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Gold/Mining/Energy : Copper - analysis -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (1396)	3/1/2006 12:12:10 PM
From: Stephen O	Read Replies (1) \| Respond to of 2131

Vedanta Shares Have Biggest-Ever Gain on Indian Duty Reduction 2006-03-01 07:00 (New York) By Chanyaporn Chanjaroen March 1 (Bloomberg) -- Shares of Vedanta Resources Plc had their biggest ever gain after the metals producer said lower import duties on aluminum, copper and zinc in India will fuel the country's demand for the materials. India yesterday cut import duties on aluminum, copper, zinc and alumina to 7.5 percent from 10 percent as part of its annual budget starting April 1. It also reduced tariffs on ores and concentrates to 2 percent from 5 percent. The decision won't have a ``material'' effect on Vedanta's results in the coming year, it said in a Regulatory News Service statement today. London-listed Vedanta is the biggest producer of zinc and copper in India, whose economy grew 7.6 percent last year. Zinc prices rose 53 percent in 2005 and copper gained 40 percent. ``Vedanta may be well-positioned to capitalize'' on this, Charles Kernot, a mining analyst at Seymour Pierce Group Plc in London, said today in a phone interview. Shares of the company rose as much as 92.5 pence, or 9.4 percent, to 1,078 pence today and traded at 1,074 pence as of 11:47 a.m. London time. The stock has more than doubled in the past year, valuing the company at to 3.02 billion pounds ($5.29 billion). ``Vedanta's growth project pipeline is peerless relative to its size among larger U.K.-listed miners,'' a Merrill Lynch & Co. team of analysts led by Daniel Fairclough said in a report. Merrill today lifted its Vedanta price target to 1,500 pence. The company supplies as much as 75 percent of India's zinc demand, estimated at 450,000 tons in the year through March, Vedanta spokesman Sumanth Cidambi said today in a phone interview from London. India's second-largest zinc producer, Binani Industries Ltd., supplies about 8 percent of domestic demand, according to Vedanta. Zinc Demand India's demand for zinc is growing at an average of 10 percent each year, Cidambi said. The country exports more copper than it imports and is expected to consume 420,000 tons in the year ending March 31, he added. The reduction in duties ``will help boost demand for the metals in India and will support key sectors like power and infrastructure,'' Cidambi said. India's plan to allocate almost 20 billion tons of coal, held in blocks formerly reserved for state-owned enterprises, to private companies will ``positively impact'' Vedanta's 500,000- ton-per-year aluminum smelter to be built in Jharsuguda in the state of Orissa, the company said. Coal will be used to generate power for the smelter due for completion by the end of 2010. Details of the coal-allocation plan haven't been announced. --Editors: Carrigan (jdg).