Jiangxi Copper Co., China’s biggest producer of the metal, posted a 158 percent increase in second- half profit because of rising copper demand and higher prices.

Net income rose to 2.79 billion yuan ($425 million) in the six months ended Dec. 31 from 1.11 billion yuan a year earlier. The result was derived by deducting the six-month figures from full-year profit released today on the Shanghai stock exchange, based on international accounting standards.

Chinese copper demand will gain 7 percent this year as the nation builds more homes, autos and upgrades power-grid networks, Chairman Li Yihuang said in March. Copper touched a record $10,190 a ton in February after surging 30 percent last year.

Shares in the company fell 2.3 percent to close at 39.55 yuan in Shanghai today, before the announcement. The stock was unchanged at HK$24.65 in Hong Kong.

Full-year net income more than doubled to 4.91 billion yuan in 2010 by Chinese accounting standards, Jiangxi Copper said. Net was 4.99 billion yuan by international standards, beating the 4.7 billion yuan mean estimate of 11 analysts surveyed by Bloomberg. Sales rose 48 percent to 76.4 billion yuan.

The company plans to boost copper smelting production capacity to 1 million metric tons this year, from 900,000 tons last year, Li said in March.

China’s overseas mining deals fell to $4.5 billion last year because of increased rivalry from India and Brazil, Ernst & Young LLP said.

The drop from a record $10 billion of deals in 2009 reflects “tougher” competition for Chinese investment, Eleanor Wu, an Ernst & Young partner on transaction advisory services, told reporters today in Beijing, after releasing a report on China’s mining acquisitions for 2010.

India surpassed China for the first time in 2010 with $4.6 billion overseas deals, mainly in coking coal, the report said. China’s deals included Jinchuan Group Ltd.’s $878 million takeover of South African platinum explorer Wesizwe Platinum Ltd., and China Railway Construction Corp. group’s C$679 million ($696 million) purchase of Canada’s Corriente Resources Inc.

“We expect sustained and moderate growth this year in Chinese outbound deals because of the imbalance of supply, shortage of resources and the country’s economic growth,” Wu said, without giving a forecast.

Global mining and energy deals are poised for the biggest first quarter since 2008, according to data compiled by Bloomberg. Global mining deals rose 89 percent to $113.7 billion in 2010, according to the Ernst & Young report.

Chinese investors shifted focus from Australia and Canada to higher-risk destinations including Brazil, Ecuador and Africa, targeting exploration companies, Paul Murphy, head of Asia Pacific Mining & Metals at Ernst & Young, said today.

Mining deals in China, including outbound and inbound, dropped 20 percent last year from a year earlier, the report said. Domestic deals surged 89 percent to $8 billion, driven by state-led restructuring in coal and steel sectors, it said.

SWISS bank UBS has upgraded its one-month forecast for silver from $US25.50 an ounce to $US35/oz.

Duh, as we would say — if we weren’t more refined.

The white metal hit a 31-year record on Friday, reaching $US32.66/oz during the day. This surge is all the more impressive because the previous record in 1979 was due to the Hunt Brothers’ infamous attempt to corner the silver market. This time it’s investment demand.

Silver, along with tin (of which more below) has long been a Pure Speculation hobbyhorse. Now they have begun to run.

Even so, the pure silver stocks have a patchy record. Over the past 52 weeks, Cobar Consolidated Resources (CCU) is one of the better performers, moving from 13c last June to touching 92c on Friday. The big excitement last week came from Silver Mines (SVL), which announced a potential upside of 57 million ounces of silver at its Webbs project in NSW. The stock, 6.3c just 11 months ago, reached 36c. Argent Minerals (ARD) has shed its gold project to become a pure silver play and has 31.6 million ounces of silver at Kempfield, NSW, but has not exactly caught on fire.

It’s been a choppy 52 weeks: a high of 25c in September and a close on Friday at 22.5c.

Alycone Resources (AYN), despite raising $16.7m and having enough money to develop the mine, remains at a lowly 4.9c. Perhaps that is due to the history of the Texas project in Queensland — it has been such a long and, at one stage, debilitating grind.

There is a soaring demand for silver coins. In January, the US Mint sold 6.4 million ounces of American Eagle silver coins, up 78 per cent from January last year.

For the smaller retail investor, it represents cheaper security than gold. Given the Middle East situation, plus the debasement of paper money, such prudence seems warranted.

Among the other plays:

Cerro Resources (CJO) has 202 million ounces of the stuff at the Cerro del Gallo project in Mexico (along with gold and copper) and has acquired the Namiquipa silver-zinc-lead deposit. It looks like a market run has begun.

Cortona Resources (CRC) recently reported a shallow high-grade discovery 500m from its planned Dargues Reef goldmine with an intersection of 1m at 687 grams/tonne of silver.

Metals X (MLX) is now producing, as a by-product, copper concentrate at the Renison tin mine in Tasmania, with the process also having a silver credit. This has the potential to produce up to 100,000oz of silver a year.

White Rock Minerals (WRM) has 10.5m ounces of silver in northern NSW — and is looking for more. And the on-again, off-again Conrad silver-tin project in northern NSW is now on again with Malachite Resources (MAR) saying that, while it is still highly excited by its recent Lorena gold acquisition, the rise of silver and tin moving over $US32,500 a tonne are together making the economics of Conrad look pretty good. MAR went for gold after a Conrad financing deal evaporated, so it was a sensible move.

But the price surges have apparently prompted a decision to drill the Princess Shoot at Conrad, which comes nearly to the surface.

Conrad was mined twice before, most recently until the 1950s, but the Princess Shoot was hardly touched by the old miners.

Conrad is still considered MAR’s flagship and the potential company-maker, with a resource standing at 9.5m ounces of silver. Apart from silver and tin, there are also copper, lead, zinc and indium.

Oh, yes, we nearly forgot: the world’s biggest silver producer is Cannington in Queensland, owned by BHP Billiton (BHP).

Time for tin

TIN a precious metal? No, we haven’t been at the cooking sherry again. That’s the view at BNP Paribas. Well, their exact words were that with the metal moving over $US32,000 a tonne or $US1 an ounce it had “become, in effect, a precious metal”.

BNP is predicting a deficit this year and probably in 2012. Japan’s imports of refined tin rose by 60 per cent last year and Indonesia’s largest producer, PT Timah, saw decreased output last year. On the other hand, there is talk of three big Congolese mines reopening.

And no one knows how much the Chinese are stockpiling.

Recent news includes Consolidated Tin Mines (CSD) confirming additional mineralisation at the Windermere project near Cairns while Havilah Resources (HAV) will move to 85 per cent of the Prospect Hill tin project in South Australia, almost due west of Broken Hill. And if Central West Gold (CWG) could get its act together, it might be considered a serious tin player. First, they could update the website (last news posting: 2009) and, second, get cracking at the Ottery tin mine, once the leading hard-rock tin producer in New England and potentially high grade.

But CWG plans to spend just $25,000 on exploration in the current quarter. Have they looked at the tin price lately?

Israeli comments led to dollar weakness and gold, silver and oil rallying yesterday. The Israeli government described the Iranian warships move into the Suez canal as a “provocation” and hinted at a possible response.

An example, if one was needed, about how precarious the geopolitical situation in the Middle East is and how markets continue to underestimate the risk of military conflict.

Besides the very strong fundamentals, gold is looking better and better technically. After a four month period of correction and consolidation gold remains below levels seen last October (see chart below).

Gold in USD – 10 Day (Tick)

Gold bounced off support seen at the 150-day moving average and is now above the 100-day moving average. It is only 3.5% below the nominal record high of $1,423.75/oz seen in early December 2010.

Gold in USD – 1 Year (Daily) and 150 Day Moving Average

Even more important is the significant increase in demand seen in India, China and globally as people buy gold to protect themselves from macroeconomic risk and deepening inflation.

The World Gold Council reports that the increase in investment demand is a “global phenomenon,” reporting a 19% year-on-year rise across the world in its most recent report this morning.

In China alone, gold investment demand jumped 70% last year as Chinese people bought gold as a store of value. Demand is projected to grow a further 40% to 50% this year and jewelry demand will expand by 8% to 10% this year.

Gold imports by India, the largest buyer of gold in the world, climbed to a record of 918 metric tonnes in 2010, driven by a surge in jewelry demand with Indians continuing to buy jewelry as a store of value.

Reuters quoted a leading Chinese executive from Industrial and Commercial Bank of China (ICBC), the world’s largest bank by market value, as saying that demand for gold was growing at a voracious pace due to surging inflation.

Zhou said that the huge increase in Chinese demand seen last year would happen again in 2011 due to a “choppy stock market” and concerns about how rising interest rates will affect property markets.

Perhaps most importantly and rarely mentioned in the western media is the fact that the Chinese government is encouraging their citizens to buy physical gold and silver bullion having banned gold ownership from 1950 to 2003 (see video).

“Unlike the property market, investment in the gold sector is something the government is encouraging,” Zhou said.

Zhou said there was also voracious demand for silver, with ICBC bank alone selling about 13 tonnes of physical silver in January alone, compared with 33 tonnes in the whole of 2010. Were that demand to continue then demand for silver from ICBC alone could be as high as 156 tonnes this year. This would be a 370% increase on 2010.

Given the degree of demand for silver in China and internationally the forecast that silver could reach $36 an ounce this year, by Bloomberg analysts, is looking very conservative.

Those continuing to call gold and silver “bubbles” continue to ignore the facts and the many, many extremely important developments in the gold and silver bullion markets.

Gold

Gold is trading at $1,377.75/oz, €1,017.01/oz and £854.68/oz

Silver

Silver is trading at $30.59/oz, €22.58/oz and £18.98/oz.

Platinum Group Metals

Platinum is trading at $1,825.50/oz, palladium at $835.00/oz and rhodium at $2,400/oz.

Landlords in Lincolnshire whose properties are empty are being warned they could be targeted by copper thieves.

Lincolnshire Police has urged property owners to invest in extra security.

The warning comes following an increase in thefts of boilers and pipes from empty properties and those under renovation.

Unoccupied houses in Swift Gardens and Browning Drive in Lincoln have recently been targeted, police said.

Residents living near empty properties are also being asked to be vigilant and to report suspicious activity to Lincolnshire Police.

Investors of precious metal funds in Canada will immediately recognize the proverbial 800 pound giant in the room, when reading about the Sentry Precious Metals Growth Fund. Last year, the fund managed a 79 percent return, and in the process picked up some hardware at the annual Lipper Fund Awards. Sentry Precious Metals Growth, which posted an average annual return of 22 percent over three years, earned the award in the precious metals category, and has the best return of all categories for that period, also winning awards for both the one and five year periods.

In an interview with Gold Investing News, Mina Rizk, Product Manager and Analyst for Sentry Investments was pleased with the awards and the impact that it has represented for marketing opportunities, “The Fund continues to attract assets based on its strong and consistent track record. Including the 2011 awards, the Fund has now captured seven Lipper Awards over the past five years.”

Sentry has been establishing quite a strong name for itself in the Canadian investment management universe, with the entire firm’s suite of assets under management totaling 80 percent growth on the year. The growth total is a product of the weighted average performance across all mandates in addition to the net sales of the funds. The second highest total for firms with more than a billion dollars of assets was Dynamic Funds, which posted a 33 percent gain.

Portfolio management commentary

Portfolio Manager, Kevin MacLean has indicated that he has been able to reduce risk or volatility in his fund because it is focused on smaller companies, which can add to existing reserves and resources, as opposed to large gold producers, whose share price returns are more dependent upon an appreciating gold price that is often relatively volatile.

“When the gold price goes down, the senior shares go down and stay down until the gold price goes up again,” MacLean said. “The shares of smaller companies can go down initially, but they will come back fast because they are creating wealth by finding it in the ground.” In a sense, these companies are growing the underlying asset base ‘organically’.

While the price of gold had been falling last month after last year’s strong surge, he suggested “The U.S. recovery is almost driven by printing money,” he said. “The United States has decided to devalue their currency rather than tighten their belts, so that is bullish for gold.” This is also underscored by escalated geopolitical concerns in the Mideast as well as supporting data from slightly higher U.S. inflation for the month of January.

Critical investment features

The fund comes at a slightly higher price point, featuring a Management Expense Ratio (MER) of 2.6 percent of net assets. The MER is a measure of what it costs an investment company to operate the fund and consists of a management fee, record-keeping, custodial services, taxes, legal expenses, and accounting and auditing costs divided by the average dollar value of its assets under management. Operating expenses are taken out of a fund’s assets and lower the return to a fund’s investors. As a category benchmark the median MER for the precious metal category is 2.3 percent.

The total assets of the fund are approximately $730 million, which permits the manager to invest in exploration, junior mining and senior production of precious metals. This provides investors with exposure to international enterprises with the broadest range of market capitalization.

The competitive nature and industry compliance requires that the fund disclose financial details quarterly, and the most recent sector allocation indicates about 56 percent is invested in junior mine production, 23 percent in mid tier miners, 10 percent in senior miners and 10 percent in exploration companies.

Hamburg, NY (WBEN) — A portion of the long-dormant Bethlehem Steel plant is about to be brought back to life.

The site’s owner, Great Lakes Industrial Development LLC, says it has sold 44 acres of the 16-acre site, including the building complex that used to house Bethlehem’s Galvanized Product Division, to Metalico, Inc. The purchase price was $3.2 million.

Metalico is based in New Jersey. It operates scrap metal recycling plants there, in New York, and in five other states. It already runs a total of five facilities in Erie, Niagara, and Chautauqua counties.

Metalico’s plan is to install a heavy-duty 80104 Metal Shredder in the empty building. That will leave room inside the facility for the future addition of more recycling equipment.

Metalico estimates that installing the shredder will immediately create 15 to 20 permanent jobs.

Great Lakes Industrial Development eventually hopes to attract tenants for the rest of the former Bethlehem Steel site, creating a business park for manufacturing, warehousing and back office space.