BlackRock Buys More BHP, Rio Shares in Bet on Rebound (Update1)

Sept. 24 (Bloomberg) -- BlackRock Inc., manager of $1.37 trillion in assets, bought more shares of BHP Billiton Ltd. and other diversified mining companies in a bet that economic recovery will boost prices of commodities. BlackRock also increased holdings in Rio Tinto Group and Vale SA “in recent weeks,” Catherine Raw, a fund manager in London, said by phone. The S&P GSCI Index of 24 raw materials has climbed 29 percent this year on speculation global economies will recover and consumption gains in China will spread to other countries. “Commodities are set to make further progress as investors become more confident that the majority of the world economic crisis has passed,” Raw said today in an e-mailed statement. “We are overweight in bulk commodities, copper and platinum where supply-side constraints, coupled with a demand recovery, could likely lead to market tightness and elevated prices.” BHP, Rio and Vale were already the largest holdings of BlackRock’s $9.9 billion World Mining Fund as of Aug. 31, according to a company document. The fund has climbed 82 percent this year, Bloomberg data show. Copper has almost doubled this year on increased imports from China, the world’s largest buyer of the metal used in pipes and wiring. Platinum, used in automotive pollution-control gear, has added 42 percent. BHP is the world’s biggest mining company, Rio ranks third, and Vale is the largest iron-ore producer. “We expect China to continue to have a significant influence over demand for commodities,” Raw said. “We are now starting to see some signs of restocking in the U.S. and Europe. Should these trends gather momentum for the rest of the year, it looks as though we might start to see normalized demand levels for commodities in 2010.”