Perhaps the recent rise has something to do with a significant reduction in short positions, and analysts recommendations see Reuters article below.
I agree Levelhead & Miningnut. Lets hope some allowance for the recent slump is taken into account. The Reuters article previously posted indicates it's a possibility.
Congo Govt:Assessing Mining Review In Light Of Econ
-The Congo government is assessing the way forward for its
mining license review, taking into account the impact of the global economic downturn on cash-strapped mining companies and balancing this with the country's needs, Congo's vice minister of mines told Dow Jones Newswires
Thursday.
Junior miners in particular have been hit by slumping commodity prices on the back of a deteriorating demand environment, with several struggling to finance
projects, Victor Kasongo said.
"Mining is essential for our economy, so in the same way that we want to strengthen the capability of miners (to exploit) our vast reserves, we're not
giving up our right to share in the wealth they produce," he said.
Ministry and government discussions are ongoing at the moment, he said, with a decision "most likely" within the next fortnight.
Latest Short positions notice
ANVIL MINING LTD ("AVM-T;AVMNF-0") - Short Positions on 2008/11/30 737,180 -2,521,800 Net, 3 December 2008.
OTTAWA, Dec 3 (Reuters) - A significant, sustained rebound in commodity prices is unlikely before the second half of 2010 due to excess inventory, a protracted global recession and weakening demand in China, RBC Capital Markets said in a note on Wednesday.
"It all adds up to a tough year for metals and bulk commodities in 2009," said the research note, written by several mining analysts.
"The industry appears to have responded with production cuts more quickly than in previous cycles. However, the announced reductions will take some time to take effect."
RBC has modestly lowered commodity price forecasts for 2009 and 2010 to reflect lower global growth assumptions.
"Commodity prices may rebound from their lows over the next 12 to 18 months as the economic outlook stabilizes and begins to improve," analysts wrote.
"However, significant sustained increases in commodity prices will likely not occur until excess inventory has been eliminated and idled capacity is restarted."
Investors are recommended to enter 2009 with an underweight position in non-precious-metal miners, which are seen as underperformers next year, and focus on large, liquid, diversified operators with strong balance sheets and cash flow.
The analysts pick uranium as their preferred commodity and believe coal and iron will outperform other metals over the next 12 months. Over the longer term, zinc and molybdenum could outperform based on mine closures and project delays.
They recommend shares of uranium producers Cameco Corp (CCO.TO: Quote, Profile, Research, Stock Buzz), First Uranium (FIU.TO: Quote, Profile, Research, Stock Buzz), Uranium One (UUU.TO: Quote, Profile, Research, Stock Buzz) and UR Energy (URG.A: Quote, Profile, Research, Stock Buzz), along with bulk commodities operators Labrador Iron Ore Royalty Income Fund (LIF_u.TO: Quote, Profile, Research, Stock Buzz) and Teck Cominco (TCKb.TO: Quote, Profile, Research, Stock Buzz).
Analysts recommend metals producers Antofagasta Plc (ANTO.L: Quote, Profile, Research, Stock Buzz), Inmet Mining (IMN.TO: Quote, Profile, Research, Stock Buzz), First Quantum (FM.TO: Quote, Profile, Research, Stock Buzz), HudBay Minerals (HBM.TO: Quote, Profile, Research, Stock Buzz), Anvil Mining (AVM.TO: Quote, Profile, Research, Stock Buzz) and Katanga Mining (KAT.TO: Quote, Profile, Research, Stock Buzz) .
A bear market rally is possible in the near term, supported by a major selloff of stocks, slumping valuations and seasonal buying, the note said.
Balance sheets will remain under pressure from deteriorating commodity markets and restricted refinancing options. (Reporting by Susan Taylor; editing by Rob Wilson)
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