Anglo-Australian firms BHP Billiton Ltd (BLT.L: Quote) (BHP.AX: Quote) and Rio Tinto Ltd (RIO.AX: Quote) (RIO.L: Quote) have notified Japanese steelmakers that iron ore price for the July-September period will be raised about 23 percent from the previous quarter, the Nikkei business daily said.

The paper also said Brazil’s Vale SA (VALE5.SA: Quote) is likely to follow suit.

The second consecutive quarterly hike will put iron ore at about $147 a ton, 140 percent higher than the fiscal 2009 price, the paper said.

Japanese steelmakers, who have agreed to negotiate resources prices quarterly instead of annually starting with the current fiscal year, are likely to settle for a price close to the proposed figure, the Nikkei reported.

With rapid price hikes in high-grade coal and iron ore, Japanese steelmakers are being forced to pass on the increases to large-lot users, including automakers, the daily reported.

Toyota Motor Corp (7203.T: Quote) and Nippon Steel Corp (5401.T: Quote) are huddling over a 25 percent hike for a key steel product to 20,000 yen ($217.6) per ton, it said.

With demand for coking coal and iron ore in China and other emerging economies expected to soar in the medium and long run, their prices are likely to stay on an upward trajectory, the Nikkei said.

via Mineweb.com – The world\’s premier mining and mining investment website BHP, Rio to raise iron ore prices by about 23% – Nikkei – FAST NEWS | Mineweb.

Copper ends week on upnote as sentiment improves

Data pointing to global econ/commodity demand growth led to the biggest weekly gain in copper since early April.

Author: Chris Kelly and Michael Taylor
Posted:  Saturday , 12 Jun 2010

NEW YORK/LONDON (REUTERS) -

Copper retreated from one-week highs on Friday, but still managed to score its largest weekly gain since early April, as demand expectations rose on generally positive macro readings in the United States and China — the world’s top 2 consumers.

Copper for July delivery HGN0 on the New York Mercantile Exchange’s COMEX division peaked at $2.9450, its loftiest level since June 4, before ending up 4.15 cents at $2.9040 per lb.

On the London Metal Exchange, benchmark copper for three-month delivery CMCU3 touched a one-week high at $6,545 a tonne, and ended up $69 at $6,479.

Investors turned their focus to a survey of U.S. consumer sentiment in early June, which rose to its strongest level since March 2008. The surprisingly strong data suggested the economic recovery in the world’s largest economy remained on track, and helped ease earlier jitters over an unexpected

drop in U.S. May retail sales.

In China, a slowdown in the rate of copper imports in May and a moderation in its industrial output and fixed-asset investment growth was not enough to dampen a seemingly bullish change in entiment this week.

“After frenzied talk of doom and gloom last week, it seems that markets are again expecting the global economy and commodity demand to grow,” said Bart Melek, Global Commodity Strategist with BMO Nesbitt Burns in a market commentary.

Bill O’Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey, agreed.   ”All you have been hearing is that China is in this great slowdown mode …  they may have slowed down from the peak, but the growth rates are still very impressive,” he said.  ”I think the demand from China, and the rest of Asia, is going to continue to be very strong, especially for industrial metals.”

Uncertainty regarding euro zone debt and worries about sovereign default have weighed on copper, down about 17 percent so far this quarter.  ”There was an exaggerated, very pessimistic economic scenario that had been priced into base metals,” said Gayle Berry, analyst at Barclays Capital.

“Now you’re beginning to see some of those declines being reversed because the market has realized it had became overly pessimistic based on current fundamentals,” she added.

EYE ON STOCKS

Falling stocks of copper have also helped support prices.  Copper inventories in LME warehouses fell by 1,400 tonnes to 465,000 tonnes — down from 555,075 tonnes in mid-February, its highest level since October 2003.

Aluminum CMAL3 closed at $1,945 a tonne versus a quote at $1,949/$1,950 on Thursday. LME stocks for the metal fell 6,600 tonnes to 4.49 million tonnes, down from record highs above 4.6 million tonnes touched in late January.

Nickel stocks fell 852 tonnes to levels not seen since November at 133,794 tonnes.

A rise in canceled warrants — metal already earmarked for delivery – on stocks in LME warehouses are also being watched for signs of improving demand.

On Thursday, lead canceled warrants rose to their highest level since January 2004 at 18,250 tonnes, while aluminum hit a 2010 high at 321,075 tonnes.

A lot of canceled warrants on lead stocks were for U.S. warehouses, with analysts suggesting a surge in battery restocking for the warmer summer season was unfolding.

Lead CMPB3 ended down $14 at $1,670 per tonne, while nickel CMNI3 jumped $600 to close at $19,545.   Zinc CMZN3 rose $20 to finish at $1,740 a tonne, while tin CMSN3 dipped $100 to end at $16,550.

(Additional reporting by Pratima Desai; Editing by Sue Thomas and Sofina Mirza-Reid)

© Thomson Reuters 2010 All rights reserved

via Mineweb.com – The world\’s premier mining and mining investment website Copper ends week on upnote as sentiment improves – FAST NEWS | Mineweb.

US jobs data drags copper to five month lows

Weaker-than-than-forecast US jobs data hurt investor confidence already rattled by worries of Chinese monetary slowdown

Author: Michael Taylor and Maytaal Angel (Reuters)
Posted:  Friday , 04 Jun 2010

LONDON (REUTERS) -

Copper hit a five-month low on Friday after weaker-than-forecast U.S. jobs data fractured confidence already dented this week by worries over Chinese monetary tightening and euro zone debt.

Zinc and tin hit 10-month and three-month lows, respectively, nickel hit its lowest in nearly 4 months, while lead and aluminium hit their lowest in almost a year.

Benchmark copper for three-month delivery CMCU3 on the London Metal Exchange traded at $6,350 a tonne at 1432 GMT from $6,525 on Thursday, having earlier hit $6,310, its lowest since Feb. 5.

U.S. nonfarm payrolls grew at their fastest pace in 10 years in May, buoyed by recruitment for the decennial census, but private hiring slowed sharply as businesses opted to increase hours rather than hire new workers.

“The U.S. has been the shining light recently in a base metals market that has been looking at macro concerns in Europe and China, and those concerns have formed a natural cap to prices,” said VM Group analyst Carl Firman.

“The U.S. and fundamental aspects in metals like declining stocks have formed a natural floor. Perhaps the floor itself will (now) be lower, the third quarter is quiet anyway because of the summer.”

U.S. stock markets, seen by some as a proxy for economic growth, tumbled more than 1 percent at the open on Friday following the jobs data, while the euro hit a more than four-year low versus the dollar. [.N] [USD/]

A weak euro makes metals costly for European investors.

Also knocking metals, data this week pointed to a slowdown in the pace of manufacturing activity in China, the world’s top metals consumer, as gradual monetary policy tightening took a toll on new orders.

“China’s economic growth has shifted into a lower gear following a very strong period in Q4-2009 and Q1-2010,” Standard Chartered said in a note. “We expect China to slow over the next six months, but not dramatically.”

FUNDAMENTALS IMPROVING

On the plus side, LME copper stocks, which indicate demand trends, fell 1,300 tonnes to 473,000 tonnes — their lowest level since late December — and have now fallen from six and a half year highs at 555,075 tonnes hit in mid February.

In other metals traded, aluminium CMAL3 fell to $1,920 versus $1,955, having earlier hit its lowest in almost a year at $1,904. LME stocks for the metal, used in transport and packaging, shed 9,075 tonnes to 4.53 million tonnes.

Zinc CMZN3 plunged to $1,675 a tonne from $1,740, having earlier hit its lowest since late July at $1,646, while tin CMSN3 dropped to $16,800 from $17,650, having earlier hit its lowest since late February at $16,680.

Steel-making ingredient nickel CMNI3 was at $18,316 from $18,700, having earlier hit a near four-month low of $18,050, while battery material lead CMPB3 dropped to $1,629 from $1,645, after earlier hitting a near one year low at $1,605.

On Thursday, lead cancelled warrants — material earmarked for delivery from warehouses — rose to 14,550 tonnes from 6,975 tonnes the day before. LME lead stocks however, remain at highs not seen since October 2002 at 191,925 tonnes.

“We have seen the cancelled warrants for lead increase over the past few days,” said Barclays capital analyst Gayle Berry. “It wouldn’t surprise me if we’re seeing a pick-up in demand ahead of the summer.”

via Mineweb.com – The world\’s premier mining and mining investment website US jobs data drags copper to five month lows – FAST NEWS | Mineweb.

Commodities drop on economic concerns

Oil and base metals fell more than 2% after disappointing US jobs data and warnings about Hungary

Author: Nick Trevethan (Reuters)
Posted:  Monday , 07 Jun 2010

SINGAPORE (REUTERS) -

Commodities fell on Monday, with oil and base metals shedding more than 2 percent after disappointing U.S. jobs data and warnings about Hungary’s economy re-ignited concern about demand growth and European debt.

The euro fell to a four-year low as investors fled to the greenback, shedding riskier equities and commodities and sending Japan’s Nikkei average down more than 4 percent to track declines of 3 percent for Wall Street on Friday.

Gold XAU= was steady in dollar terms and hit a fresh record in the single currency, but the strength in the dollar reduced bullion’s appeal as a safe haven.

U.S. crude for July CLc1 tumbled as much as $2 to $69.51, the lowest since May 26, and was down $1.52 at $69.99 by 0630 GMT, extending Friday’s drop of more than $3.

“There are lingering concerns about the European fiscal problems and also of course the weak U.S. jobs numbers on Friday also added to the gloom,” said Toby Hassall, chief commodities analyst at CWA Global Markets Pty Ltd in Sydney.

“In addition to that, the strengthening U.S. dollar is also adding pressure as well. It’s a multitude of negative influences out there that are currently pressuring oil prices.”

The U.S. dollar index .DXY rose more than 0.3 percent against a basket of currencies.

Hungary’s government sought to draw a line under “exaggerated” talk of a possible Greek-style debt crisis and said on Saturday it aimed to meet this year’s budget deficit target.

Despite attempts to calm markets, Hungary’s debt woes have rekindled fears that more Eastern European nations could reveal financial frailties.

U.S. jobs data on Friday showed nonfarm payrolls rose by about 431,000 jobs on a surge of temporary hirings for the U.S. Census, but private employment, which measures the labour market’s strength, rose 41,000, a number that analysts said was disappointing.

Spot gold XAU= ticked down 0.1 percent to $1,216.25 an ounce from New York’s notional close on Friday, when the metal hit its weakest since May 25 around $1,196.

Dealers shrugged off the first decline in holdings on the SPDR Gold Trust in a month and a half, saying mounting worries about the euro zone’s debt problems meant there was no change in bullion’s safe-haven appeal.

Gold priced in euros XAUEUR=R struck a record around 1,022 euro after the single currency plunged.

“There is speculation that the European debt crisis has spread from western Europe to eastern Europe,” said Wong Eng Soon, investment analyst at Phillip Futures in Singapore.

“Fears will definitely cause people to be more optimistic on gold. It’s very clear that U.S. dollar and gold are the preferred safe-haven holdings.”

Base metals also sank. Shanghai futures plunged by their 5 percent daily limit in their attempt to catch slides of almost 7 in London copper futures to near eight month lows and 9 percent in zinc over the past two days.

“The overall picture is one where markets have become much less confident about the international economic recovery because of developments in Europe and the data in the U.S.,” said David Moore, commodity strategist at Commonwealth Bank of Australia.

Three-month copper on the London Metal Exchange CMCU3 fell as low as $6,076.25 a tonne, its weakest since Oct. 13, 2009. By 0630 GMT, it was at $6,122.25, down $157.75.

Technical charts point to further weakness for LME copper which could soon breach $5,814, a level last seen in early October 2009, said Reuters market analyst Wang Tao. [TECH/C-MET]

U.S. corn and soybeans futures fell ahead of a key U.S. crop report that is expected to show good weather is aiding crops in the U.S. Midwest, boosting prospects of bumper harvests. [GRA/]

The falls added to Friday’s losses of more than two percent when signs of falling export demand for U.S. corn and soybeans added to the weak macroeconomic picture. (Editing by Michael Urquhart)

via Mineweb.com – The world\’s premier mining and mining investment website Commodities drop on economic concerns – FAST NEWS | Mineweb.

(Adds Freeport’s closing share price in seventh paragraph.)

By Matt Craze and Millie Munshi

June 3 (Bloomberg) — Freeport-McMoran Copper & Gold Inc. and Codelco, the world’s two largest copper producers, said China’s plans to curb its economy threaten to reduce demand for the metal after prices slumped 15 percent in two months.

The copper market will be “volatile” for as much as another year after China took measures to cool its property market, Codelco Chief Executive Officer Diego Hernandez said yesterday in an interview at Bloomberg headquarters in New York. The Asian nation is a “risk to the world’s market place in the near term,” Freeport CEO Richard Adkerson said in an interview.

Chinese policy makers are trimming stimulus measures this year after a $1.4 trillion lending binge revived growth in 2009. Officials are targeting a 22 percent reduction in new loans and have sold bills and raised banks’ reserve requirements to suck money out of the financial system. Copper has slumped from a 20- month high in April on concerns about global economic growth.

“In the short term, we are subject to the volatility of the world economy,” said Hernandez, a former head of BHP Billiton Ltd.’s base metals business who became chief executive of state-owned Codelco, based in Santiago, last month. Emerging market demand “could slow down for a while,” he said.

Equity and commodities have slumped on speculation that Europe’s debt crisis will spread, hurting global economic growth. The Reuters/Jefferies CRB Index of 19 raw materials dropped 8.2 percent last month, the most since November 2008.

Biggest User

“China is the biggest user, so any concerns about demand there will continue to be a drag on copper,” Donald Selkin, the chief market strategist at National Securities Corp. in New York, said today in a telephone interview.

Freeport fell 4.1 percent to $66.17 in New York composite trading. Before today, the shares dropped 14 percent this year.

Copper futures for July delivery fell 9.4 cents, or 3.1 percent, to $2.9465 a pound on the Comex in New York, the biggest drop for a most-active contract since May 25. Earlier, the metal touched $2.9255, the lowest price since May 20.

Reports June 1 showed the rate of manufacturing gains slowed in China and the U.S., the world’s biggest copper users. European factory-output growth slowed more than previously estimated last month, figures showed yesterday. Copper prices in New York dropped 7.4 percent in May, the most since January.

“China is cooling from very strong levels, the European recovery threatens to stall, and the U.S. is leveling out,” said David Thurtell, an analyst at Citigroup Inc. in London.

Limit Inflation

China is seeking to limit inflation to about 3 percent this year and said May 13 it will crack down on price speculation and hoarding in some food commodities to reach the target. Consumer prices jumped 2.8 percent in April from a year earlier, the fastest pace in 18 months.

“It’s positive” that China’s government is working to minimize inflation, Adkerson told Bloomberg Television today in an interview. “It will likely lead to a more sustainable situation going forward.”

Still, both companies are investing in expansion plans in expectation of rising future demand in China and other emerging economies. Combined, they account for about a fifth of global output of copper, which is used in plumbing and wiring.

Codelco will invest $15 billion over the next five years to revamp production at its aging mines, Hernandez said. Production will rise to over 2 million tons a year from about 1.7 million tons through the increased spending, he said.

$100 Million

Freeport, based in Phoenix, will spend $100 million this year to explore for copper and gold after cutting back on investments in 2009 amid concern over the world economy, Adkerson said in April.

China, India and other emerging economies need copper “for their growth, urbanization, programs that they have and I don’t see how that could stop,” Hernandez said.

via Freeport, Codelco See Copper Market Risk From China (Update4) – BusinessWeek.

David and Goliath to undertake deep copper quest in Queensland

Breakaway Resources and BHP Billiton are to undertake a deep drilling programme on Breakaway’s Altia zinc-lead-silver discovery in north west Queensland.

Author: Ross Louthean
Posted:  Wednesday , 02 Jun 2010

PERTH -

There will be a 5,000 metre diamond drilling programme to start the joint venture between Breakaway Resources Ltd (ASX: BRW) and BHP and that will involve a first hole going to about 1,000m to start a probe for what the junior company believes is a “potential world-class silver-lead-zinc deposit.

A minimum exploration expenditure of A$1 million (US$0.8 million) was expected to be spent by November.

BHP was committing to spending A$10 million on the Altia project in the Cloncurry region.

Breakaway delineated an initial JORC Code compliant inferred resource for Altia in 2008 of 5.78 million tonnes grading 40.3 grams/tonne silver, 3.96% lead and 0.49% zinc.

Breakaway’s managing director, David Hutton, said the deposit has currently been drilled over a 500m strike length and to a nominal depth of 300m, and remains open primarily down-dip and to the south.

He said Breakaway secured the “landmark farm-in and joint venture with BHP Billiton last November.

The focus of planned exploration is based on strong geological similarities between Altia mineralisation and the world-scale Cannington silver-lead-zinc mine – owned by BHP — 100 km to the south along the same geological corridor.

Hutton said previous drilling by Breakaway highlighted the potential for a large-scale silver deposit at Altia with strengthening silver grades – including a down-hole intersection of 19m @ 286 g/t silver – occurring at depth and to the south.

In addition to extensions of the known Altia mineralisation, drilling will test the steeply-dipping Dingo trend, immediately east of Altia.

Hutton said the alliance was an “an exciting opportunity to leverage the financial and technical resources which a partner such as BHP Billiton brings to conduct the first definitive test of the potential of the Altia system to host a world-class mineral system.“

“The joint venture was concluded after a rigorous and extensive process of due diligence and technical review which confirmed the high prospectivity of this project to host a world-scale Cannington-style deposit,” he said.

The joint venture covers 8 square km while on the broader potential surrounding the Eloise copper mine Breakaway retains the copper-gold rights and also mineral rights over a surrounding 400 sq km.

Under the Farm-in and Joint Venture Agreement, BHP Billiton can earn a 70% interest in the silver-lead-zinc rights at Altia by completing expenditure of A$10 million over five years. BHP Billiton must spend a minimum of A$1 million within the first year of the Joint Venture.

On BHP Billiton reaching its 70% interest, Breakaway’s 30% interest may be sold to BHP Billiton. If Breakaway elects not to sell its interest, it must contribute on a pro rata basis to the cost of ongoing exploration and a Bankable Feasibility Study. BHP Billiton retains a right to purchase Breakaway’s 30% interest following completion of a Bankable Feasibility Study and before a decision to mine is taken.

The Farm-in and Joint Venture agreement is consistent with Breakaway’s previously announced strategy of rationalising its extensive Australian minerals portfolio to enable it to focus on its core nickel sulphide exploration projects in the Leinster District of Western Australia, where drilling is continuing at the Wildara and Sinclair Projects.

via Mineweb.com – The world\’s premier mining and mining investment website David and Goliath to undertake deep copper quest in Queensland – EXPLORATION | Mineweb.

After several years of talking about curtailing excess capacity, it would appear the Chinese authorities are finally getting serious about it. The Ministry of Industry and Information Technology said on Thursday of last week.

China has said it will close a total of 300,000 tons of copper smelting capacity, 600,000 tons of lead and zinc capacity, 800,000 tons of aluminum capacity and millions of tons of steel capacity under a three-year plan intended to reduce overcapacity and cut down pollution. China has pledged to cut the amount of carbon dioxide produced from each unit of economic growth by 40-45% by 2020, compared with the 2005 level. Closing old excess capacity serves that purpose at the same time as bringing capacity in line with demand for many metals. This year, Beijing’s target is to shut down outdated capacity of 339,000 tons of aluminum, 117,000 tons of copper smelting, 113,000 tons of zinc and 243,000 tons of lead, according to a Reuters report in ChinaMining.

For some metals the numbers are significant. Although 339,000 tons of aluminum doesn’t make much of a dent on an estimated 20m tons of capacity it could reduce what is clearly a state of over production at the moment. Of more profound impact could be lead. A reduction of 243,000 tons of capacity from a market that globally is in surplus by just 168,000 tons per year according to the ILZSG quoted in Reuters would have a significant impact on China’s demands on global supplies.

The devil will be in the detail however as many issues in the report remain opaque. A Reuters report states Chalco (Aluminum Corp of China) has asked Beijing for approval to add 250,000 tons of primary capacity at its Pingguo plant in Guangxi currently producing 140,000 tons. Whether the authorities will give their approval is uncertain however as it flies in the face of recent announcements that no new capacity is to be added for three years. Smelters have however been given permission to buy power directly from generators to cut costs and there are rumors that semi’s producers could see VAT rebates increased on exports increased to the full 17%, which would be consistent with the authorities attempts to support value add production but suppress further investment in primary production across a range of metals products.

It would appear the authorities have been buying metals for stock again, as a continuation of last year’s dramatic intervention by the State Reserves Bureau. A spokesman for the state owned research group Antaike said the three year reserve plan was to buy one million tons of aluminum, 400,000 tons of copper and 400,000 tons of lead and zinc from domestic smelters. Apparently the State Reserves Bureau has already bought 590,000 tons of aluminum and 159,000 tons of zinc since December. At least some of China’s vociferous appetite for metals is not going into consumption but into state stocks. Unlike speculative trade stocks there is no danger these will come back out into the market if prices turn or demand falters but it does mislead superficial impressions of continued high consumption rates – real consumption is clearly not quite as strong as it appears.

No wonder the authorities are keen to cut excess capacity and drive some consolidation into what has been a fragmented and undisciplined domestic market before cooling growth rates meet yet higher levels of over capacity and results in a general price collapse.

via Is China Finally Getting to Grips with Over Capacity in the Metal Sector?.

Mining stocks are likely to trade sideways over the coming months, albeit in a “wide and volatile range”, says RBC Capital Markets Equity Research, as fundamentals catch up to asset prices, or asset prices fall to meet the fundamentals.

This is because, in RBCCM’s view, the current correction being seen in commodity prices is consistent with what they call the “second phase” of the mining share cycle.

It says, “The early cycle move that began in December 2008 resulted in an approximately 380% increase in North American non-precious metal mining share prices. The rally was driven by improvements in liquidity and the resulting balance sheet relief, the turn in global economic leading indicators, weakness in the U.S. dollar, commodity purchases by China, the resulting draw-down in exchange inventories and the increase in commodity prices.”

But, the group says, this optimism toward mining asset prices which is generated by the turn in leading indicators and the resumption in economic and commodity demand growth has, historically, not been sustainable.

As economic growth slows so this optimism is overrun by the reality of lagging fundamentals and shares give up some or all of their gains and move into a broad sideways trading range until industry fundamentals catch up.

The group says, “As in past cycles, the industry is, to varying degrees, currently suffering from significant excess capacity and excess inventories, and history shows that the excesses must be eliminated before a sustained, strong move in commodity prices can occur.

It adds, “This will require a return to sustained, strong global commodity demand growth. Whether the second phase of the cycle will turn out to be a brief period of consolidation (copper?), a significant correction (nickel?), a long period of stagnant prices (aluminium?) or some combination of all three will largely depend on the strength of commodity demand and the underlying levels of capacity utilization and excess inventories.”

What happens now?

According to RBCCM, leading indicators point to the possibility of slowing global demand growth over the next 6 to 12 months

But adds that longer-term fundamental value is emerging in the current correction and shares “are currently trading at an average discount of 27% to NAV at forward curve prices.”

It says, it does not expect the shares to revisit the 2008 lows. On that basis, average valuations should be well supported in the current range of a 20% – 30% discount to NAV at forward curve prices.

But, it adds, “shares could fall further if commodity prices continue to decline. In the bottom half of the mining share cycle, when significant excess capacity and inventories exist, the shares tend to trade at a discount to NAV, with upside generally capped at NAV.

via Mineweb.com – The worlds premier mining and mining investment website Mining stocks enter second phase of the mining share cycle – MINING FINANCE / INVESTMENT Mineweb.

H. Fraser Phillips has been picking mining and metals stocks for 23 years, and last year he struck gold for the RBC Capital Markets clients who followed his advice.

He topped other mining and metals analysts in this year’s Best on the Street survey by a wide margin, fueled by a big bet on Teck Resources Ltd., a highly leveraged Canadian miner that had nearly sunk itself when it bought a coal company called Fording Canadian Coal Trust in 2008 just as coal prices were about to plunge.

Mr. Phillips, 49 years old, says he saw potential at Teck Resources. The mining industry was writing the company’s obituary because Teck “essentially bought the [Fording] business at $300-a-ton coal.” Then the price of coal, along with those of most other commodities, plummeted toward the end of 2008 when the world economy went into recession.

Mr. Phillips didn’t think the Canadian government would let Teck Resources fail, given that so many key Canadian mining companies had already gone by the wayside in recent years, including nickel producer Inco Ltd. and aluminum maker Alcan Inc., both bought by foreign companies.

“A lot of people thought that Teck would disappear, but we thought the Canadian banks would not let the thing fail and would be as supportive as possible,” he says. “Politically, it was not palatable to let another Canadian miner disappear.” Mr. Phillips, who works out of the Toronto office of RBC Capital Markets, an RBC Financial Group unit, says that being in Canada helped him see those political pressures more clearly than some other analysts based elsewhere.

Mr. Phillips advised clients to buy Teck Resources throughout most of 2009, moving the shares to a hold at the beginning of December. Those who followed his advice during the period of his buy call notched a return of 634%.

In general, he says, less-diversified miners—producing just one or two commodities—were the big winners in 2009 as commodity prices recovered. Case in point: He also scored well with a yearlong buy rating on uranium miner Cameco Corp. Its shares returned 88%.

Mr. Phillips does have one criticism of his performance in 2009: “I think I was too conservative.” By his calculations, the group of mining and metals stocks he followed gained a combined 360% for the year, a return he didn’t fully capture.

“We never expected the price returns we saw in copper,” he says.

China’s demand for copper and coal boosted commodity companies such as Freeport-McMoRan Copper & Gold Inc. and smaller miner and molybdenum producer Thompson Creek Metals Co. Mr. Phillips had a hold on both those companies through the year, and the stocks soared.

Looking ahead, he says demand for metals and minerals remains solid in China and is starting to recover in Europe and the U.S. The difference this year, Mr. Phillips says, is that he thinks the integrated miners—those that sell a variety of commodities, such as BHP Billiton, Rio Tinto PLC and Cia. Vale do Rio Doce—will be the big gainers, because their diversification will protect them against greater volatility in commodity prices.

“We are still very positive,” he says. “The integrated guys will have a decent run.”

via Best on the Street Stock Analysts: Mining.