Ann: MLX: Announces Scrip Bid for Aditya Birla Minerals Limited, page-47

TD

From your post I gather you are looking to MLX to save your poor investment choice. Keep talking up that ABY dog and that copper prices will not always stay depressed. Actually copper prices are still at a historically high level and I would not be surprised to see them fall back down to USD1.50lb or lower. This is a pretty low grade underground mine that probably requires copper price at USD3.50 (or an AUD at USD60 cents at the current copper price) to be profitable.

Copper is a commodity that gets recycled, so I expect Chinese imports to fall over time. The cost of mining the copper is falling as energy, material and in some countries even labour costs are declining. Furthermore there is no short term replacement to the China infrastructure/housing growth story, which is being wound down. In combination these factors will mean that copper demand is weaker while supply stays elevated thereby putting downward pressure on the copper price into the future. The commodity supercycle is over as far as its impact on commodity prices is concerned for the next 5-10 years.

I think this offer will die as the major shareholders will get on the Cook's back to not proceed. The concern for MLX shareholders is that the Cook will just keep searching out these sorts of deals into the future and destroy the company's focus and value for shareholders.

loki