blackrock backs copper, slams mining tax ...

It's nice to see one of the biggest Investment Companies in the world openly stating its backing of copper. Worth the read for up and coming copper juniors imo! - Tweets (:
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[Source: www.smh.com.au]

BlackRock backs copper, slams mining tax
October 25, 2010 - 5:21PM

The manager of the world's largest mining mutual fund says copper stocks are currently good value and the outlook for the metal is strong.

BlackRock Investment Management natural resources equity unit managing director Evy Hambro said copper companies were cheap compared to the price of the commodity.

The copper price has recently surged to about $US8,300 a tonne after plunging to less than $US3,000/t in late 2008 amid the global financial crisis.
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"We like the outlook for copper," the London-based Mr Hambro said. "We think copper prices are likely to stay strong over the medium to long term.

"As a result, we don't think that view is reflected in the valuation of the equities of the companies that produce copper."

He said BlackRock spread its risk by investing in the full gamut of copper companies, from major producers such as Freeport-McMoRan Copper & Gold to explorers.

In the mid-cap range, BlackRock holds interests in First Quantum Minerals, which is mining copper and gold in Africa, and Perth-based Equinox Minerals.

Equinox on Monday unveiled a friendly $1.25 billion takeover of Melbourne-based Citadel Resource Groupto give it control of a Saudi Arabian copper project.

BlackRock-managed Global Mining Investments, which is listed on the Australian stock exchange, on Monday said it was favouring commodities with the most severe supply-demand imbalances such as copper, coking coal, iron ore and platinum.

It was only investing lightly in aluminium, where there was over-capacity.

Mr Hambro said the federal government's proposed mineral resource rent tax had been badly handled and had dented the valuations of Australian miners.

"I think Australia has raised its risk profile as a place for capital to work because of the uncertainty that it (the tax) has generated," he said. "Until we have a final resolution on this that all parties are happy with, it is going to remain very much under review in terms of the discount rate we've used for Australian resource assets.

"Everyone changes tax rates at some stage but when you change it to such a degree and in such a fashion without consultation ... that's very damaging for confidence in the sector.

"These kinds of changes, if they're needed by a country, obviously should be done in the least disruptive and least unsettling way possible."

Shares in Global Mining Investments were up 3 cents, or 2.5 per cent, at $1.25.

AAP


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