copper prices

So what does this mean for the OX? a potential takeover? I am not sure, but it can only be good!!!

http://www.theaustralian.news.com.au/story/0,25197,22754578-5005200,00.html

CHINA'S third-largest copper producer, Yunnan Copper Industry Group, said yesterday that a potential merger between BHP Billiton and Rio Tinto could prompt further offshore expansion by Chinese metal producers.

Yunnan Copper deputy general manager Yu Weiping said a merged entity would be in a stronger position to negotiate prices of raw materials with buyers, forcing companies such as Yunnan to seek materials straight from the source.

"After the merger, they will become more and more powerful in negotiations," Mr Yu said through an interpreter in Sydney. "So that's why we invest directly into Australian mineral resources. Although the price is high here, especially for the capex, the environment for investment is very good, so we are looking for more and more projects here."

Mr Yu was in Sydney to promote the company's investment in its Australian outfit, China Yunnan Copper Australia, which listed on the Australian Securities Exchange on October 29.

Yunnan Copper holds a 21.2 per cent stake in CYU, which has five projects throughout northern Queensland.

However, Mr Yu said he was not fazed by the potential merger or its implications for Chinese metal producers.

"No matter what activity will happen between BHP and Rio, the new company's future depends on Chinese economic development," he said.

He said that despite a greater bargaining position, a merger would create a united BHP and Rio Tinto and copper prices were unlikely to go much lower.

However, the availability of copper substitutes was also likely to keep prices from accelerating significantly.