By Leia Michele Toovey- Exclusive to Copper Investing News

Copper eased on Thursday as concerns of lack of demand overshadowed Wednesday’s dollar fuelled gains.

The benchmark August copper on the Multi Commodity Exchange of India was down 0.79 per cent at Rs 331.65  per kg. Copper for delivery in three months on the London Metal Exchange fell to US$7,585 per tonne in official rings from a last quote of $7,650/7,655 on Wednesday.

About 6,000 tonnes of refined copper has arrived in Shanghai, while inventories in LME warehouses rose 2,200 tonnes to 170,050, the highest level since February 5. Traders in Shanghai said they had seen new material coming into the physical market, dragging down spot prices, and there was talk of “tens of thousands” of tonnes of copper arriving in Shanghai. Despite this, Shanghai stocks are still low, at 21,796 tonnes, or about two days of Chinese daily consumption. Copper stocks tend to increase in August, but following the end of the Olympic Games, the market is anticipating a bounce in demand.

Copper for September delivery ended up 3.30 cents at US$3.4715 a lb on the New York Mercantile Exchange’s COMEX division, as a softer US currency raised the appeal of dollar-priced metals for other currency holders. The dollar slipped as investors bet the US currency’s recent jump to 2008 highs against a basket of currencies was too far and too fast.

In other news…

Chilean copper miner Antofagasta posted a 15 per cent increase in profits for the first half. A 14 per cent increase in the price of its core commodity (copper) so far this year, as well as a jump in production enhanced profits. Pre-tax profits for the six months to the end of June were US$1.66 billion, up from US$1.45 billion for the previous year on year period. Copper output grew 10.1 per cent to 233,600 tonnes in the first half compared to the same period last year. Antofagasta has also benefited from the rising price of molybdenum, a metal the miner extracts as a by product of copper. Compared with the first half of last year, molybdenum’s average market price in this year’s first six months increased by almost 17 percent. Antofagasta is in the process of expanding their operations to outside of Chile. Shares in the company rose 22p to 592p, on the news.

Petaquilla Copper Ltd. (TSX: PTC) has accepted a revised US$330-million takeover offer from Inmet Mining Corp. (TSX: IMN). The revised offer is for US$2.20 per common shares, a 10 per cent premium on Inmet’s previous offer of US$2.00 per share. The takeover will enable Inmet to move forward with the development of a major copper project in Panama, a project that is of extreme value to Inmet as it represents the only development-stage project in the company’s arsenal. Petaquilla declined Inmet’s first offer of US$2.00 per common share stating that it undervalued the company, even though it represented a 108 per cent premium on Petaquilla stock value at the time. Stock in Petaquilla jumped almost 16 per cent, or 30 cents, to US$2.19 on a volume of almost four million shares on the news, while Inmet was off 75 cents, at US$61. Shares in Teck Cominco Ltd. (TSX: TCK), which has a side interest in the Petaquilla Copper project in Panama, were up 11 cents at US$41.57.

Teck and Petaquilla spent a good part of the first half arguing about who owned what stake of the project, with Petaquilla claiming to own 52 per cent of the development as Teck failed to meet their shareholder obligations. Teck won the dispute, and claimed a 26 per cent stake after delivering its final commitment to participate in the mine last March. During the dispute, Inmet sided with Teck. Petaquilla used the conflict with Teck as reason to decline Inmet’s first offer, stating that winning an arbitration battle against Teck could result in its ownership of the project rising to 52 per cent – a fact that Inmet hadn’t factored in to its earlier offer. Inmet has claimed that by taking primary ownership in the project would enable efficient development of the project. It has the resources and experience to pool for project development, whereas Petaquilla is a considerably smaller company with less experience.

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