Vedanta shares jump on speculation of bid from China

Vedanta shares jump on speculation of bid from China

Vedanta Resources plc jumped the most in 17 months in London trading on speculation a Chinese company may buy a stake in India`s largest copper and zinc producer.

Alex Pettifer, a spokesman for London-based Vedanta, declined to comment on "market speculation". "Whether the Vedanta bid speculation is fact or rumor, itseems almost certain that the Chinese will be buyers of resource assets for strategic reasons over the next few years," said Richard Scott, who helps oversee about US$1 billion at Iimia Investment Group in Exeter, England. "

A lot of investors will be reluctant to give up on emerging markets and commodities as a key positive theme, and obviously Vedanta plays to both."

China is seeking access to natural resources to help meet rising commodity demand, driven by its booming economy which expanded 11.5% in the third quarter. It`s the biggest consumer of steel, copper, zinc and aluminum.

The shares rose as much as 220 pence, or 12%, to 2,120 pence in London, and were trading at 2,002 pence as of 10:22 am local time, valuing the company at £5.76 billion (US$11.9 billion).

Vedanta, 54%-owned by billionaire Anil Agarwal, produces copper in Australia, India and Africa. The company is spending more than US$1 billion expanding its copper mine and smelter in Zambia.

It also smelts aluminum and refines zinc. Vedanta was denied permission by the India`s Supreme Court to mine bauxite in Orissa, the Press Trust of India reported on November 23.

The company had asked for rights to mine a forest area of 672 hectares (1,660 acres) in the Niyamgiri region of Kalahandi and Rayagada districts of the eastern Indian state, the agency said.(Bloomberg, November 23)