"Is the battle for copper being waged in Canada worthwhile enough to handicap? Inmet Mining, Lundin and Equinox are vying for the chance to create what is claimed will be the 3rd largest pure copper producer in the world. It seems like this might be more fertile ground than investing in serially mismanaged companies like Rio Tinto and BHP. In a world where it's cheaper to acquire assets on the stock exchange than with a shovel, isn't it more prudent to invest in takeover candidates rather than bloated behemoths?"

Eoin Treacy's view Thank you for this interesting question. I'm not sure I would go so far as to say that Rio Tinto and BHP Billiton are mismanaged. However, we have complained in the past about their reticence in paying a more attractive dividend and neither has been particularly successful in their acquisition strategy. Following a difficult period, Rio Tinto's purchase of Alcan may be beginning to pay off though.

As you point out both shares are mega-cap miners and smaller companies may offer more leverage to the metal price, both up and down. Smaller shares also have the potential to be taken over at a premium. This article by Dorothy Kosich for Mineweb has some additional information on the competition to merge with Lundin Mining.

Southern Copper, Antofagasta, Kazakhyms, Freeport-McMoRan Copper & Gold, Equinox Minerals, Inmet Mining, Hudbay Minerals, OZ Minerals and Baja Mining have all pulled back to test their 200-day MAs and need to find support in the current region for their medium-term uptrends to remain consistent.

Ivanhoe Mines, Grupo Mexico, Sociedad Minera Cerro Verde, KGHM Polska, Jiangxi Copper, Boliden, Mercator Mining and Capstone Mining Corp are still somewhat overextended relative to their 200-day MAs and need to hold their progressions of rising reaction lows to remain consistent.

Lundin Mining fell to retest it MA last week and rallied emphatically yesterday. A sustained move below C$6 would be required to question scope for some additional upside.