The term ‘Vedanta’ will prove to be unintelligible for the average North American stock investor. It refers to ancient scripture from the sub-continent of India.
An industrial group named ‘Vedanta’ has ended May 2008 with a move that at first sight, appears to be less than intelligent. It has bought the copper mining assets of a bankrupt U.S. corporation. The move, on deep reflection, is really as wise as can be expected from the timeless civilization of the Indian sub-continent.
Copper is a vital ingredient of the modern world economy. Vedanta has bought the U.S. copper mines without legacy liabilities related to asbestos production, which caused the bankruptcy in the first place. An original Mexican owner of the U.S. Corporation, forced out by the bankruptcy, is so upset at the Indian move, that it plans a court challenge to oppose the transaction.
The matter is symbolic of the entire Metal Mining Industry. The latter has appreciated in stock market value by about 50% over the past year. This has happened while the S&P 500 has declined in misery and confusion. There are more than 40 listings of stocks from this part of the Basic Materials Sector on stock exchanges of the United States: this includes ADRs from other countries.
Metal Mining includes commodities such as gold, which are well-known and classic in appeal. It also includes substances such as palladium and uranium, which are far more valuable than the metals which are prominent in public minds.
Half the stocks of the Metal Mining Industry have May 2008 market capitalizations of less than $800 million each. They represent some of the best values to be captured in the stock market of today.
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