findings from Xstrata’s ongoing review of planned investment into its Australian operations and growth prospects as a result of the Australian Government’s proposed Resource Super Profits Tax,” the Swiss-based company said in a statement.

By Ray Brindal, Dow Jones Newswires; 612 62080902;

(”Xstrata: Suspends Expenditure On Wandoan Coal, Ernest Henry Underground Copper Projects,” at 0115 GMT, misstated the development spending in the first paragraph. The correct version follows:)

CANBERRA -(Dow Jones)- Mining giant Xstrata Plc (XTA.LN) on Thursday said it will stop immediately development spending of A$586 million on its A$6 billion Wandoan thermal coal project and its A$600 millionErnest Henry underground copper project in Australia’s Queensland state.

“The decisions represent the initial findings from Xstrata’s ongoing review of planned investment into its Australian operations and growth prospects as a result of the Australian Government’s proposed Resource Super Profits Tax,” the Swiss-based company said in a statement.

Clifford was laughing away and the lads could well have been amused to have together amassed a net worth exceeding $50 million courtesy of their exploitation of Australia’s mineral wealth during the China boom.

Indeed, even after all these claims that the proposed RSPT has smashed resource company share prices, the combined market capitalisation of BHP and Rio today is about $400 billion.

That’s more than the market capitalisation of the world’s most valuable company,  Texan oil giant Exxon-Mobil, which is this morning capitalised at $US285 billion ($A341 billion).

Rio Tinto director Sir Rod Eddington last night entered the fray slamming the Rudd government’s policy-making process and failure to consult.

This was a powerful hit given Sir Rod is chairman of Infrastructure Australia and also chaired the long since disbanded business advisory council, which Kevin Rudd established when opposition leader.

However, there is one fundamental problem with the mining industry’s complaints about a lack of consultation — they would never have agreed to such a monumental tax slug anyway.

Like most democracies, a combination of unprecedented stimulus spending and plunging revenues has left Australia structurally in deficit. In our case, the debt-funded government spending by Canberra and the states exceeds revenues by about $80 billion a year, much of which is borrowed offshore.

Rather than sending more than $50 billion a year offshore to the foreign owners of more than $500 billion worth of Australian resources projects, surely it makes sense to tax more of this capital flow given that prices for commodities such as iron ore have increased six-fold over the past decade.

This would improve Australia’s current account deficit and the Budget position of the federal government, which, in turn, is the largest financier of state spending.

If you asked the community who they’d like to see a $10 billion annual tax slug imposed on, then the obvious answer is foreign mining companies, which are making out like bandits.

None of this excuses the incompetent political selling job that Kevin Rudd is doing, prompting Alan Kohler to label its spin a disgrace on Business Spectator this morning.

While Rudd should be flogged for his reckless stimulus spending, backflips and sneaky spin, commentators who are railing against the RSPT should nominate the sector they believe should instead cop a tax slug, or the proposed austerity measures that should be imposed.

Elected officials have a duty to extract maximum value for public assets. A mining concession is like one on-going privatisation program and Australia has the world’s best dowry and the world’s most foreign-owned resources sector, largely due to the incompetence of the Australian Directors Club in squandering the assets over several decades.

Look no further than MIM’s ridiculous sell out to Xstrata in 2003, something Paul Keating, MIM CEO Vince Gauci and even Robert Gottliebsen were in furious agreement about opposing at the time.

Despite what Zug-based Xstrata CEO Mick Davis might claim in his letter to the Financial Times this morning, his company has more than tripled the $18 billion it has invested in Australia over the past decade.

The same goes for Rio Tinto and BHP. When the BHP board gave away 42% of the company to Billiton in 2001, this was only worth about $25 billion at the time.

Today 42% of BHP is worth about $100 billion. No wonder former Billiton and BHP-Billiton CEO Brian Gilbertson claims that he still gets thanked by fund managers whenever he visits Cape Town for giving them exposure to such wonderful Australian assets.

Gilbertson, by the way, has so far collected more than $20 million from his exposure to Australia’s resources dowry and is on an indexed pension for life that is presently running at almost $2 million a year.

If BHP-Billiton has to pay an extra $2 billion a year in tax to Canberra, it will still be valued by the market at close to $200 billion and London-based Gilbertson will still collect his outrageously excessive pension.

In a statement, BHP Billiton has advocated for tax to be levied on the market value of minerals alone, which it said would not discourage investment in Australia.

‘‘The tax should vary by commodity, because the investment characteristics and margins of individual minerals are different,’’ the company said.

The meeting comes after weeks of intense campaigning by the mining industry and a day after Rio Tinto executives criticised the government’s consultation for being too narrow.

As Treasury officials met with the big end of the mining industry, Treasurer Wayne Swan was in his home city of Brisbane negotiating with Queensland Premier Anna Bligh on the tax.

Ms Bligh is understood to have argued for the profit threshold to be raised from 6 per cent to 11 per cent.

Canberra’s threshold proposal is based on the 10-year government bond yield, often considered a safe investment.

‘‘Today’s meeting was very constructive and is part of ongoing discussions,’’ Ms Bligh said in a statement.

Eminent economist Ross Garnaut, who advocated a resource rent tax in the mid-1970s, has criticised the government for not doing enough to win public support for the proposal.

The chairman of Lihir Gold told ABC Television on Thursday night ‘‘small modifications’’ could be made to the resource tax.

‘‘There are a couple of ways of making sure that you don’t take more than the economic rent with a good mineral tax regime … allow a higher return before you start taking anything.’’

The federal government has tried to liken its resource rent tax plan to the 40 per cent petroleum resource rent tax (PRRT) which has, since 1987, taxed the profits of offshore oil and gas projects.

Opposition resources spokesman Ian Macfarlane said the Rudd government’s tax proposal was more punitive than the petroleum resource levy brought in by the Hawke government.

‘‘The PRRT was introduced after an extensive two-year consultation process that was used to design its parameters, while the resources tax has been thrust on industry with little regard for its destructive consequences,’’ he said in a statement. ‘‘The PRRT, when introduced, applied only to new stand-alone projects, but the resources super tax is a retrospective slug on all projects.’’

While Opposition Leader Tony Abbott has vowed to scrap the resource tax, he dodged a question about whether he could guarantee that under a coalition government there would be absolutely no additional taxes on the mining industry.

Prime Minister Kevin Rudd dismissed fears the government’s resource super-profits tax was linked to the Australian dollar suffering a 12 per cent fall in the past three weeks.

The currency has fallen below 81 US cents for the first time since July 2009, after reaching 93 US cents in late April as investors responded to the European financial panic.

BHP Billiton’s vice president of government relations, Bernie Delaney, and his cohorts spent more than two hours with Treasury officials in Canberra today.

BHP Billiton says the 40 per cent super-profits tax could make Australia uncompetitive and result in lost investments.

VHeadline News Editor Patrick J. O’Donoghue reports:

Sayago is the newly appointed president of the Alcasa aluminum state company. During his address, he insisted on highlighting the importance of corresponsibility between workers and directors to end old structures.

According to a report in the opposition Correo del Caroni, the workers have mostly accepted Sayago’s appointment but wanted to hear what he

had to say on passive liabilities, benefits and the food tokens.

Sayago promised more worker participation and power in the heavy industry but did not enter into the matter of liabilities and benefits.

Those interviewed by El Correo afterwards criticized Sayago’s discourse, saying he did not say anything about how the company will get back on its feet again.

Union mafias are putting their bets on government inability or unwillingness to pay huge liabilities and benefits and they remain engaged in sabotaging any attempt to set up worker committees and worker control. They have the full support of the local oligarchy and their media.

When Carlos Lanz Rodriguez was president two years ago, he organized a successful worker control initiative that was torpedoed by the union mafia who practically ran Lanz Rodriguez out of town.

The blaze broke out late on Thursday night and took about three hours to extinguish, a spokeswoman for Dutch-based Nyrstar said from the site on Tasmania island off the east coast of Australia.

The damage was still being assessed, she said.

‘The damage assessment is underway and will take some time. At this point we estimate production loss to be approximately 20 percent,’ she said. ‘We do not expect that the production loss will have any impact on our customers in the immediate future.’

BHP Billiton’s vice president of government relations, Bernie Delaney, and his cohorts spent more than two hours with Treasury officials in Canberra on Friday.

BHP Billiton says the 40 per cent super-profits tax could make Australia uncompetitive and result in lost investments.

The government has also been lobbied by state governments and an eminent economist who advocates changes to the tax.

In a statement, BHP Billiton has advocated for tax to be levied on the market value of minerals alone, which it said would not discourage investment in Australia.

“The tax should vary by commodity, because the investment characteristics and margins of individual minerals are different,” the company said.

The meeting comes after weeks of intense campaigning by the mining industry and a day after Rio Tinto executives criticised the government’s consultation for being too narrow.

As Treasury officials met with the big end of the mining industry, Treasurer Wayne Swan was in his home city of Brisbane negotiating with Queensland Premier Anna Bligh on the tax.

Ms Bligh is understood to have argued for the profit threshold to be raised from six per cent to 11 per cent.

Canberra’s threshold proposal is based on the 10-year government bond yield, often considered a safe investment.

“Today’s meeting was very constructive and is part of ongoing discussions,” Ms Bligh said in a statement.

Eminent economist Ross Garnaut, who advocated a resource rent tax in the mid-1970s, has criticised the government for not doing enough to win public support for the proposal.

The chairman of Lihir Gold told ABC Television on Thursday night “small modifications” could be made to the resource tax.

“There are a couple of ways of making sure that you don’t take more than the economic rent with a good mineral tax regime … allow a higher return before you start taking anything.”

The federal government has tried to liken its resource rent tax plan to the 40 per cent petroleum resource rent tax (PRRT) which has, since 1987, taxed the profits of offshore oil and gas projects.

Opposition resources spokesman Ian Macfarlane said the Rudd government’s tax proposal was more punitive than the petroleum resource levy brought in by the Hawke government.

“The PRRT was introduced after an extensive two-year consultation process that was used to design its parameters, while the resources tax has been thrust on industry with little regard for its destructive consequences,” he said in a statement.

“The PRRT, when introduced, applied only to new stand-alone projects, but the resources super tax is a retrospective slug on all projects.”

While Opposition Leader Tony Abbott has vowed to scrap the resource tax, he dodged a question about whether he could guarantee that under a coalition government there would be absolutely no additional taxes on the mining industry.

Prime Minister Kevin Rudd dismissed fears the government’s resource super-profits tax was linked to the Australian dollar suffering a 12 per cent fall in the past three weeks.
The currency has fallen below 81 US cents for the first time since July 2009, after reaching 93 US cents in late April as investors responded to the European financial panic.

BHP Billiton has told a Federal Government consultation panel that the proposed resources super tax does not meet sound principles of taxation.

“As previously conveyed to the Government, BHP Billiton believes any new tax on the minerals resources industry needs to be prospective, not retrospective; ensure the overall tax burden is competitive with other mineral rich countries; vary by commodity and be levied on the value of minerals alone,” the company said in a statement.

Woodside chief executive Don Voelte said that although the company was hardly affected by the proposed new resources tax, it still posed “huge implications” for Woodside.

Mr Voelte said the proposed tax has been viewed negatively in international markets.

“We have to be seen as a sovereign, risk-free country, in other words a very stable country,” Mr Voelte said at a business lunch in Sydney.

He said Woodside had to borrow from offshore markets including places such as New York, Japan, Asia and China and that constant tinkering with the tax system had not been received well offshore.

“The thing that bothers me probably the most on this is, this is the third time in three years that we have had a major change to tax,” Mr Voelte said.

“And, if this Government starts to be seen as willy-nilly changing tax any time they want to on this thing, it is going to be viewed very negatively. We have to be a very solid place for these people to invest in. They have to have security of their investment in Australia.”

BHP said it had told the panel the proposed tax did not recognise how investment decisions were made in the resources industry and would place Australia in an uncompetitive position globally.

The company told the panel the government should take time to properly engage with the mining industry on all aspects of the tax rather than pursue selective adjustments.

This morning, BHP representatives met with the government’s panel set up to consult with miners over its proposed resources super profits tax which would place a 40 per cent tax on the profits of Australia’s big miners.

The Federal Government established the tax consultation panel to explain to resources companies the features of its proposed 40 per cent resources super profits tax.

The panel includes Treasury and Australian Taxation Office officials, as well as a representative from the Business Council of Australia and an independent adviser.

Since the government announced the new tax proposal earlier this month in its response to the Henry tax review, a host of resources companies have complained about the proposed arrangements.

 Financial markets around the world tumbled with renewed
selling frenzy as concern mounted that a record EU/IMF bailout
for Greece would not stop a debt crisis spreading in the euro
zone. [ID:nLDE6430PO]

 The Greece woes also helped sink the euro to fresh one-year
lows. [USD/] [ID:nSGE64400A]

 "There's negative news all over the place -- Greece, mining
tax in Australia, and strong dollar. China is not contributing
any good news either, as policy and the equities market are not
supportive," said Li Rong, an analyst at Great Wall Futures.

 The next support level for London copper is around the
previous low at $6,225, while Shanghai copper may head down to
just above 50,000 yuan, Li added.

 Shanghai's benchmark third-month copper futures contract
SCFc3 dipped to 56,180 yuan a tonne earlier in the day, its
lowest since February 12, before rebounding to 56,410 yuan by
0223 GMT.

 For a graphic showing the technical outlook, see:
 here

 The most-active contract for August deliver SCFQ0 fell
nearly 3 percent to 56,470 yuan a tonne.

 Three-month copper on the London Metal Exchange CMCU3
edged up $5 to $7,035, after having hit a more than two-month
low of $6,998 in the previous session.

 "The irrational rally is over, and now it's time to return
to reality," said a copper trader based in the southern
province of Zhejiang, "The correction in prices may last a
month or two."

 He added that although the general trend is pointing
downward, it would take more to hammer LME copper below the key
$7,000 level.

 LME copper MCU3=LX prices show a bearish technical signal
and are expected to fall further to $6,923 per tonne as a
continuation of the sharp drop yesterday, according to Wang
Tao, a Reuters market analyst. [TECH/C]

 For a graphic showing the technical outlook, see:
 here

 LME copper inventories have been on a steady decline since
the beginning of March, down 2,325 tonnes on Tuesday to 496,975
tonnes, the lowest since the end of 2009. [MCU-STOCKS]

 But copper stocks monitored by the Shanghai Futures
Exchange climbed to 189,441 tonnes, their highest since late
August 2002, despite that spring is the the traditional season
for high copper consumption.

 "Even though we are in the peak consumption season,
consumers haven't been able to digest the overly abundant
supply. We're seeing high exchange stocks, a lot of imports and
high domestic output," said Li of Great Wall Futures.

 "When summer arrives, we may see more pressure from supply
on prices."

 LME nickel CMNI3 fell to a near one-month low of $24,350
a tonne, before recovering to $24,500 a tonne.

 Shanghai zinc SZNc3 sank to a near two-month low of
17,360 yuan before recovering to 17,465 yuan. LME zinc CMZN3
was up $25 to $2,173.

 Glencore [GLEN.UL] has resumed operations at Iscaycruz, its
largest lead and zinc mine in Peru, which had been shut for
more than a year because of low prices.[ID:nN04100205]
  Base metals prices at 0223 GMT
 Metal         Last       Change   Pct Move  End 2009 YTD pct
chg
 LME Cu        7035.00      5.00     +0.07    7375.00
-4.61
 SHFE Cu*     56410.00  -1670.00     -2.88   59900.00
-5.83
 LME Alum      2173.00      8.00     +0.37    2230.00
-2.56
 SHFE Alum*   15855.00   -230.00     -1.43   17160.00
-7.60
 COMEX Cu**     318.75      2.30     +0.73     332.75
-4.21
 LME Zinc      2173.00     25.00     +1.16    2560.00
-15.12
 SHFE Zinc    17465.00   -595.00     -3.29   21195.00
-17.60
 LME Nickel   24500.00   -150.00     -0.61   18525.00
32.25
 LME Lead      2082.00     22.00     +1.07    2432.00
-14.39
 LME/Shanghai arb^          -221
 Dollar/yuan          6.8265 \ 6.8275
 ** 1st contract month for COMEX copper
  * 3rd contact month for SHFE aluminium, copper and zinc
  ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
 third month

For the first quarter, the company produced 23.2 million pounds of copper and 194,000 pounds of molybdenum.

Copper grade for the quarter was about 10 percent above life-of-mine average grade, Taseko said in a statement.

“In approximately six months, major construction projects will be complete and the targeted annual production level of 115 million pounds of copper will soon follow,” Chief Executive Russell Hallbauer said in a statement.
Taseko, whose assets include the Gibraltar copper-molybdenum mine and the Prosperity gold-copper project, had earlier said it sees 2010 production to exceed 80 million pounds.

Shares of the Vancouver-based company closed at C$5.44 Tuesday on the Toronto Stock Exchange.

The mining companies asked for price gains of between 90 percent and 100 percent for the steelmaking ingredient as global demand recovered this year, Luo Bingsheng, deputy chairman of the association, said today at a briefing in Beijing.

“They adopted a threatening policy,” Luo said. “If you don’t accept iron ore prices before a deadline, they threaten to cut supplies. Is this iron ore negotiations?”

The World Steel Association called on authorities globally to examine the iron ore market after Brazil’s Vale broke with a 40-year custom of selling on annual contracts and won a 90 percent price increase from Japanese mills. The Chinese government this month said it was investigating the possibility that BHP Billiton, Rio Tinto and Vale may be monopolizing supplies of the steelmaking ingredient.

Steelmakers in China have about two months of iron ore stockpiles as of the end of March, enough to ensure “stable production,” Luo said. Some mills have signed tentative agreements with the mining companies to ensure materials for their furnaces, he said, without giving details.

Amanda Buckley, a Melbourne-based spokeswoman at BHP Billiton, declined to comment. David Luff, a spokesman at Rio, wasn’t available for an immediate comment.

‘No Options’

Suppliers cut exports to China during price talks earlier, Angang Steel Co., the biggest Chinese steelmaker traded in Hong Kong, said April 21. Chinese steelmakers have “no options” and have to accept price demands, Jiangsu Shagang Group Co., the nation’s biggest privately held mill, said this month.

Global steel demand may expand 10.7 percent this year, rebounding from last year’s 6.7 percent slump, the World Steel Association said April 20. That’s leading to competing iron ore demands from Europe, Japan and South Korea for the material.

“The global iron ore market is in serious shortage,” Luo said. “Apart from China, steel production increased by 33 percent in the first quarter, while China’s output rose 24.5 percent.”

]]> http://copperprice.in/news/china-says-vale-bhp-threaten-to-cut-iron-ore-supply.html/feed 1 http://copperprice.in/news/china-steel-product-stockpile-to-fall-9-pct-in-april-cisa.html http://copperprice.in/news/china-steel-product-stockpile-to-fall-9-pct-in-april-cisa.html#comments Thu, 29 Apr 2010 07:13:43 +0000 admin http://copperprice.in/?p=1372 China’s steel product inventory by the end of April is expected to fall 9 percent compared with the previous month, the country’s steel association said on Wednesday.
Speaking at a briefing, China Iron and Steel Association vice-chairman Luo Bingsheng told reporters that steel product stocks in 20 major cities were expected to drop to 9.77 million tonnes by the end of the month.

But Luo said the cost pressures on steel mills were likely to mount in the second quarter as the impact of soaring iron ore costs starts to be felt.
He said in the first quarter, the mills were mostly using cheaper ores shipped into China in 2009.