another a$3 bln on iron ore expansion , page-32

share price target raised by ubs BHP Billiton, Rio Share Price Targets Raised by UBS
Dec. 2 (Bloomberg) --

BHP Billiton and Rio Tinto Group, the world's largest and third-largest mining companies, had their share price targets raised by UBS AG on expectations of higher copper and gold prices.

BHP Billiton's share price target was raised by 4 percent to A$27.00, and Rio Tinto's share price target was increased by 10 percent to A$75.00, analysts Glyn Lawcock, Paul Galloway and Jeremy McNally said in a report yesterday. BHP Billiton shares closed yesterday at A$21.50, while Rio stock closed at A$60.40.

Copper prices rose to a record in London yesterday as demand increase in China and the U.S. Gold prices this week reached a 22-year high as investors bought bullion to diversify risks and hedge against inflation. Higher commodity prices helped Melbourne-based BHP Billiton and London-based Rio post record profits this year.

``Inflation risks and the steady increase in equity risk bolster our case that gold and gold equities will perform over the next 12 months,'' the UBS analysts said. ``China demand, supply constraints and costs, under-investment, bottlenecks and investment fund participation,'' will also help copper prices.

UBS raised its 2006 copper price forecast by 32 percent to $1.80 a pound, and its gold price forecast by 14 percent to $520 an ounce.

Copper prices have averaged $3,432.50 a ton, or $1.56 a pound, this year on the London Metal Exchange. The metal closed at a record $4,366 a ton yesterday. Gold for immediate delivery has averaged $440.02 an ounce, and yesterday closed at $503.90, a 22-year high.