Disappointing December retail figures only added to the negative sentiment.
The All Ordinaries closed at 4644.1 points, a 0.6% drop, while the S&P-ASX 200 fell 0.5% to 4621.6 points.
On the London Metal Exchange overnight, copper dropped 3.3% to $US6567 per tonne, lead fell 4.6% to $2002/t and zinc shed 3% to $2081/t.
Barclays Capital commodities analyst Yingxi Yu told Dow Jones Newswires that metal prices should improve in the first half of this year, despite a volatile start to 2010.
"Overall, we think the demand recovery will trump concerns over monetary tightening,” he said.
Meanwhile, Rio Tinto slipped 2.6% or $A1.88 to $70.12, while BHP Billiton dropped 1.2% or 51c to $40.99.
News that the Australian Securities & Investments Commission will continue to pursue Fortescue Metals Group in the Federal Court sent the company’s shares down 4.2% or 21c to $4.77.
According to a Dow Jones report, a consortium of Korean companies is preparing to make a bid to take a 15% stake in Extract Resources’ Rossing South uranium project in Namibia.
Extract has previously said it would consider introducing a partner into the development after receiving numerous expressions of interest.
Shares in Extract closed 4.4% higher at $7.56.
The big winner of the day was junior explorer Botswana Metals after announcing a copper intersection of 4m at 16.99% copper from 52m at its Airstrip copper anomaly in Botswana.
Shares were up 120% in early trade but continued to soar throughout the session, closing 321% or 12.2c higher at 16c.
Cape Lambert Resources was hit by the withdrawal of its huge Q Copper initial public offering, a spin-off of collapsed CopperCo’s Lady Annie assets in Queensland.
Shares in Cape Lambert closed 12% or 6c down at 44.5c.
Cape Lambert executive chairman Tony Sage told MiningNews.net this morning that the float has a better chance of succeeding once the Lady Annie mine life is extended to 10 years, so the company will focus on drilling over the next couple of months.
