UBS: Vale, Xstrata to Study Acquisitions in Australia

The world's biggest iron-ore producer Cia. Vale do Rio Doce, Xstrata Plc and worldwide competitors will study acquisitions in Australia due to record metal prices, said UBS AG. ``We've already had three deals in Australia this year,'' Glyn Lawcock, head of resources research for UBS in Sydney, said at an industry luncheon in Melbourne, adding he is quite positive and M&A support will continue. Mergers and acquisitions in Mining companies may rise to ``astronomical levels'' this year, according to PricewaterhouseCoopers LLP, as soaring capital costs and wages make it easier for buying rivals than to develop their own projects. ``We will continue to see large players like CVRD, Xstrata come into the Australian markets seeking for assets,'' Lawcock said. ``It is cheaper to buy assets than to go and find them by ourselves and develop them, and this will continue to support the sector.'' Xstrata this year bought Australian nickel company Jubilee Mines NL for $2.9 billion and Vale's Chief Executive Officer Roger Agnelli noted he's looking for new copper and coal assets after Xstrata turned down his takeover proposal last month. Axed power supply in Chile, China and South Africa will cut output and help to boost prices for copper, aluminum and platinum this year, said Lawcock. Mining acquisitions in Australia this year include Oxiana Ltd.'s agreed stock offer for Melbourne-based rival Zinifex Ltd. and Lihir Gold Ltd.'s agreed stock offer for Equigold NL. COPYRIGHT All rights reserved. The copying, republication or redistribution of WAM News Content, including by framing or similar means, is expressly prohibited without the prior written consent of WAM.