Miners put on more weight

AUSTRALIAN miners ended on a positive note today as local investors took their lead from yet more gains overnight in US equities rather than the slight drop in LME base metal prices.


The benchmark S&P-ASX 200 index was up 1.06% to a two-week high of 6165.6 points.

However, BHP Biliton and Rio Tinto closed slightly lower with BHP down 0.11% to $36.66 while Rio dipped 0.83% to $88.26.

Paladin Resources was up 4.33% to $6.50 as its increased stake in fellow uranium player Deep Yellow drove speculative buying, reported Dow Jones newswires.

Meanwhile, a Sydney-based trader said continued strikes at copper mines in Mexico were likely to boost copper prices but warned yesterday’s 8.2% rise in LME stocks could prove disturbing in the long term.

Straits Resources gained a respectable 8.42% to $4.38 amidst news that Toodyay Resources agreed to acquire Ord Investment for 359.4 million Toodyay shares.

Ord has the right to acquire the Bushranger copper exploration project in New South Wales from Straits.

Other major movers among the copper players include Exco Resources, which gained 12.07% to end at 32.5c and Jabiru Metals. Jabiru put on 10.16% to $1.41.

At the other end of the spectrum, Aditya Birla shed 5.07% in trading to close at $3.18.

Meanwhile, Dow Jones newswires quoted a Hong Kong trader as saying that spot gold was likely to trade between $672-4 per ounce range while “waiting for clearer signs that equities markets will stabilize.”

Newcrest Mining put on 4% to close at $26 while Lihir Gold closed up 2.26% to $3.17.

Meanwhile, China’s steel production capacity in 10 regions is expected to increase by 53.63 million tonnes per annum by 2010, despite promising the central government that they would phase out 41.67Mtpa of outdated capacity, said China Iron & Steel Industry Association vice director Chi Jingdong.

He said strong domestic and foreign demand continued to draw investment into the sector with total consumption of steel products in China likely to top 520Mtpa in 2010.

“If (China’s) GDP growth continues to grow around 11 percent every year, then the forecast will prove to be conservative,” added Chi.

The news gave iron-ore miners a general boost with Fortescue Metals Group heading up 6.74% to $33.25 while Portman was not far behind with a 5.54% rise to close at $8.76.

Fox Resources announcement that rock chip samples confirmed surface iron enrichment greater than 40% at its Mt Oscar iron ore prospect. Shares in the company were up 0.51% to 99.5c.