i am chasing, page-85

Tradetech LLC

"supply is ample to meet current requirements"

BHP

"Losses on copper prices may cut first-half earnings before interest and tax by $240 million and costs of buying uranium on the spot market to meet contracts may slice $95 million from EBIT, the company said."

wasn't pdn buying on market...

ample supply???? Yep...hmmmmmm...

BHP Iron Ore Output Rises to Record on China Demand (Update6)

By Rebecca Keenan

Jan. 23 (Bloomberg) -- BHP Billiton Ltd., seeking to acquire rival Rio Tinto Group for $100 billion, said second-quarter iron ore output rose 9 percent to a record driven by demand from China.

Iron ore output increased to 27.75 million metric tons in the three months ended Dec. 31 from 25.4 million tons a year earlier, the Melbourne-based company said in a statement.

BHP's growth rate in iron ore output is tracking Rio, which reported an 11 percent gain in production of the steelmaking raw material. BHP Chief Executive Officer Marius Kloppers wants to convince investors his company is a better manager and operator of mines and plants than Rio, which has rejected his hostile offer.

``It is the battle of the production reports and at the moment they are neck and neck,'' Ken West, who helps manage A$3 billion at Perennial Investment Partners Ltd., said from Melbourne. ``Both of them can't afford to falter because when you are trying to attack you have to keep your own house solid.''

BHP rose the most in two decades, up A$2.89, or 9.3 percent, to A$33.89 at the 4:10 p.m. Sydney time close on the Australian Stock Exchange. London-based Rio rose 5 percent. The benchmark index rose by 4.4 percent after the Federal Reserve cut the benchmark interest rate by three quarters of a percentage point.

Growing evidence that the U.S. economy is slowing has wiped out $7.3 trillion in global stock-market value this year. Cia. Vale do Rio Doce, the world's biggest producer of iron ore, confirmed Jan. 21 it held talks to buy Xstrata Plc and said tumbling stock markets made a deal more difficult to complete.

`Outlook Strong'

BHP has until Feb. 6 to formally bid for Rio, the world's third-largest mining company, or walk away for six months, the U.K. Takeover Panel has ruled. Its three-for-one all share offer made in November was rejected by Rio as undervaluing its mines and growth prospects.

The demand outlook for iron ore remains ``very strong,'' BHP said in the statement to the exchange. BHP has reported eight consecutive half-year records in iron ore production, it said. Iron ore output also gained from the previous quarter, better than UBS AG had expected in a Jan. 11 report.

BHP had record quarterly output for petroleum, manganese, coking coal and iron ore. The half-year result ``reinforces our strong track record of project delivery,'' the company said. Rio had record quarterly output in iron ore, bauxite, alumina and aluminum, the company said Jan. 16.

BHP wants to create a company that would be the biggest producer of energy coal, copper and aluminum, an effort that Rio's Chief Executive Officer Tom Albanese has said is ``dead in the water.'' Rio can deliver iron ore quicker and cheaper to Asian steel mills than BHP, Albanese said. Rio is the world's second- largest exporter of the ore.

Overtook Japan

China overtook Japan as the largest buyer of iron ore in 2003 because of increased production of steel used in cars, buildings, and appliances. The Chinese economy grew at more than 11 percent for the first three quarters of last year.

``BHP will want to put the best possible light on the report,'' Peter Rudd, a Melbourne-based analyst who helps manage the equivalent of $755 million at Carrol, Pike & Piercy Pty, said by phone before the results were released. ``Like Rio Tinto, they will be going flat out and producing as much as they can, not just because they are making a takeover bid but because ongoing demand hasn't diminished.''

Copper output rose 16 percent from a year earlier to 348,100 metric tons, the company said in the statement to the exchange. BHP said increased production at both the Escondida and Spence mines in Chile contributed to record half-year copper concentrate output. The base metals unit, including copper, was BHP's biggest contributor to earnings in fiscal 2007.

Copper Smelter

Copper cathode output from the Olympic Dam mine in South Australia state rose 7.8 percent from a year ago. Production at the mine was lower than expected because of unplanned smelter interruptions and lower grades, BHP said.

The mine has ``been a pretty poor performer,'' Peter Chilton, who helps manage $1.4 billion at Constellation Capital Management in Sydney, said by phone. ``Part of the strength coming through for BHP is in oil, but Rio is not interested in oil.''

BHP had record petroleum output after the start-up of fields in the U.S. and Australia. Oil and gas output rose 10 percent to 30.2 million barrels of oil equivalent, the company said.

Petroleum production will steadily increase in the second half of the year ending June 30 ``due to the contribution of high- margin output from these projects,'' BHP said.

Coking coal output was up 8 percent, while thermal coal, used in power stations, fell 1 percent to 20.6 million tons, BHP said. Infrastructure constraints on the east coast of Australia will continue to impact export sales, it said.

Losses on copper prices may cut first-half earnings before interest and tax by $240 million and costs of buying uranium on the spot market to meet contracts may slice $95 million from EBIT, the company said. These were worse than estimates from Austock Securities Ltd., which said in a report today it may cut its first-half profit estimate by 2.7 percent.

To contact the reporter on this story: Rebecca Keenan in Melbourne at [email protected]

Last Updated: January 23, 2008 00:51 EST

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Uranium Price Drops 6% as Trading Volume Dwindles (Update1)

By Yuriy Humber

Jan. 21 (Bloomberg) -- Uranium dropped 5.6 percent last week as sellers cut prices to generate business after trading volumes in 2007 fell to their lowest in a decade.

Uranium-oxide concentrate for immediate delivery declined $5 to $84 a pound, Denver-based pricing service TradeTech LLC said in a weekly report published Jan. 18. Two sales totaling the equivalent of 200,000 pounds of oxide, used to make fuel for nuclear power plants, were concluded last week.

``After weeks of little or no activity, one seller decided to adopt a more aggressive approach offering uranium at deeply discounted prices in an effort to attract buyers,'' TradeTech said. The efforts were ``moderately successful'' in a market where ``supply is ample to meet current requirements,'' it said.

Energy Resources of Australia Ltd., which supplies a 10th of the world's mined uranium, said last week that 2007 output was the second-highest on record. Supply on the spot market more than twice exceeded demand last week.

Disruption at mines run by Saskatoon, Saskatchewan-based Cameco helped propel the metal to a record $138 a pound in June. The price then tumbled about 45 percent before rallying in October, rising as high as $93 a pound at the end of that month.

``The exuberance of when the physical market was at $135, $138 means people are a bit more sensible,'' Warwick Grigor, managing director of Far East Capital Ltd., said by phone in Sydney. This year, ``most of the producers will be in a heavy surplus. People are taking advantage of that.''

African Accord

Paladin Resources Ltd., an Australian company that said in October it had start-up problems for a plant in Namibia, reported last week that output for the second half exceeded its own forecasts.

Areva SA, the French builder of nuclear reactors, last week ended a rift with the Niger government to sign a new price accord that also allows the company to begin operations at a new deposit. The Imouraren uranium deposit could be the world's second-largest untapped source of the metal, Areva said Jan. 13.

All 14 uranium mining stocks monitored by Bloomberg fell today as equities plunged worldwide and U.S. index futures dropped.

Cameco, the world's biggest uranium-oxide producer, fell as much as 8.9 percent in Toronto and traded at more than a two-year low of C$335 at 11:12 a.m. local time. Uranium One Inc., which is developing South Africa's biggest deposit of the metal, slid as much as 12 percent to C$6.60 in Toronto, the lowest since August 2006.

To contact the reporter on this story: Yuriy Humber in Moscow at [email protected]

Last Updated: January 21, 2008 11:25 EST

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