Investors size up Australian copper mines amid weakness

Fri Oct 2, 2015 4:21am EDT
 
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By James Regan

SYDNEY Oct 2 (Reuters) - Australian copper miners sitting on undeveloped deposits are catching the eyes of investors looking beyond the downward trajectory in metals markets, with private investment giant KKR & Co LP the latest to take a position.

"Private investors are assessing the longer term value while the market sits at the bottom," said Fat Prophets mining analyst David Lennox

Copper prices have deteriorated in response to declining economic growth in China, the world's top consumer.

London Metal Exchange copper ended the third quarter down 10.5 percent, the weakest quarterly performance in more than two years.

Shares in Australian copper companies have declined in step, despite copper in Australian dollars remaining relatively flat at around A$3.30 a pound

"It's a bit skewed, suggesting the company's are being undervalued by the market," said Lennox.

Researchers at Capital Economics expect Australia to outperform other commodities-heavy countries such as Canada, Brazil and Norway.

"Australia's labour market will probably remain stronger than those elsewhere, its fiscal situation is not as bad and its services sector is well placed to take advantage of the weakening in the Australian dollar," it said.   Continued...