Mitsui buys into CVRD

The biggest global mining story of the report period was the complex deal involving Brazilian iron ore giant Cia Vale do Rio Doce‘s (CVRD) and Japan’s no. 2 trading house, Mitsui.

Mitsui winds up spending a net US$400 million for a 15% interest in Valepar, a holding company that controls CVRD. The largest shareholder of Valepar, Brazil’s largest pension fund, Previ, has an option to sell a 5% stake in Valepar to Mitsui within the next 120 days. CVRD was one of the few base metals miners in the black over the period, rising 4 to US$27.66.

WMC Resources dropped 48 to US$9.72 as it ruled out a major, one-time expansion of its flagship Mt. Keith nickel mine in Western Australia, and instead pushed forward a plan to carry out incremental upgrades.

The rest of the sector suffered from sagging metal prices: Anglo American slipped 43 to US$14.50; BHP Billiton retreated 17 to US$11.09; Rio Tinto slumped 1.90 to US$78; Phelps Dodge fell $1.20 to reach US$32.73 and Alcoa dropped $1.92 to US$19.41.

The U.S.-listed gold majors were uniformly up on the week: Newmont Mining jumped 88 to US$25.88; AngloGold rose 9 to US$29.49; Gold Fields added 41 to reach US$10.35; Durban Deep advanced 21 to US$2.58; Harmony Gold shot up 51 to close at US$12.01; Royal Gold tacked on 33 to hit US$13.90; Freeport-McMoRan Copper & Gold moved ahead 23 to US$17.04 and Ashanti Goldfields was up 29 to US$5.53.

The silver miners rode gold’s coattails: Coeur d’Alene eased up 8 to US$1.37 and Hecla Mining advanced 13 to US$3.11.

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