jp morgan global metals & mining october

Global Equity Research 09 October 2009

Global Metals & Mining

Weekly Wrap-Up

Metals & Mining

Michael F. GambardellaAC

(1-212) 622-6446 [email protected]

J.P. Morgan Securities Inc.

Rodolfo R. De Angele, CFAAC


Banco J.P. Morgan S.A.

John Bridges CFA, ACSMAC


J.P. Morgan Securities Inc.

David GeorgeAC


J.P. Morgan Securities Australia Limited

Jeffrey LargeyAC


J.P. Morgan Securities Ltd.

Frank LiAC

(852) 2800-8511 [email protected]

J.P. Morgan Securities (Asia Pacific) Limited

Steve ShepherdAC


J.P. Morgan Equities Ltd.

See page 29 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

Please see page 2 for our complete Global Metals & Mining team list.

• Alcoa: Kleinfeld Rejuvenating Alcoa - Reiterate OW (p-8)

• Burning Thoughts #24: Coal and the Vancouver Port Tango (p-8)

• Norsk Hydro: Upgrade to Neutral (p-11)

• Klöckner & Co.: Upgrade to OW; Accretive deals to enhance valuation (p-11)

• BHP Billiton Limited: Olympic Dam Main Haulage Shaft Failure (p-14)

• Bumi Resources: 19% interest charged annually - ALERT (p-14)

• Steel: Domestic HRC prices likely to come under pressure in the near term - ALERT (p-15)

• Steel Authority of India Ltd: Chiria Mine allocation- Long Term Positive, No near term impact likely - ALERT (p-16)

• Latin Coppers: Raising estimates on higher copper price forecasts, prefer GMex over PCU (p-18)

• Vale: Revising estimates to incorporate new base metal forecasts (p-18)

Please refer to “Table 2: Most Recent Publications by the Global Metals and Mining Team” for the list of original publication dates.

Table 1: Top Global Metals Equity Picks prices are in local terms unless otherwise indicated

EPS (Local) JPM Rating Company Analyst

Primary Metal Country CCY

Price08 Oct-09

Mkt. Cap (US$ MM)

Fiscal Yr. End 09E 10E

OW Alcoa Gambardella Aluminum US USD 14.35 13,982.25 Dec -0.70 1.15 OW Thompson Creek Metals Gambardella Moly US USD 12.67 1,763.44 Dec 0.50 1.80 OW Nucor Gambardella Minimill US USD 45.53 14,327.06 Dec -0.82 3.00 OW Randgold Resources Ltd Shepherd Gold UK USD 74.78 6,201.09 Dec 1.02 1.34 OW Arch Coal Bridges Coal US USD 23.44 3,808.32 Dec 0.26 1.12Source: J.P. Morgan estimates, Bloomberg. Note: J.P. Morgan ratings: OW = Overweight; N = Neutral; and UW = Underweight

2


Michael F. Gambardella (1-212) 622-6446 [email protected]

J.P. Morgan Global Metals and Mining Equity Research North America Europe Asia Pacific Michael F. Gambardella (New York) Jeff Largey (London) Sukit Chawalitakul (Thailand) Global Sector Coordinator (44-20) 7325-9744 (66-2) 684-2679 (1-212) 622-6446 [email protected] [email protected] [email protected] Michael Jansen (London) J.P. Morgan Securities (Thailand) Limited John Bridges,CFA, ACSM (New York) (44-20) 7325-5882 Frank Li (Hong Kong) (1-212) 622-6430 [email protected] (85-2) 2800 8511 [email protected] Ben Defay (London) [email protected] Nathan Zibilich, CFA (New York) (44-20) 7325-9231 Wenwen Wang (Hong Kong) (1-212) 622-2039 [email protected] (86-21) 5200 3786 [email protected] J.P. Morgan Securities Ltd. [email protected] Ankush Agarwal, CFA (New York) J.P. Morgan Securities (Asia Pacific) Limited (1-212) 622-5623 Aditya Srinath (Jakarta) [email protected] (62-21) 5291 8573 Tyler Langton (New York) [email protected] (1-212) 622-5234 Stevanus Juanda (Jakarta) [email protected] (62-21) 5291 8574 J.P. Morgan Securities Inc. [email protected] PT J.P. Morgan Securities Indonesia Pinakin Parekh (Mumbai) (91-22) 6639 3018 [email protected] J.P. Morgan India Private Limited Latin America & Emerging Markets Africa Rodolfo Angele, CFA (Sao Paulo) Steve Shepherd (Johannesburg) (55 11 3048 3888) (27-11) 507 0386 [email protected] [email protected] Australia Fabio Bevilaqua (Sao Paulo) Allan Cooke (Johannesburg) Mark Greenwood (Sydney) (55 11 3048 3403) (27-11) 507-0384 (61-2) 9220 1563 [email protected] [email protected] [email protected] Banco J.P. Morgan S.A. Abhishek Tiwari (Johannesburg) Benjamin Wilson (Sydney) Yuriy A Vlasov (Moscow) (27-11) 507 0363 (61-2) 9220 1384 (7 495 967 7033) [email protected] [email protected] [email protected] J.P. Morgan Equities Limited Dale Koenders (Sydney) J.P. Morgan Bank International LLC (61-2) 9220 1579 [email protected] David George (Melbourne) (613) 9608 4002 [email protected] J.P. Morgan Securities Australia Limited Japan Akira Kishimoto (Tokyo) (81-3) 6736-8646 [email protected] JPMorgan Securities Japan Co., Ltd. J.P. Morgan USA Metals and Mining Credit Research North America High Yield Research Dave Katz (New York) (1-212) 270-4593 [email protected] J.P. Morgan Securities Inc.

The authors acknowledge the contribution of Sadhak Bindal of J.P. Morgan Services India Private Ltd., Mumbai, to this report

3



Recently Published Reports Table 2: Most Recent Publications by the Global Metals and Mining Team

Date Published Analyst Title Pages 8-Oct-09 Gambardella Alcoa : Kleinfeld Rejuvenating Alcoa - Reiterate OW 9 8-Oct-09 Bridges Burning Thoughts #24 : Coal and the Vancouver Port Tango 22 7-Oct-09 Largey Klöckner & Co. : Upgrade to OW; Accretive deals to enhance valuation 16 7-Oct-09 George BHP Billiton Limited : Olympic Dam Main Haulage Shaft Failure 9 6-Oct-09 Parekh Steel Authority of India Ltd : Chiria Mine allocation- Long Term Positive, No near term impact likely - ALERT 4 6-Oct-09 Juanda Bumi Resources : 19% interest charged annually - ALERT 5 5-Oct-09 Kishimoto Nippon Steel (5401) : Kimitsu No. 2 Furnace Restarted - ALERT 4 1-Oct-09 Kishimoto Steel Sector : Steel Shipments (August): Volume up YoY; Prices Likely to Rise Moderately 6

30-Sep-09 Bridges Coal : EPA turns the screw on 79 mountaintop permits - ALERT 4 25-Sep-09 Gambardella Global Metals & Mining : Weekly Wrap-Up 44 25-Sep-09 Bridges US Coal Industry : Q3 Earnings' Preview, Coal Price Update, Ratings Changes and Roll-over of Target Prices 24 24-Sep-09 Vlasov Polymetal : Turning silver into gold. Initiating coverage at OW 36 24-Sep-09 Parekh Sterlite Industries : Sterlite Energy- Company re-affirms 1980MW power project - ALERT 4 24-Sep-09 Kishimoto Steel Sector : World Crude Steel Production (August): Solid Recovery Continues 5 23-Sep-09 Kishimoto Steel Sector : U.S. Steel Inventories (August): At Historical Lows 4 22-Sep-09 Bridges Gold & Precious Metals : Denver Gold Forum 2009 Round-Up 36 22-Sep-09 Bridges Rentech Inc. : Test unit is working; now for the first commercial plant. We visit the PDU 11 22-Sep-09 Angele Grupo Mexico : Asarco worst case not nearly as bad as before - expect discount to narrow further - ALERT 6 22-Sep-09 Greenwood OneSteel Limited : Demand outlook remains cautious despite price rises and stimulus spending 11 22-Sep-09 Katz HY Metals and Mining : September monthly: Coal outlook, steel outlook and X 57

21-Sep-09 George Rio Tinto Limited : Feedback from North American Site Visit: Cautious on aluminium outlook, focus on cost reductions - ALERT 5

21-Sep-09 Parekh Metals - Investor Meeting Takeaways : While investors wary of valuations, few willing to go against momentum; China data points over the next two months likely to be key - ALERT 5

18-Sep-09 Kishimoto Steel Sector : Domestic Crude Steel Production (August): Blast Furnace Steel Has Recovered to Nearly 80% of Peak 6 18-Sep-09 Gambardella Global Metals & Mining : Weekly Wrap-Up 43 17-Sep-09 Largey Outokumpu : Take Aways from IR Day - ALERT 4 17-Sep-09 George BHP Billiton and Rio Tinto : BHP priced for perfection, downgrade to UW, take profits; maintain market weight in RIO 16 16-Sep-09 Gambardella Arcelor Mittal : Investor Day Recap - ALERT 4 16-Sep-09 Largey ArcelorMittal : Investor Day's Recap - ALERT 4 16-Sep-09 Kishimoto Nippon Steel (5401) : Kimitsu Plant No. 2 Blast Furnace to Be Restarted - ALERT 4 16-Sep-09 Katz Steel Industry Primer and High Yield Outlook 43 16-Sep-09 Katz U.S. Steel Corp : Initiating Credit Coverage with an Overweight Rating 77 15-Sep-09 Gambardella Nucor Corp. : NUE Specific Pig Iron Hits 3Q EPS - Raising 4Q EPS 8

15-Sep-09 Gambardella Nucor Corp. : Company specific pig iron issue a $0.37 drag on 3Q - Remain positive on integrated producers X, MT and AKS 1

15-Sep-09 Kishimoto Nippon Steel (5401) : Initiating Coverage at Overweight: Top Blast Furnace Steelmaker, Growth Strategy Centers on High-grade and Midrange Market Segments 5

15-Sep-09 Kishimoto YAMATO KOGYO (5444) : Initiating Coverage at Neutral: Electric Furnace Ordinary Steel Maker with Ambitious Overseas Plans 5

15-Sep-09 Kishimoto JFE Holdings (5411) : Initiating Coverage at Overweight: Needs to Beef Up Overseas Strategy to Complement Domestic Earning Power 5

15-Sep-09 Kishimoto TOKYO STEEL MFG (5423) : Initiating Coverage at Neutral: Clear Medium- to Long-Term Growth Scenario 5 15-Sep-09 Kishimoto Sumitomo Metal Industries (5405) : Initiating Coverage at Overweight: Realizing Distinctive Growth 5

15-Sep-09 Kishimoto Kobe Steel (5406) : Initiating Coverage at Neutral: Comprehensive Assessment of Diversified Business Portfolio Takes Time 5

15-Sep-09 Kishimoto Daido Steel (5471) : Initiating Coverage at Overweight: Cyclical Recovery and Attractive Medium- to Long-term Growth Potential 5

15-Sep-09 Bridges Gold & Precious Metals : Denver Gold Forum Day 1 Wrap-up 12

15-Sep-09 Kishimoto Steel Sector : Initiating Coverage of Seven Steelmakers: Increasing Strategic Options for Longer-term Growth in Addition to Cyclical Recovery 164

14-Sep-09 Angele Latin Steels : Brazilian flat steel price increases at risk - ALERT 7 14-Sep-09 Gambardella Freeport-McMoRan Copper & Gold : FCX Big Beneficiary of Weak Dollar - Raising 3Q EPS by 52% 6 13-Sep-09 Largey European Steel : Top Threats to Sustainable Recovery 60 11-Sep-09 Gambardella Global Metals & Mining : Weekly Wrap-Up 32 11-Sep-09 Parekh Sterlite Industries : Back in the reckoning? Sterlite increases cash bid for Asarco to $2.56bn - ALERT 5 10-Sep-09 Gambardella Steel Dynamics : Raises 3Q09 EPS guidance to $0.20-0.25 from $0.10-0.20 1 10-Sep-09 Vlasov MMK : Surprising on the upside with 2Q09 results - ALERT 4 10-Sep-09 Gambardella Steel : Tariffs on Chinese Steel Pipe a positive for X - ALERT 4

Source: Morgan Markets (J.P. Morgan)

4



Metals Snapshot Figure 1: Aluminum

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

1.60

Oct-07 Mar-08 Jul-08 Dec-08 May-09 Oct-09

$/lb

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

'000 tonsLME+Comex Aluminum Inventory

LME Aluminum Price

Source: Bloomberg

Figure 2: Copper

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50


$/lb

0

100

200

300

400

500

600

700

'000 tonsLME+Comex Copper Inventory

LME Copper Price

Source: Bloomberg

LME aluminum prices moved lower by 1% to $0.82/lb while LME & COMEX inventories remained unchanged at 4,581kt for the week

The LME copper moved higher by 2% to $2.76/lb, while LME & COMEX inventories moved higher by 1% to 401kt for the week.

Figure 3: Nickel

3.00

5.00

7.00

9.00

11.00

13.00

15.00

17.00


$/lb

0

20

40

60

80

100

120

140

'000 tonsLME Nickel Inventory LME Nickel Price

Source: Bloomberg

Figure 4: Zinc

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80


$/lb

0

50

100

150

200

250

300

350

400

450

500'000 tonsLME Zinc Inventory LME Zinc Price

Source: Bloomberg

The LME nickel prices moved higher by 7% to $8.42/lb, while inventories remained unchanged at 121,326tonnes.

The LME zinc price moved higher by 1% to $0.87/lb, while inventories remained unchanged at 435,325 tonnes

5



Metals Snapshot Figure 5: Lead

0.25

0.45

0.65

0.85

1.05

1.25

1.45

1.65

1.85

2.05


$/lb

0

20

40

60

80

100

120

140'000 tonsLME Lead Inventory LME Lead Price

Source: Bloomberg

Figure 6: Tin

2.00

4.00

6.00

8.00

10.00

12.00

14.00


$/lb

0

2

4

6

8

10

12

14

16

18

'000 tonsLME Tin Inventory LME Tin Price

Source: Bloomberg

The LME lead price fell 2% to $0.96/lb and inventories remained unchanged at 127,875 tonnes.

The LME tin price fell 1% to $6.83/lb and inventories moved higher by 3% to 26.1kt.

Figure 7: Gold

500

550

600

650

700

750

800

850

900

950

1000

1050

1100


$/oz

200

250

300

350

400

450

500

550

600

650

No. of Contracts ('000)

Comex Gold Open Interest

Gold Price

Source: Bloomberg

Figure 8: Silver

8.5

10.5

12.5

14.5

16.5

18.5

20.5


$/oz

70

90

110

130

150

170

190

210

No. of Contracts ('000)

Comex Silver Open Interest

Silver Price

Source: Bloomberg

We remain positive on the longer gold fundamentals driven by demand and supply. However, we believe the near term direction will be driven by inflation and dollar depreciation expectations.

Industrial weakness led to a sharp pullback in silver prices, which are now recovering. We expect silver prices to remain volatile and to move more in line with gold prices.

6



Metals Snapshot Figure 9: Gold & Silver Inventories

105

110

115

120

125

130

135

140

145


Mn Ounces

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Mn OuncesComex Silver Inventory (LHS)

Comex Gold Inventory (RHS)

Source: Bloomberg

Figure 10: PGMs

750

950

1,150

1,350

1,550

1,750

1,950

2,150


$/oz

150

250

350

450

550

650

750

850

$/ozPlatinum Price (LHS)

Palladium Price (RHS)

Source: Bloomberg

Are the recent declines in the Comex silver inventories suggesting a tighter silver market?

We see a bleak environment ahead for PGMs demand that resulted from the global recession. We think a supply-side response is badly needed to avoid a massive oversupply.

Table 3: Metal Performance & JPM Forecasts Commodity Price on Week Week 30 Days 30 Day Price YTD YTD QTD JPM Forecasts

08 Oct-09 Ago Chng % Ago Chng % 01-Jan-09 Chng % Avg Avg Q3 09E 2009E 2010E Aluminum 0.82 0.83 -1% 0.85 -3% 0.68 20% 0.71 0.81 0.83 0.75 0.84 Copper 2.76 2.71 2% 2.93 -6% 1.38 100% 2.14 2.70 2.70 2.27 2.70 Nickel 8.42 7.87 7% 8.13 4% 5.27 60% 6.28 8.03 8.16 7.06 7.77 Zinc 0.87 0.86 1% 0.89 -2% 0.54 62% 0.67 0.85 0.84 0.72 0.86 Lead 0.96 0.98 -2% 1.11 -13% 0.46 110% 0.70 0.96 0.91 0.75 0.84 Tin 6.83 6.92 -1% 6.85 0% 4.70 45% 5.94 6.74 6.58 6.02 7.03 Silver 17.79 16.35 9% 16.43 8% 11.39 56% 13.83 16.77 16.13 14.33 15.79 Gold 1055 999 6% 995 6% 879 20% 934 1,021 1000 948 1006 Platinum 1347 1280 5% 1286 5% 935 44% 1,152 1,301 1275 1183 1338 Palladium 321 292 10% 297 8% 187 71% 239 303 290 250 306 DXY Index 76 77 -2% 77 -2% 81 -7% 82 77 - - - Source: J.P. Morgan estimates, Bloomberg Note: All prices for in $/lb, except for Gold, Silver & PGMs, which is in $/oz

Table 4: Metal Inventories Commodity Inventory on Week Week 30 Days 30 Day Inventory YTD

08 Oct-09 Ago Change % Ago Change % 01-Jan-09 Change % Aluminum 4,581,214 4,587,089 0% 4,602,639 0% 2,339,651 96% Copper 401,308 398,807 1% 368,283 9% 373,744 7% Nickel 121,326 120,912 0% 117,504 3% 78,390 55% Zinc 435,325 436,775 0% 436,525 0% 253,500 72% Lead 127,875 127,775 0% 121,775 5% 45,150 183% Tin 26,085 25,425 3% 20,345 28% 7,790 235% Silver 116,159 115,421 1% 117,655 -1% 127,692 -9% Gold 9,316 9,297 0% 9,173 2% 8,535 9% Source: Bloomberg. Note: Copper & Aluminum inventories are LME + Comex inventories in metric tonnes. Nickel, Zinc, Lead & Tin inventories are LME inventories in metric tonnes. Gold & Silver inventories are Comex inventories in '000 troy ounces

7



Global Movers and Shakers Figure 11: Best and Worst Equity Performance by Metals Sector five-day market-cap weighted return of indexes (%), local

Coal

Nickel

Steel

Zinc

PGM

Aluminum

Diversified

Gold

Copper

0 2 4 6 8 10 12 14 16

Source: Bloomberg

Figure 12: : Best Performance (Copper Sector) five-day return (%), local

Sterlite Industries

Grupo Mexico

Southern Copper Corp

Freeport-McMoRan Copper

Teck Cominco Ltd.

0 2 4 6 8 10 12 14 16

Source: Bloomberg

Figure 13: Worst Performance (Coal Sector) five-day return (%), local

Bumi Resources

Exxaro Resources Ltd

Centennial Coal Company

Tambang Bukit Asam

PT Tambangraya Megah

China Shenhua Energy

Raspadskaya

Banpu Public

Yanzhou Coal Mining - H

Rentech Inc.

China Coal Energy

Arch Coal

Peabody Energy

CONSOL Energy

International Coal Group

Massey Energy

-15 -10 -5 0 5 10 15 20

Source: Bloomberg

8



Regional Publications for the Week This note consists of excerpts from recently published research. For additional information on each stock's investment thesis, including valuation methodology and risks to price targets, please contact your salesperson, the covering analyst's team, or www.morganmarkets.com.

North America Alcoa: Kleinfeld Rejuvenating Alcoa - Reiterate OW • Alcoa kicked off 3Q09 earnings season last night with an impressive upside

surprise driven by both aggressive cost-cutting and by answering many of the market skeptics, posting 9% sequential revenue growth demonstrating strong operational leverage. At the same time, we believe CEO Klaus Kleinfeld has placed his stamp on Alcoa and changed the culture of the company which we believe should help Alcoa continue and maintain real cost reductions into the future. This marks the third consecutive quarter of better-than-expected EPS for AA after a dismal record of misses over the prior five quarters. We believe the sentiment around AA’s stock could be turning more positive and that this DJIA component could likely serve as a magnet for new money looking to play a global economic recovery. We reiterate our OW rating and December 2010 target price of $22.00.

• Raising 4Q EPS estimate to $0.15 from $0.10 and maintaining 2010 EPS estimate of $1.15. Our 4Q EPS increase reflects a $0.01/lb increase in our aluminum price forecast to $0.83/lb vs. the current spot price of $0.82/lb and further benefits from lower costs. Despite an increase in our aluminum price assumption for 2010 to $0.84/lb from $0.81/lb, we are maintaining our 2010 EPS forecast of $1.15 after adjusting for a higher fully diluted share count. Our 2010 EBITDA forecast increases to $4.1 billion from $3.7 billion and our 2010 ATOI forecast goes to $2.0 billion from $1.8 billion.

• Big 3Q EPS beat driven by cost-cutting and revenue growth. GAAP EPS from continuing operations was $0.07 which included a one-time $0.03 gain from the completion of the Suriname transaction resulting in adjusted EPS of $0.04 vs. JPM and consensus forecasts of ($0.09). The beat was driven by better-than-forecast ATOI in every segment except Engineered Products & Solutions.

• AA an attractive play on a global recovery. We believe investor sentiment is changing towards AA and the stock is beginning to be viewed as an attractive play on a global economic recovery. The stock trades at only 6.2x our 2010 EBITDA forecast vs. its long-term historical average multiple of 9.1x. We are maintaining our December 2010 target price of $22.00 which assumes an 8.0x EBITDA multiple which we view as conservative. (Michael F. Gambardella—New York)

Burning Thoughts #24: Coal and the Vancouver Port Tango • We recently visited Teck Coal’s mines in Canada and the Westshore and Neptune

ports that handle the bulk of coal sales. Although still small, Westshore handled 2.5mt of PRB coal in the last 15 months. The smaller Neptune port is looking for more of Teck’s business while Westshore is expanding capacity and is interested

Nonferrous Metals and Mining

9



in adding more PRB tons. We expect to see increases in PRB exports from Westshore and a slow build in Teck’s coking coal exports. We report on what we saw and learned, in this note.

• In coking coal “less is more” says CEO Don Lindsay. Teck highlights that in a tight market the company improves its bottom line by leaving the marginal ton of product in the ground. The company has the capacity to increase production from its current 24mt run rate perhaps by close to 50% but given the high stripping ratios, a decision to expand today would only raise sales in several years.

• Westshore has benefited from higher coking coal prices. Westshore’s contract with Teck gave the facility a share in the upside in coking coal prices. Teck has already removed this from its CP rail contracts and is hoping to do the same with its port contracts. Westshore, perhaps anticipating lower revenues from coking coal, is expanding capacity. We wonder if the PRB producers will offer Westshore price participation.

• Westshore says it likes the more stable profile of thermal coal, though the currently intermittent PRB exports create problems. Westshore has had some spontaneous combustion problems with PRB exports which it attributes to remnants of cargos that dry and then burn. One solution to this would be to export more coal. As Westshore readies to negotiate new port contracts with Teck, we expect more talks with PRB producers. We accept that PRB exports are unlikely to be high-margin business, but we continue to feel that they add value to the balance of PRB producers’ domestic sales.

• We conclude that coking coal supply remains tight and well managed in the Pacific basin though we remain skeptical of the higher price forecasts for 2010 coking coal prices. Teck has little scope to raise production in the short to medium term. Negotiations with unionized labor could actually interfere with planned sales. Positioning by Teck and Westshore ahead of negotiations is like a dance. Teck’s stance in redirecting some tonnage to its Neptune facility should open up more capacity for PRB coal exports. (John Bridges—New York)

10



Leaders and Laggards: North America Figure 14: Five-Day Performance five-day return (%), local

NucorGlobe Specialty Metals

Dynamic MaterialsWorthington Industries

Haynes InternationalU.S. Steel Corp

Commercial MetalsThompson Creek Metals

Rentech Inc.AK Steel

Steel DynamicsGold Reserve

Carpenter TechnologyArcelor MittalAllegheny Technologies

Barrick GoldGrafTech International

Goldcorp IncKinross GoldNewmont MiningAlcoa

Arch CoalAgnico-Eagle Mines

Peabody EnergyGerdau Ameristeel

CONSOL EnergyFreeport-McMoRan CopperSilver WheatonTeck Cominco Ltd.

Pan American SilverCliffs Natural ResourcesInternational Coal Group

Massey EnergyStillwater MiningCoeur d'Alene

Century Aluminum Co.

0 5 10 15 20 25 30

Source: Bloomberg

Figure 15: 30-Day Performance 30-day return (%), local

Rentech Inc.Steel Dynamics

AK SteelThompson Creek Metals

Worthington IndustriesCommercial Metals

NucorBarrick Gold

Arcelor MittalU.S. Steel CorpGrafTech InternationalNewmont Mining

Goldcorp IncGlobe Specialty MetalsKinross Gold

Century Aluminum Co.Carpenter TechnologyMassey EnergyPan American SilverAgnico-Eagle Mines

Freeport-McMoRan CopperStillwater Mining

Allegheny TechnologiesDynamic MaterialsPeabody Energy

AlcoaGerdau Ameristeel

Haynes InternationalSilver Wheaton

Teck Cominco Ltd.Coeur d'Alene

CONSOL EnergyArch Coal

Cliffs Natural ResourcesGold Reserve

International Coal Group

-20 -10 0 10 20 30 40 50

Source: Bloomberg

11



Europe/Africa Norsk Hydro: Upgrade to Neutral • Adjusting estimates based on new metal price forecast. J.P. Morgan's metal

strategist, Michael Jansen, has upgraded his aluminium price forecast to $1,647/tonne in 2009 (was $1,608/tonne) and to $1,844/tonne in 2010 (was $1,775/tonne). While NHY's practice of selling volumes forward limits the impact on our 2009 forecast, the new 2010 aluminium price forecast of $0.84/lb leads to a material 12% upgrade in our 2010 EBIT forecast (to NOK2,543m) and a 14% increase in our 2010 EPS forecast (to NOK1.25).

• Aluminium price has ignored supply overhang. Admittedly the aluminium price has proved stronger than anticipated YTD. Given that the aluminium price likely faces limited downside risk due to modestly improving supply/demand fundamentals (excluding perhaps exchange inventories), a weak USD and production cost pressures, we believe an UW rating on NHY is no longer justified particularly as the start up of Qatalum – a likely positive investment catalyst – comes closer to reality and NHY's earnings recovery, based in large part on restructuring and cost control, begins to gather steam. On the other hand, we believe aluminium's upside remains limited due to the risk of capacity restarts, significant LME inventories and a relatively muted recovery in underlying demand.

• Potential for Energy asset disposals further underpins share price. Following Orkla's recent disposal of Norwegian hydro power assets, we believe shares of NHY will be further underpinned by speculation regarding the future of its own Energy assets as the Orkla disposal values NHY's Energy division at NOK27 per share. While the disposal of NHY's power assets is not necessarily imminent, it should set a floor in the value of NHY's share price.

• Upgrade to N; Set Dec 10 PT of NOK46. Aluminium faces many headwinds relative to other metals (namely in terms of supply), but we also acknowledge that curtailments have helped mop up excess supply while a demand recovery (at least in terms of re-stocking) is underway. In addition, a weak USD, the potential for power asset disposals, a potential reduction in pension liabilities and the pending start up of Qatalum all create a more positive outlook for shares of NHY. We raise our PT from NOK33 (Dec-09) to NOK46 (Dec-10) at an average forward multiple of 8x ‘11E EBITDA and estimate NHY trades appropriately at 8.5x ‘10 EBITDA. (Jeff Largey—London)

Klöckner & Co.: Upgrade to OW; Accretive deals to enhance valuation • Rights issue overhang now gone. Now that KCO has completed its €193m rights

issue, we believe a key overhang has been removed and investors can benefit in two respects from owning under valued shares of KCO: 1.) KCO enjoys considerable leverage to the steel cycle thus benefiting from a macro economic recovery; and 2.) KCO is now positioned to engage in accretive and valuation enhancing acquisitions.

• Competitive landscape ripe for acquisitions. Armed with a total war chest of over €600m, we believe KCO finds itself in a unique position to enhance its valuation by adding incremental EBITDA through acquisitions at relatively low cost as the highly fragmented steel distribution industry is potentially rife with distressed competitors who are unable to finance net working capital requirements. In terms


Steel

12



of timing, we believe KCO is exploring multiple value enhancing transactions that could occur within the next six to twelve months and serve as positive catalysts for KCO’s share price. We note the latent acquisition benefit is enhanced by KCO’s successful track record of cost savings through integration.

• Raising 2011 earnings outlook. Based on KCO’s guidance (from the October 6 capital markets day) that the company would achieve an underlying EBITDA margin of 6% in 2011 and 10% y/y sales growth in both 2010 and 2011, we have raised our 2011 EBITDA forecast by 12% to €257m (although we do not give KCO the full benefit yet). While underlying EBITDA should soon swing back to profitability in the near term, we believe reported 2H 2009 EBITDA could be aided by an inventory re-valuation reversal (perhaps by as much as €60m).

• Upgrade to OW; Increase Dec-10 PT to €24 (from €22). We believe KCO's improving earnings outlook and leverage to the cycle justify our PT of €24 as KCO trades at an attractive 2010 EV/EBITDA multiple of 4.8x and a P/E of 14.7x. Moreover, KCO's strong balance sheet and potential for valuation enhancing acquisitions further strengthens the Overweight investment thesis as it partially detaches KCO from the macro economic outlook (as does the self-stabilizing steel distribution model). (Jeff Largey—London)

13



Leaders and Laggards: Europe/Africa Figure 16: Five-day Performance five-day return (%), local

SeverstalExxaro Resources Ltd

AcerinoxLonmin plc (LONJ.J)

Impala Platinum HoldingsRaspadskaya

African Rainbow MineralsBHP Billiton (BILJ.J)Voestalpine

DRDGold LtdNortham Platinum LtdGold Fields LtdEastern Platinum Ltd.ThyssenKrupp

MMKHarmony Gold Mining CoArcelorMittalSalzgitter

OutokumpuAquarius Platinum (SA)AngloGold Ashanti LimitedEvraz Group

SSABLonmin plc

TMKAnglo American Platinum

Randgold Resources LtdRio Tinto plc

Norsk HydroNovolipetsk Steel

Klöckner & Co.

-5 0 5 10 15 20

Source: Bloomberg


Northam Platinum LtdDRDGold Ltd

Lonmin plc (LONJ.J)Impala Platinum Holdings

OutokumpuLonmin plc

AcerinoxHarmony Gold Mining Co

African Rainbow MineralsArcelorMittalBHP Billiton (BILJ.J)AngloGold Ashanti LimitedGold Fields LtdAquarius Platinum (SA)

ThyssenKruppExxaro Resources LtdSalzgitter

Anglo American PlatinumRandgold Resources LtdKlöckner & Co.

Eastern Platinum Ltd.SSAB

Rio Tinto plcVoestalpine

Evraz GroupNorsk Hydro

Novolipetsk Steel Severstal

MMKRaspadskaya

TMK

-20 -10 0 10 20 30 40 50 60

Source: Bloomberg

14



Asia/Australia BHP Billiton Limited: Olympic Dam Main Haulage Shaft Failure • BHP announced the fully automated haulage system in the main shaft at its

Olympic Dam copper/uranium/gold mine was damaged in a mechanical failure at 10:30pm on Tuesday October 6. Details on the extent of damage, potential cause and likely outage period for the operations are sparse, but it has been confirmed that there were no injuries. The secondary ore haulage system was not damaged in the incident.

• Olympic Dam ore production in FY2009 was 9.88Mt, of which it is estimated the now damaged non-operating main haulage system accounted for ~80%. Total copper production in FY09 was 194kt, uranium production was 4kt, while gold production was 108koz. Our estimate of outage period for repairs and re-commissioning is 3-6 months, absent company guidance. While some 20% of ore haulage capacity through the secondary system remains unaffected, we expect that this will provide insufficient ore to feed the concentrator circuit efficiently. Consequently, if the ore haulage shaft outage does extend to 3 months we’d expect the concentrator, smelter and refinery will need to be temporarily shutdown.

• Earnings impact of extended outage is minimal as Olympic Dam contributed only US$117M EBIT to BHP’s US$18.2B for FY09, and we were forecasting EBIT loss of –US$31M for FY10E (JPM est. BHP FY10 EBIT of US$13.2B).

• However, as Olympic Dam accounts for ~5% of global uranium supply, an extended outage is likely to cause upward pressure on uranium prices. Given its large exposure to spot uranium prices, we'd argue Paladin is the preferred exposure to this effect rather than ERA, which still sells majority of its uranium under lower-priced legacy contracts. While Olympic Dam accounts for only ~1% of global copper supply its annual production is ~50% of LME stockpiles, prolonged outage would be supportive of prices in a tight market.

• We stay UW on BHP, with the shares seen as expensive, trading at 1.5x FY10E NPV, a demanding FY10E P/E of 20.5x, and 22.8% above our price target. While not cheap in its own right, we prefer RIO (CY10E P/E 13.7x, 1.2x CY10E NPV Neutral, P/T $58.24/sh) for large mining stock exposure to global economic recovery. Risks include different commodity, currency and operating costs than our forecasts. (David George—Melbourne)

Bumi Resources: 19% interest charged annually - ALERT • We attended BUMI’s analyst meeting and reiterate our negative view on CIC

loan. (For complete analysis, kindly refer to our 2 Oct 2009 report: “Short-term selling pressure from CIC loans likely” for more detail.):

• 19% interest will be charged: The US$1.9B CIC loans will be charged at 19% per annum for the next two years. As the lock-up period is for the loan is two years, BUMI will not be able to refinance. Hence, the interest cost will be high for the next two years until 4Q11. If we were to simulate using 2Q09 results with $1.9B in debt and 19% annual interest (equivalent to US$90MM per quarter), 2Q09 net income would be adjusted downwards by 36.7%. (Please refer to Table 1 for detailed calculation.)

• Potential downwards adjustments to consensus FY10E forecast: Once again, we would like to reiterate our concern over potential downwards adjustment to


15



consensus’ FY10E forecast. Currently consensus is forecasting FY09E and FY10E net income of US$444.9MM to US$392.8MM; down 11.7% Y/Y. With the effective interest rate rising from 4% (1H09 effective interest cost) to 19% and assuming US$1.9B in loan outstanding, we calculate that there is a 41.1% potential downside adjustment (to US$231MM) to consensus forecast. (Please refer to Table 2 for detailed calculation.)

• Cash out to DEWA, FBS, and Pendopo: With the receipts of the CIC debt, the sellers of DEWA, Fajar Bumi Sakti and Pendopo Batubara Energy have received the proceeds from BUMI. Although BUMI could get the money back if the three companies do not achieve their targets, we view this negatively as this is a deviation of the original plan communicated to investors, not to mention that these three deals had been viewed as controversial by the market.

• Debt level likely to rise: In anticipation, we believe that debt level is likely to rise beyond the US$1.9B level on the back of capital expenditure requirement that could amount to US$3billion in the next 3 years. While currently BUMI’s equity is only US$1.76B, debt raising is likely to be needed to finance these aggressive expansions.

• Maintain Neutral and Jun-10 PT of Rp3,200: With these factors, we maintain our Neutral rating and Rp3,200 Jun-10 PT. Our SOTP is derived by adding the DCF values of each subsidiary (risk-free: 10.5%, equity risk premium: 5.5% and terminal growth: 5.5%). Finally, we attach a 15% corporate governance discount to BUMI. Risks: (1) Better than expected profit (2) Favorable/irrational acquisitions. (Stevanus Juanda—Jakarta)

Steel: Domestic HRC prices likely to come under pressure in the near term - ALERT • Import prices decline sharply, domestic prices likely to come under pressure:

Landed imported steel prices in India have declined sharply over the last 1 month as Chinese export prices have come off. The recent INR appreciation has added to the woes (INR has appreciated by 5.5% since the beginning of September). While CIS import HRC prices have remained stable, Chinese HRC prices have declined sharply from $630/MT to $500/MT (offers are now happening at $480/MT). Thus landed Chinese import prices are at Rs27,000/MT around 10% lower than current domestic prices of Rs30-31,000/MT.

• Domestic steel prices- October is officially a roll-over month, but we do expect steel discounting to increase from here: Steel companies, which had hiked flat product prices by Rs1000-1500/MT in September, have as of now rolled over prices for October. However, given the increasing gap between import and domestic prices, we do expect discounts to be likely given (though ‘officially' list prices would be maintained).

• Steel imports unlikely to increase materially from here: Steel prices for most part of the year, early on (please refer to Figure 1 on page 2), were at a significant premium to import prices, given that non tariff barriers like ‘licensing' were in place. However, while we may see end users like re-rollers look more towards the import market, we do not see steel imports materially picking up from here, given that it remains difficult for the trade level to import in India. However, given the continued sluggish state of domestic demand, we expect imports on the margin influencing prices.

Steel

16



• Long steel prices remain sluggish: Increase in scrap prices, combined with some recovery in demand led to long steel prices recovering over the last 2 months, but prices are stable, and unless, globally scrap prices and iron ore prices move up significantly, longs should remain stable. Demand should recover as the rains recede.

• Risk remains of further decline in Chinese export prices: Given the cost structure of the Chinese steel industry, while it looks difficult for export steel prices to weaken further from $500/MT, in the event they do fall further, it is likely to increase pressure on the domestic steel pricing market. As of now CIS steel prices are holding up well, and we have not seen CIS matching offers with the Chinese prices. (Pinakin Parekh—Mumbai)

Steel Authority of India Ltd: Chiria Mine allocation- Long Term Positive, No near term impact likely - ALERT • Government decision to allot half of Chiria Mines to SAIL, long term positive:

As per the Business Standard, the Government has decided to allot half of the Chiria Mines (in the Eastern India state of Jharkhand) to SAIL, while the other half would be kept for development by the private sector. Earlier Arcelor Mittal was also in the race for the Chiria Mines.

• Chiria Mines- Among the largest in the world: Current reserves of Chiria mines stand at close to 2bn tonnes of high grade iron ore, among the larger ones in the world. However this is likely based on preliminary exploration, and generally in India the reserves are marked up significantly as a more detailed exploration takes place.

• Longer term positive for SAIL: While we do not expect any near term supply of iron ore from the Chiria mines (in fact it would likely be years, before supply starts), we believe it is a long term positive for SAIL given the expected steel capacity growth. It is also positive for SAIL, in the sense that it retains a competitive advantage of captive iron ore vis a vis many other industry players and highlights that green field capacities in India remain very difficult to execute.

• Would any new steel plant be required in Jharkhand?: What remains to be seen is, if in lieu of the mine allocation, SAIL has to further increase investments in Jharkhand (it already has planned expansions in Bokaro steel plant in Jharkhand).

• Current iron ore reserves and requirements: While no clear cut data is available on iron ore mine reserves of steel companies, as per our interactions with industry associations, SAIL has an estimated 1.2bn tonnnes of iron ore reserves but is currently mining from mines with an estimated reserves of 0.5bn tones, given various clearances are still awaited for the other mines (Forest clearance not yet been received for the large Rowghat mines). SAIL's current iron ore requirements are 23MT, but is likely to increase to 43MT, post the capacity expansions.

• Updates on equity issuance: As per media reports (Economic Times), the government has asked SAIL to give a specific proposal for the proposed fund raising and the company's board is likely to discuss the same over the next few weeks. We believe SAIL is likely to raise fresh equity to fund its large capex program, and the Government has stated that it would likely sell some of its stake in the equity issuance. Current Government stake stands at 85.8%. Current market cap is $14bn. (Pinakin Parekh—Mumbai)

17



Leaders and Laggards: Asia/Australia Figure 18: Five-day Performance five-day return (%), local

Angang Steel Co - AMaanshan Iron & Steel - A

Sims Group LimitedJFE Holdings

Aluminum Corp. of ChinaBaoshan Iron & Steel - A

POSCOChina Steel Corp

Centennial Coal CompanyIluka Resources

Tambang Bukit AsamBlueScope SteelPT Tambangraya MegahNational Aluminium Co Ltd

Energy Resources of AUSPT Nickel IndonesiaKobe Steel

Fortescue Metals GroupHindalco IndustriesChina Shenhua EnergyMaanshan Iron & Steel - HNippon SteelYamato KogyoBHP Billiton LimitedOneSteel LimitedSumitomo Metal

Banpu PublicSteel Authority of India Ltd

Daido SteelRio Tinto LimitedTokyo SteelPaladin Energy Ltd

Angang Steel Co - HOZ Minerals Limited

Yanzhou Coal Mining - HTata Steel Ltd

China Coal EnergyAlumina Limited

Newcrest MiningPT Aneka Tambang Tbk

Sterlite IndustriesLihir Gold

Zijin Mining Group Co Ltd

Bumi Resources

-15 -10 -5 0 5 10 15 Source: Bloomberg


OZ Minerals LimitedAngang Steel Co - A

Maanshan Iron & Steel - ABaoshan Iron & Steel - A

Aluminum Corp. of ChinaDaido Steel

Sims Group LimitedFortescue Metals Group

Bumi ResourcesKobe Steel

Maanshan Iron & Steel - HTokyo Steel

Angang Steel Co - HJFE HoldingsNippon Steel

Paladin Energy LtdYamato Kogyo

OneSteel LimitedPT Nickel Indonesia

China Steel CorpSumitomo Metal

Iluka ResourcesEnergy Resources of AUS

National Aluminium Co LtdPT Tambangraya MegahCentennial Coal CompanyBHP Billiton LimitedBlueScope Steel

Yanzhou Coal Mining - HLihir GoldNewcrest MiningPOSCOChina Shenhua EnergySteel Authority of India Ltd

Rio Tinto LimitedBanpu Public

Tambang Bukit AsamHindalco Industries

PT Aneka Tambang TbkSterlite Industries

Zijin Mining Group Co LtdChina Coal EnergyTata Steel Ltd

Alumina Limited

-40 -30 -20 -10 0 10 20 30

Source: Bloomberg

18



Latin America Latin Coppers: Raising estimates on higher copper price forecasts, prefer GMex over PCU • Revising copper price forecasts. J.P. Morgan’s commodity strategy team revised

its base metal price forecasts upward. We expect the base metal space to remain softer into year-end due to the absence of aggressive Chinese demand, but the advent of Western world restocking should set the scene for higher prices in 1Q10. Copper remains J.P. Morgan’s preferred base metal as the long-term fundamentals remain strong driven by supply-side constraints. Our new copper prices are $4,998/tonne and $5,950/tonne for ’09 and ’10, respectively (or $2.27/lb and $2.70/lb), up 5% and 7%. Our forecasts are in line with consensus and forward prices for 2010 but are 5-7% shy in 2011 as we believe the supply deficit will not be as extreme as consensus foresees. We are also assuming higher moly prices ($13.7/lb for ’09 and $20.0/lb for ’10, up 19% and 11% respectively) as a result of higher spot prices and a pickup in global steel production.

• Raising PCU estimates: valuations remain rich – remain UW. We are raising PCU’s ’09 and ’10 EBITDA estimates to $1.9B and $2.6B, respectively, 11% and 14% higher vs. previous estimates, on higher commodity price forecasts. We keep our volume assumptions unchanged as there is little update on the Cananea mine restart (25% of capacity), which should continue to weigh on earnings into 2010. We maintain our UW rating on PCU based mostly on rich valuations – even with revised copper prices, PCU still trades at 15.1x and 10.9x ’09e and ’10e EBITDA, at a premium to the copper peers’ average of 10.7x and 7.4x, respectively. Our new Dec-10 price target of $27.5 implies 17% downside to current market price.

• GMex – our preferred way to gain copper exposure as risks diminish. With substantial risks related to the Asarco bankruptcy out of the way, in our view, and a final outcome expected soon (by Nov. 30), we believe GMex’s discount to NAV of 38% is not justified and should close to ~20% on a final ruling by the District Court. We revise our ’09 and ’10 EBITDA estimates for GMex to $2.2B and $2.9B, respectively, 9% and 12% above previous estimates. Trading at 8.9x and 6.5x ’09e and ’10e EBITDA, GMex remains one of the cheapest stocks and our preferred way to gain copper exposure. Our new Dec-10 price target of Ps31.5 implies 18% upside from the current price. (Rodolfo Angele—Sao Paulo)

Vale: Revising estimates to incorporate new base metal forecasts • We are adjusting our estimates to incorporate slightly increased base metal price

forecasts. Our new Dec ’10 price targets are $24.5/ADR for VALE and $21.5/ADR for VALE/P (up from $23.5/ADR and $20.5/ADR respectively). In a separate note published today, we have also increased our estimates for copper producers Southern Copper and Grupo Mexico.

• Base metal prices modestly up . . . J.P. Morgan’s commodity strategist has revised base metal price forecasts upward. The view is less bullish in the near term as Western world restocking lags, but as demand picks up in 1Q10, prices should follow suit. It is important to notice, however, that we are not changing our iron ore forecasts of an increase of 10% in ’10. Our new nickel prices are $17,125/tonne and $16,000/tonne for ’10e and ’11e, respectively, up 9% and 7% from previous forecasts, while ’09e numbers remain largely unchanged. Copper has also been moved up to $4,998/ton from $4,775/ton in ’09e (up 5%) and to


19



$5,950/ton from $5,563/ton in ’10e (up 7%). Please refer to table 4 for the other changes.

• . . . and slightly higher estimates as a consequence. In line with JPM’s metal strategist’s revision, we are also marking 3Q metal prices to market and incorporating a slightly more positive forward scenario in our model. Our revised ’10e EBITDA numbers for Vale are now at $13.8B, up 5% vs previous forecasts of $13.1B, mainly on the back of improved base metal prices and slightly higher iron ore volumes – now at 306Mtons vs previous 292Mtons – slightly offset by lower nickel volumes due to strikes in Canada (down 13% to 287ktons).

• Top down constructive but valuations not supportive – Reiterate Neutral ratings. As we have said (please see our report Vale: Key takeaways from investor tour), Vale’s business outlook has been improving consistently, and not only should volumes increase but also prices are likely to stay supportive. This, coupled with positive newsflow, could drive share prices up short term. However, we believe that Vale’s share prices already reflect all the potential improvents that are yet to come, and trading at 9.7x EV/EBITDA for ’10e, Vale is at a 51% premium to its 6.4x historical average and 2% above peers’ valuation. Thus, we reiterate our Neutral ratings on the stocks. (Rodolfo Angele—Sao Paulo)

20



Leaders and Laggards: Latin America Figure 20: Five-Day Performance five-day return (%), local

Lupatech S.A.

Usiminas

CSN

Ternium

Grupo Mexico

Vale PN

Vale ON

Gerdau S.A.


CDM Buenaventura

0 2 4 6 8 10 12 14 16

Source: Bloomberg


Usiminas

Ternium

CSN

Gerdau S.A.

Grupo Mexico

Lupatech S.A.


Vale ON

Vale PN

CDM Buenaventura

0 5 10 15 20 25 30

Source: Bloomberg

21



Global Metals & Mining Valuation by Sector Figure 22: Non-ferrous Metals and Mining FV/EBITDA

1 0 . 9

7 . 7

0 . 8

7 . 2

1 1 . 9

9 . 2

6 . 5

1 5 . 6

6 . 3

9 . 9

7 . 57 . 0

6 . 2

1 . 1

0

2

4

6

8

1 0

1 2

1 4

1 6

1 8

N o r t h A m e r i c a E u r o p e A f r i c a A s i a A u s t r a li a L a t i n A m e r i c a G lo b a l

2 0 0 9 E 2 0 1 0 E

Source: J.P. Morgan estimates

Figure 23: Precious Metals FV/EBITDA

13.7

(94.2)

11.0

(14.3)

7.4 7.211.6

23.0

11.814.5

7.612.0

(120)

(100)

(80)

(60)

(40)

(20)

0

20

40

North America Europe Africa Australia Latin America Global

2009E 2010E


Figure 24: Steel FV/EBITDA 1 8 . 7

6 . 66 . 1

5 . 6

1 5 . 3

1 0 . 3

6 . 15 . 4

3 . 84 . 3

7 . 4

5 . 1

0

2

4

6

8

1 0

1 2

1 4

1 6

1 8

2 0

N o r t h A m e r i c a E u r o p e A s i a P a c i f i c ( e xJ a p a n )

J a p a n L a t i n A m e r i c a G lo b a l

2 0 0 9 E 2 0 1 0 E


22



J.P. Morgan Global Metals & Mining Coverage and Valuation Table

JPM Bloomberg Price Local 52-Wk (local) Local Returns (%)

USD (%) Mkt. Cap. Fiscal

EPS (Local) (Calendarised)

P/E (Calendarised)

FV/EBITDA (Calendarised)

Net Debt /

EBITDA Margin

Rating Company Ticker Country CCY Analyst 08 Oct-09 High Low 1 Wk 1 Mo 1 Yr YTD YTD (US$MM) Yr-end 09E 10E 09E 10E 09E 10E Capital 09E Non-ferrous Metals & Mining North America OW Alcoa AA US US USD Gambardella 14.35 15.86 4.97 11.1 13.9 -2.4 27.4 27.4 13,982 Dec (0.70) 1.15 NM 12.5 28.3 6.1 62% 7.6% OW Arch Coal ACI US US USD Bridges 23.44 28.95 10.43 11.7 29.4 -6.7 43.9 43.9 3,808 Dec 0.26 1.12 90.2 20.9 10.7 6.6 94% 17.0% N Century Aluminum Co. CENX US US USD Gambardella 10.76 18.69 1.04 25.4 7.3 -38.1 7.6 7.6 798 Dec (2.09) (0.31) NM NM (21.6) 10.5 22% -4.0% OW Cliffs Natural Resources CLF US US USD Gambardella 35.68 37.70 11.80 16.8 32.0 7.3 39.3 39.3 4,674 Dec (0.21) 2.30 NM 15.5 15.3 5.9 -5% 11.0% N CONSOL Energy CNX US US USD Bridges 49.51 49.96 18.50 14.4 22.7 34.0 73.2 73.2 8,946 Dec 2.81 2.82 17.6 17.6 7.3 6.9 46% 27.7% OW Freeport-McMoRan Copper FCX US US USD Gambardella 74.98 75.67 15.70 14.6 10.3 76.0 206.8 206.8 32,241 Dec 3.59 6.00 20.9 12.5 7.5 5.2 37% 32.5% OW Globe Specialty Metals GSM US US USD Gambardella 8.55 9.22 6.81 2.4 4.9 NM NM NM 620 Jun 0.26 0.55 32.9 15.5 NM NM -10% 0.6% N International Coal Group ICO US US USD Bridges 4.61 5.95 1.09 17.0 41.8 10.8 100.4 100.4 711 Dec 0.20 0.21 23.1 22.0 5.2 5.7 55% 16.9% N Massey Energy MEE US US USD Bridges 31.39 33.51 9.62 18.0 8.8 26.6 127.6 127.6 2,683 Dec 1.34 1.53 23.4 20.5 6.3 5.9 47% 17.7% N Peabody Energy BTU US US USD Bridges 40.09 41.54 16.00 12.3 13.1 25.5 76.2 76.2 10,730 Dec 1.26 1.34 31.8 29.9 11.0 10.7 57% 20.4% N Rentech Inc. RTK US US USD Bridges 1.63 2.93 0.45 5.8 -15.1 143.3 139.7 139.7 314 Sep 0.06 NM 27.2 NM 13.3 NM 350% 13.5% OW Teck Cominco Ltd. TCK/B CN Canada CAD Gambardella 30.82 33.10 3.35 14.8 17.7 52.9 438.4 364.6 18,138 Dec 1.89 1.76 16.3 17.5 6.5 7.0 47% 45.8% OW Thompson Creek Metals TC US US USD Gambardella 12.67 16.50 3.15 5.4 -2.7 61.8 172.0 134.7 1,763 Dec 0.50 1.80 25.3 7.0 12.3 4.2 -29% 39.1% Europe/Africa UW Norsk Hydro NHY NO Norway NOK Largey 42.50 42.50 19.75 12.8 13.5 38.4 52.9 23.9 9,353 Dec (0.45) 1.10 NM 38.6 20.1 7.8 -4% 3% N Raspadskaya RASP RU Rus USD Vlasov 4.15 4.22 0.72 2.2 44.3 48.2 315.0 315.0 3,240 Dec 0.12 0.18 34.6 23.1 2.7 1.8 4% 55% N Rio Tinto plc RIO LN UK USD Gardiner 182.52 184.50 50.03 11.6 8.9 14.7 142.9 142.9 103,235 Dec 7.71 NM 23.7 NM NM NM -36% 55% OW African Rainbow Minerals ARI SJ S.Africa ZAR Cooke 15,600.00 16,900.00 7,600.00 2.7 0.1 17.3 40.5 8.2 4,514 Jun 3,970.00 3,718.00 3.9 4.2 1.9 1.7 -28% 65% OW BHP Billiton (BILJ.J) BIL SJ S.Africa ZAR Cooke 20,877.00 21,799.00 11,980.00 2.9 0.4 31.0 17.5 -9.5 179,188 Jun 1,531.00 1,534.00 13.6 13.6 7.8 7.0 NM 35% OW Exxaro Resources Ltd EXX SJ S.Africa ZAR Cooke 9,100.00 9,600.00 4,751.00 -0.7 2.6 33.8 26.6 -2.6 4,423 Dec 1,629.41 1,575.55 5.6 5.8 10.3 10.3 12% 27% Asia/Australia N Aluminum Corp. of China 2600 HK China CNY Li 12.76 20.83 5.90 -2.3 -11.0 59.3 107.5 107.4 22,560 Dec 0.11 0.28 116.0 45.6 NM NM NM 15% N Banpu Public BANPU TB Thailand THB Chawalitakul 446.00 460.00 140.00 3.2 6.2 110.4 95.6 87.6 3,639 Dec 47.96 26.56 9.3 16.8 0.3 0.3 22% 61% N Bumi Resources BUMI IJ Indonesia USD Juanda 2,725.00 3,475.00 385.00 -12.8 -8.4 25.3 199.5 154.2 5,600 Dec 0.03 0.02 NM NM 5.6 6.5 88% 35% OW China Coal Energy 1898 HK China CNY Li 3.41 3.46 0.58 6.6 16.0 215.7 360.8 360.8 610 Dec 0.79 0.82 4.3 4.2 NM NM NM 30% N China Shenhua Energy 1088 HK China CNY Li 34.50 36.80 7.91 1.9 3.3 130.0 110.4 110.4 88,473 Dec 1.64 1.75 21.0 19.7 NM NM NM 50% UW Hindalco Industries HNDL IN India INR Parekh 129.25 139.90 36.75 1.9 7.5 42.3 151.5 138.8 4,742 Mar 8.60 8.35 15.0 15.5 NM NM NM 5% OW PT Tambangraya Megah ITMG IJ Indonesia IDR Juanda 23,850.00 27,800.00 5,900.00 0.2 0.6 88.5 127.1 92.8 2,854 Dec 0.30 0.19 NM NM (0.5) (0.5) -34% 31% OW PT Nickel Indonesia INCO IJ Indonesia USD Juanda 4,200.00 5,100.00 1,140.00 1.2 -2.3 86.7 117.6 84.7 4,420 Dec 0.01 0.01 NM NM (3.2) (3.4) -19% 16% OW Tambang Bukit Asam PTBA IJ Indonesia IDR Juanda 14,100.00 15,100.00 3,750.00 -0.4 7.2 168.6 104.3 73.5 3,441 Dec 1,371.32 587.19 10.3 24.0 (0.2) 0.3 -16% 43% N Yanzhou Coal Mining - H 1171 HK China CNY Li 11.80 13.00 2.98 5.5 2.4 104.5 107.4 107.4 10,076 Dec 1.08 1.07 10.9 11.0 NM NM NM 38% OW PT Aneka Tambang Tbk ANTM IJ Indonesia IDR Juanda 0.28 2,775.00 770.00 8.1 9.2 154.8 145.4 108.3 2,702 Dec 93.01 118.04 NM NM NM NM NM 13% OW Sterlite Industries STLT IN India INR Parekh 820.85 835.00 164.50 9.4 9.8 180.0 215.6 199.7 14,884 Mar 47.32 58.58 17.3 14.0 NM NM NM 28% UW Alumina Limited AWC AU Australia AUD George 1.93 2.39 0.68 6.6 20.2 -17.3 60.6 107.1 4,268 Dec (0.01) 0.04 NM 48.3 NM 42.4 18% NM UW BHP Billiton Limited BHP AU Australia USD George 38.16 39.85 20.00 2.6 1.2 27.9 25.4 61.7 179,187 Jun 1.31 1.73 29.2 22.1 7.9 6.7 9% 36% N Centennial Coal Company CEY AU Australia AUD George 3.25 4.37 1.51 -0.6 0.9 -5.2 -2.1 26.3 1,101 Jun 0.16 0.25 19.9 13.2 7.6 6.6 29% 22% UW Fortescue Metals Group FMG AU Australia USD George 3.74 4.75 1.16 1.6 -10.5 13.3 93.8 149.9 10,482 Jun 0.13 0.10 28.1 36.0 21.1 16.0 189% 37% N Iluka Resources ILU AU Australia AUD George 3.85 5.40 2.70 -0.5 -1.3 3.2 -17.0 7.0 1,461 Dec (0.11) 0.02 NM 175.0 13.7 6.7 51% 26% UW National Aluminium Co Ltd NACL IN India INR Parekh 349.05 400.00 105.25 0.4 0.2 -7.7 84.2 75.0 4,853 Mar 14.67 16.61 23.8 21.0 NM NM NM 27%

23






P/E (Calendarised)


Net Debt /

EBITDA Margin

Rating Company Ticker Country CCY Analyst 08 Oct-09 High Low 1 Wk 1 Mo 1 Yr YTD YTD (US$MM) Yr-end 09E 10E 09E 10E 09E 10E Capital 09E OW OZ Minerals Limited OZL AU Australia AUD George 1.26 1.39 0.40 4.8 -36.0 -85.1 -84.2 194.3 3,550 Dec 0.01 0.06 209.2 20.2 8.8 8.3 -30% 22% N Rio Tinto Limited RIO AU Australia USD George 61.30 68.30 23.59 4.1 5.4 -0.4 104.5 163.8 103,265 Dec 3.69 3.59 16.6 17.1 4.4 2.9 46% 32% Latin America

OW Grupo Mexico GMEXICOB MM Mexico USD De Angele 26.67 26.77 6.34 10.3 14.5 258.8 214.0 204.3 15,667 Dec 0.11 0.15 242.5 177.8 7.6 5.6 -2% 46%

UW Southern Copper Corp PCU US Peru USD De Angele 33.26 33.37 9.12 12.6 16.4 159.6 107.1 107.1 28,271 Dec 1.04 1.51 32.0 22.0 13.0 9.6 14% 50% N Vale ON VALE US Brazil USD De Angele 24.97 25.28 8.80 12.0 19.3 96.2 106.2 106.2 128,131 Dec 1.09 1.27 23.9 18.2 12.3 9.7 11% 46% N Vale PN VALE/P US Brazil USD De Angele 22.20 22.35 7.78 11.6 19.8 100.2 108.5 108.5 128,131 Dec 1.09 1.27 23.9 18.2 12.3 9.7 11% 46% Precious Metals North America N Agnico-Eagle Mines AEM US Canada USD Bridges 71.77 72.77 20.87 11.8 9.6 42.1 39.8 39.8 11,201 Dec 0.68 2.13 105.5 33.7 28.0 NM 11% 33% N Barrick Gold ABX US Canada USD Bridges 39.51 42.10 17.27 9.2 0.5 10.6 7.5 7.5 38,832 Dec 1.82 1.75 21.7 22.6 8.4 8.2 16% 44% N Coeur d'Alene CDE US US USD Bridges 23.04 23.50 3.60 21.8 21.5 73.2 161.8 161.8 1,737 Dec 0.14 0.34 164.6 67.8 14.6 8.6 12% 29% N Gold Reserve GRZ US US USD Bridges 0.93 1.25 0.24 6.9 38.8 52.5 -0.6 -0.6 55 Dec (0.09) (0.03) NM NM 24.6 (10.5) -65% NM N Goldcorp Inc GG US US USD Bridges 42.39 43.39 13.84 10.4 3.6 36.7 34.4 34.4 31,251 Dec 0.65 0.77 65.2 55.1 18.9 19.0 0% 51% N Kinross Gold KGC US US USD Bridges 22.87 23.65 6.85 10.6 4.9 41.2 24.2 24.2 15,893 Dec 0.52 0.62 44.0 36.9 12.4 11.3 -1% 47% OW Newmont Mining NEM US US USD Bridges 47.01 49.84 21.17 10.9 2.9 25.9 15.5 15.5 23,035 Dec 2.13 2.28 22.1 20.6 8.6 7.2 20% 37% UW Pan American Silver PAAS US US USD Bridges 25.93 27.42 11.12 16.7 9.1 37.7 29.8 12.0 2,262 Dec 0.65 0.64 39.9 40.5 10.3 10.7 -23% 40% OW Silver Wheaton SLW US US USD Bridges 13.77 14.17 2.51 14.8 16.9 112.2 112.2 112.2 4,685 Dec 0.37 0.50 37.2 27.5 19.6 13.8 1% 65% N Stillwater Mining SWC US US USD Bridges 7.78 8.35 1.76 21.8 10.5 83.1 57.5 57.5 735 Dec (0.16) (0.27) NM NM 11.9 14.8 0% 15% Europe/Africa N Lonmin plc LMI LN UK USD Shepherd 26.50 30.11 7.45 7.6 -7.1 -1.7 110.2 110.2 5,116 Sep (0.40) 0.71 NM 37.3 (94.2) 23.0 4% 1% OW Anglo American Platinum AMS SJ S.Africa ZAR Shepherd 71,400.00 76,820.00 35,000.00 8.3 3.5 19.2 37.9 6.2 23,201 Dec 1,060.00 2,260.00 67.4 31.6 28.8 15.7 58% 17% OW AngloGold Ashanti Limited ANG SJ S.Africa ZAR Shepherd 32,952.00 36,900.00 15,011.00 7.0 0.5 103.4 30.8 0.6 16,273 Dec (1,131.00) 2,420.00 NM 13.6 26.6 5.9 9% 16% UW Aquarius Platinum (SA) AQP SJ S.Africa USD Shepherd 3,546.00 4,250.00 1,524.98 6.8 0.7 28.4 48.8 14.5 2,233 Jun 0.07 0.33 NM NM (95.0) 7.9 -18% 22% UW DRDGold Ltd DRD SJ S.Africa ZAR Shepherd 567.00 955.00 286.00 4.0 -12.8 35.0 3.1 -20.7 293 Jun 28.00 33.50 20.3 16.9 8.0 3.2 -32% 14% OW Eastern Platinum Ltd. EPS SJ S.Africa USD Shepherd 434.00 625.00 202.00 4.6 7.2 -1.4 37.8 6.0 403 Dec NM 0.05 NM NM 13.2 4.7 -6% 20% OW Gold Fields Ltd GFI SJ S.Africa ZAR Shepherd 11,020.00 12,500.00 5,325.00 4.5 0.6 53.1 19.9 -7.7 10,596 Jun 525.00 657.50 21.0 16.8 5.9 4.8 11% 40% UW Harmony Gold Mining Co HAR SJ S.Africa ZAR Shepherd 8,675.00 13,285.00 6,199.00 5.4 -0.9 -0.3 -11.2 -31.7 5,042 Jun 288.50 376.50 30.1 23.0 9.1 7.9 -7% 26% N Impala Platinum Holdings IMP SJ S.Africa ZAR Shepherd 17,343.00 21,700.00 8,655.00 2.0 -9.2 29.4 28.5 -1.1 14,314 Jun 815.00 787.00 21.3 22.0 14.1 14.6 -3% 32% N Lonmin plc (LONJ.J) LON SJ S.Africa ZAR Shepherd 19,064.00 26,859.95 7,976.21 0.3 -10.5 -22.3 56.7 20.6 5,017 Sep (368.00) 612.00 NM 31.2 (82.1) 21.4 4% 1% OW Northam Platinum Ltd NHM SJ S.Africa ZAR Shepherd 3,350.00 4,400.00 1,650.00 4.4 -16.0 -0.7 62.6 25.1 1,646 Jun 157.00 173.00 21.3 19.4 14.6 12.6 -7% 27% OW Randgold Resources Ltd RRS LN UK USD Shepherd 74.78 76.07 19.00 10.7 4.2 93.5 73.8 73.8 6,201 Dec 1.02 1.34 73.3 55.8 18.6 15.0 -26% 35%

Asia/Australia N Zijin Mining Group Co Ltd 2899 HK China CNY Li 8.39 8.48 1.39 10.2 11.7 163.0 78.5 78.5 17,440 Dec 0.21 0.22 40.0 38.1 NM NM NM 41% UW Energy Resources of AUS ERA AU Australia AUD George 25.45 28.28 9.35 0.8 -1.1 89.9 33.9 72.8 4,399 Dec 0.87 1.72 29.4 14.8 16.2 8.6 -26% 46% OW Lihir Gold LGL AU Australia USD George 2.79 3.64 1.52 9.7 2.6 20.1 5.3 35.8 6,805 Dec (0.04) 0.11 NM 25.8 (122.7) 16.0 -16% -7% N Newcrest Mining NCM AU Australia AUD George 35.16 37.17 16.55 7.9 2.6 31.7 3.7 33.8 15,401 Jun 0.67 1.02 52.7 34.4 20.5 14.8 -3% 34% N Paladin Energy Ltd PDN AU Australia USD George 4.70 5.52 1.63 4.2 -4.1 86.5 89.5 144.4 3,054 Jun (0.32) 0.17 NM 27.0 8.2 17.7 67% NM Latin America N CDM Buenaventura BVN US Peru USD Bridges 38.50 39.44 9.00 13.8 26.3 72.0 93.3 93.3 10,612 Dec 2.09 2.09 18.4 18.4 7.4 7.6 -29% 36%

24






P/E (Calendarised)


Net Debt /

EBITDA Margin

Rating Company Ticker Country CCY Analyst 08 Oct-09 High Low 1 Wk 1 Mo 1 Yr YTD YTD (US$MM) Yr-end 09E 10E 09E 10E 09E 10E Capital 09E Steel North America OW AK Steel AKS US US USD Gambardella 19.44 24.27 5.20 6.0 -7.0 37.2 108.6 108.6 2,127 Dec (0.92) 1.74 NM 11.2 26.3 4.2 27% 2% N Allegheny Technologies ATI US US USD Gambardella 36.05 44.09 15.00 8.3 12.8 54.1 41.2 41.2 3,536 Dec 0.21 1.70 171.7 21.2 15.4 6.3 16% 6% OW Arcelor Mittal MT US US USD Gambardella 37.86 42.32 15.44 8.3 1.1 15.7 54.0 54.0 59,096 Dec (1.55) 3.40 NM 11.1 13.4 6.2 42% 10% N Carpenter Technology CRS US US USD Gambardella 24.50 26.30 11.72 8.3 8.6 16.7 19.3 19.3 1,079 Jun 0.86 NM 28.5 NM 7.1 NM -17% 9% OW Commercial Metals CMC US US USD Gambardella 18.17 21.29 6.25 4.8 -0.3 71.7 53.1 53.1 2,045 Aug 0.16 NM 113.6 NM 6.0 NM 44% 7% N Dynamic Materials BOOM US US USD Gambardella 19.08 23.17 4.95 2.7 13.0 5.9 -1.2 -1.2 246 Dec 0.68 1.00 28.1 19.1 15.5 12.0 31% 16% OW Gerdau Ameristeel GNA US US USD Gambardella 8.60 8.97 2.85 12.9 15.1 21.6 41.9 41.9 3,726 Dec (0.11) 1.10 NM 7.8 16.3 5.2 78% 8% N GrafTech International GTI US US USD Gambardella 14.82 15.88 3.55 9.5 2.3 70.5 78.1 78.1 1,784 Dec 0.44 1.10 33.7 13.5 14.3 7.0 2% 14% N Haynes International HAYN US US USD Gambardella 32.44 34.67 10.92 4.3 16.1 13.9 31.8 31.8 392 Sep (0.98) 1.36 NM 23.9 (17.7) 5.6 -27% 1% OW Nucor NUE US US USD Gambardella 45.53 51.08 25.25 1.3 0.3 40.5 -1.5 -1.5 14,327 Dec (0.82) 3.00 NM 15.2 57.2 6.8 22% 2% OW Steel Dynamics STLD US US USD Gambardella 15.64 18.56 5.18 6.5 -9.4 64.5 39.9 39.9 3,365 Dec (0.12) 1.72 NM 9.1 14.2 5.4 107% 19% OW U.S. Steel Corp X US US USD Gambardella 44.12 58.00 16.66 4.4 1.9 -17.3 18.6 18.6 6,324 Dec (11.58) 3.45 NM 12.8 (7.2) 5.1 42% -10% N Worthington Industries WOR US US USD Gambardella 13.68 16.42 6.99 2.8 -1.4 9.3 24.1 24.1 1,082 May 0.33 NM 41.5 NM 25.2 NM 22% 3% Europe/Africa UW Acerinox ACX SM Spain EUR Largey 14.26 15.44 7.94 -0.6 -3.6 27.7 26.3 33.8 5,260 Dec (0.92) 0.67 NM 21.3 (27.9) 9.5 42% -5% OW Evraz Group EVR LI Rus USD Vlasov 27.85 28.99 3.70 7.1 12.3 47.3 223.8 223.8 12,195 Dec 0.25 3.09 111.4 9.0 8.4 4.0 147% 16% OW Klöckner & Co. KCO GR Germany EUR Largey 17.57 18.17 4.82 18.2 4.6 68.6 65.2 75.0 1,729 Dec (2.85) 1.10 NM 16.0 (19.7) 7.1 18% -2% OW MMK MAGN RU Rus USD Vlasov 0.79 0.80 0.15 5.1 19.8 139.0 296.2 296.2 681 Dec NM NM NM NM 7.9 3.3 9% 17% N Novolipetsk Steel NLMK LI Rus USD Vlasov 2.75 2.75 0.63 15.5 15.5 111.5 139.1 139.1 16,481 Dec 0.11 1.42 25.0 1.9 11.4 6.2 10% 18% OW Outokumpu OUT1V FH Finland EUR Largey 13.25 15.67 6.33 6.0 -8.8 49.4 60.0 69.5 3,568 Dec (1.80) 1.15 NM 11.5 (16.2) 7.2 50% -7% OW Salzgitter SZG GR Germany EUR Largey 67.90 73.40 37.80 5.4 2.7 30.5 23.5 30.7 6,037 Dec (3.00) 5.67 NM 12.0 28.1 3.7 -17% 1% UW Severstal CHMF RU Rus USD Vlasov 7.80 7.96 2.08 -1.8 18.8 4.0 140.0 140.0 7,860 Dec (0.26) NM NM NM 8.5 5.4 32% 10% UW SSAB SSABA SS Sweden SEK Largey 87.50 108.25 49.60 7.4 7.7 -9.3 22.4 8.8 1,408 Dec (5.76) 4.10 NM 21.3 (31.6) 10.6 56% -6% N ThyssenKrupp TKA GR Germany EUR Largey 23.86 25.34 11.71 4.6 2.5 41.9 25.8 33.3 18,162 Sep (1.56) 1.30 NM 18.4 13.4 4.0 51% 3% N TMK TMKS LI Rus USD Vlasov 17.46 18.92 1.50 8.1 54.5 0.6 347.7 347.7 3,811 Dec 2.51 2.81 7.0 6.2 3.1 2.6 105% 20% N Voestalpine VOE AV Austria EUR Largey 24.95 26.59 9.07 3.1 10.3 60.9 65.9 75.7 6,198 Mar 0.83 0.80 30.1 31.2 7.5 7.3 81% 11% OW ArcelorMittal MT NA France EUR Largey 38.08 28.82 12.58 5.4 0.2 12.9 51.4 60.3 59,443 Dec (1.54) 3.21 NM 11.9 10.2 4.7 40% 10% Asia/Australia OW Angang Steel Co - A 000898 CH China CNY Li 11.34 19.30 5.26 -6.2 -16.4 59.7 63.2 63.1 12,350 Dec 0.25 0.83 45.4 13.7 11.2 8.2 57% 13% OW Angang Steel Co - H 347 HK China HKD Li 15.24 19.64 2.73 4.7 -5.7 160.5 75.8 75.8 12,350 Dec 0.25 0.83 61.0 18.4 2.2 1.1 46% 14% OW Baoshan Iron & Steel - A 600019 CH China CNY Li 6.46 10.33 4.26 -1.4 -12.8 7.3 39.2 39.2 16,572 Dec 0.46 0.64 14.0 10.1 4.6 3.6 41% 14% OW BlueScope Steel BSL AU Australia AUD Greenwood 3.01 5.05 1.68 0.0 1.3 -38.4 7.3 38.4 4,974 Jun 0.04 0.23 70.0 13.4 12.3 6.6 16% 5% N China Steel Corp 2002 TT Taiwan TWD Lai 30.05 32.70 18.41 -0.7 -2.0 8.8 35.7 33.0 12,244 Dec 0.87 1.67 34.5 18.0 2.6 1.3 26% 14% OW Maanshan Iron & Steel - A 600808 CH China CNY Li 4.17 7.13 3.12 -5.7 -13.8 10.3 29.1 29.1 4,714 Dec 0.15 0.35 27.8 11.9 6.9 4.7 46% 11% OW Maanshan Iron & Steel - H 323 HK China CNY Li 4.78 6.70 0.87 2.1 -7.4 149.0 73.2 73.2 4,714 Dec 0.15 0.35 31.9 13.7 1.7 0.9 47% 12% N OneSteel Limited OST AU Australia AUD Greenwood 3.17 4.01 1.40 2.6 -2.8 -13.6 40.8 81.6 3,809 Jun 0.21 0.28 15.4 11.4 8.6 6.6 26% 9% OW POSCO 005490 KS S.Korea KRW Park 481,000.0 525,000.00 234,500.00 -1.2 3.0 30.0 26.6 17.3 36,047 Dec 33,497.48 52,978.2 14.4 9.1 7.3 5.0 5% 19% N Sims Group Limited SGM AU Australia AUD Greenwood 21.18 29.15 10.68 -5.4 -10.7 -7.5 22.1 57.5 3,500 Jun (0.05) 1.32 NM 16.1 34.3 7.8 4% 3% N Steel Authority of India Ltd SAIL IN India INR Parekh 174.70 188.00 55.25 3.5 3.3 49.8 125.4 114.1 15,570 Mar 13.88 14.27 12.6 12.2 (0.9) (0.4) -28% 22% N Tata Steel Ltd TATA IN India INR Parekh 534.95 545.00 137.50 6.1 16.1 58.1 146.3 133.9 10,241 Mar 37.39 49.26 14.3 10.9 NM NM NM 9% OW Nippon Steel 5401 JT Japan JPY Kishimoto 327.00 407.00 233.00 2.2 -5.5 8.6 12.8 10.0 25,175 Mar 8.55 27.02 38.2 12.1 5.9 4.4 NM 10% OW Sumitomo Metal 5405 JT Japan JPY Kishimoto 228.00 291.00 160.00 2.7 -1.7 -7.7 5.1 2.5 12,393 Mar 1.85 13.91 123.2 16.4 6.5 4.7 NM 13% N Kobe Steel 5406 JT Japan JPY Kishimoto 158.00 204.00 109.00 1.3 -7.6 -4.2 -2.5 -4.9 5,567 Mar (12.61) 3.91 NM 40.4 2.9 2.5 NM 10% OW JFE Holdings 5411 JT Japan JPY Kishimoto 3,020.00 3,880.00 1,852.00 -2.9 -5.6 26.6 29.3 26.2 20,987 Mar 148.56 294.06 20.3 10.3 4.5 3.7 NM 14%

25






P/E (Calendarised)


Net Debt /

EBITDA Margin

Rating Company Ticker Country CCY Analyst 08 Oct-09 High Low 1 Wk 1 Mo 1 Yr YTD YTD (US$MM) Yr-end 09E 10E 09E 10E 09E 10E Capital 09E N Tokyo Steel 5423 JT Japan JPY Kishimoto 1,128.00 1,336.00 568.00 4.2 -5.9 37.4 21.0 18.1 1,978 Mar 75.27 31.21 15.0 36.1 6.7 5.7 NM 20% N Yamato Kogyo 5444 JT Japan JPY Kishimoto 2,570.00 3,090.00 1,697.00 2.4 -3.9 2.8 8.0 5.3 2,092 Mar 239.24 188.10 10.7 13.7 9.5 8.9 NM 14% OW Daido Steel 5471 JT Japan JPY Kishimoto 323.00 488.00 201.00 3.9 -10.8 -7.2 21.0 18.0 1,587 Mar (23.71) 10.95 NM 29.5 10.7 6.1 NM 4% Latin America N CSN SID US Brazil BRL De Angele 56.90 57.10 19.76 7.5 11.5 91.6 96.2 47.1 24,759 Dec 1.13 2.31 50.4 24.6 16.6 8.9 73% 26% OW Gerdau S.A. GGBR4 BZ Brazil BRL De Angele 25.90 25.95 10.43 12.1 14.1 75.0 72.0 29.0 19,702 Dec 1.12 2.09 23.1 12.4 13.5 6.3 57% 13% N Lupatech S.A. LUPA3 BZ Brazil BRL De Angele 27.00 33.00 13.38 3.9 14.8 21.6 15.3 -13.5 742 Dec 2.28 1.05 11.8 25.7 3.4 9.8 280% 20% OW Ternium TX US Luxembourg USD De Angele 27.51 28.38 4.55 9.0 9.4 175.7 221.0 221.0 5,515 Dec 2.76 2.14 10.0 12.9 11.7 4.8 14% 12% UW Usiminas USIM5 BZ Brazil BRL De Angele 48.90 50.13 18.65 6.7 6.7 84.5 84.4 38.3 13,860 Dec 1.33 3.45 36.8 14.2 17.5 7.1 39% 14% Summary Global Metals Indices

Aluminum 5.6 4.6 58.3 104.8 99.3 75,439 65.1 28.9 23.5 12.2 32% 15% Copper 13.3 14.2 127.0 222.6 206.8 94,318 60.1 43.8 9.0 6.9 26% 43% Nickel 3.8 2.0 112.5 128.2 93.7 7,122 0.0 0.0 -3.2 -3.4 -19% 15% Zinc 4.8 -36.0 -85.1 -84.2 194.3 3,550 209.2 20.2 8.8 8.3 -30% 22% Coal 3.6 6.6 99.8 109.4 105.6 150,649 22.0 19.3 6.6 6.2 42% 42% Gold 9.9 5.0 51.0 32.1 30.9 217,614 43.0 31.3 9.9 10.9 4% 38% PGM 5.3 -2.9 25.4 47.0 27.8 60,118 46.6 27.8 -1.7 15.7 23% 21% Diversified 6.8 8.1 44.5 73.9 83.6 844,030 22.8 18.5 9.1 7.5 11% 41% Steel 4.0 3.1 36.6 55.7 49.8 453,958 37.9 13.5 10.3 5.1 39% 12%

Non-ferrous Metals & Mining North America 13.8 15.1 41.9 177.0 162.9 99,410 24.6 16.5 10.9 6.5 45% 27% Europe 11.5 10.3 17.6 140.4 138.1 115,829 24.0 34.6 15.6 6.3 -32% 51% Africa 2.8 0.4 30.7 18.3 -9.0 188,126 13.2 13.2 7.7 7.0 -8% 36% Asia 0.6 0.6 40.4 43.5 41.3 163,999 33.6 22.3 0.8 1.1 17% 39% Australia 2.0 1.3 9.9 35.3 65.8 308,166 26.9 21.9 7.2 6.2 28% 34%

Latin America 11.8 19.0 112.3 112.9 112.4 300,200 38.7 27.5 11.9 9.9 10% 46% Global 6.4 7.6 47.1 75.9 77.6 1,175,729 28.2 21.6 9.2 7.5 15% 39%

Precious Metals North America 10.8 4.1 31.5 26.8 26.4 129,687 45.2 33.9 13.7 11.6 9% 44% Europe 7.6 -7.1 -1.7 110.2 110.2 5,116 0.0 37.3 -94.2 23.0 4% 1% Africa 5.9 -1.1 42.8 34.2 6.2 85,218 44.7 25.5 11.0 11.8 15% 23% Asia 3.8 4.3 60.4 29.1 29.1 17,440 40.0 38.1 0.0 0.0 0% 41% Australia 4.3 0.9 27.3 11.0 32.4 29,659 47.5 28.7 -14.3 14.5 -2% 25% Latin America 13.8 26.3 72.0 93.3 93.3 10,612 18.4 18.4 7.4 7.6 -29% 36% Global 8.2 2.8 37.3 31.6 25.1 277,732 43.7 30.6 7.2 12.0 8% 34%

Steel North America 6.9 1.6 22.9 43.0 43.0 99,128 100.5 12.1 18.7 6.1 40% 7% Europe 6.7 10.4 51.5 109.9 113.6 83,389 51.3 13.0 6.6 5.4 53% 9% Asia Pacific (ex Japan) 0.0 -1.6 28.4 38.5 37.3 137,086 26.3 12.4 6.1 3.8 21% 15% Japan 0.3 -1.7 3.5 5.2 4.3 69,779 47.4 15.7 5.6 4.3 0% 12% Latin America 8.8 11.1 91.4 96.0 53.8 64,577 35.2 17.7 15.3 7.4 58% 18% Global 4.0 3.1 36.6 55.7 49.8 453,958 37.9 13.5 10.3 5.1 39% 12%

26






P/E (Calendarised)


Net Debt /

EBITDA Margin

Rating Company Ticker Country CCY Analyst 08 Oct-09 High Low 1 Wk 1 Mo 1 Yr YTD YTD (US$MM) Yr-end 09E 10E 09E 10E 09E 10E Capital 09E Steel Producers

Integrated 3.8 2.7 36.2 59.0 52.3 395,539 36.5 13.4 9.3 5.0 40% 13% Minimill 0.1 -0.1 2.3 0.6 0.6 23,807 46.5 16.0 38.3 6.7 39% 7% Specialty 0.2 -0.3 3.5 3.5 4.0 33,872 60.1 16.7 1.7 6.1 29% 4%

Global J.P. Morgan Metals Coverage List (based on US$ returns) 6.5 6.1 55.6 80.0 1,907,419 32.2 20.8 9.2 7.5 21% 31%

Industry indices MSCI Metals & Mining 311.67 320.36 161.41 2.0 3.6 26.7 40.4 57.6 MSCI Industrials 109.67 114.37 69.67 -1.5 1.9 3.4 14.9 18.7

Equity Indices MSCI World 795.38 808.85 527.42 -0.5 2.5 4.5 17.3 22.0 Dow 9786.87 9917.99 6469.95 2.9 3.0 5.7 11.5 11.5 Nasdaq 1717.79 1754.54 1018.86 3.1 3.8 29.1 41.8 41.8 S&P 500 Composite 1065.48 1080.15 666.79 3.5 3.9 8.2 18.0 18.0 S&P/TSX Composite 11484.51 11648.55 7479.96 3.7 3.4 14.2 27.8 10.3 Nikkei 225 9832.47 10767.00 6994.90 -1.5 -4.7 7.4 11.0 8.3 MSCI Asia Ex-Japan 542.10 549.41 290.97 0.5 1.4 42.2 54.8 59.9

FTSE 100 5154.64 5190.00 3460.71 2.1 4.2 18.0 16.2 28.0 FTSE EuroTop 100 2122.36 2167.57 1384.52 1.9 2.0 4.8 18.0 24.9 CAC 40 3806.81 3856.67 2465.46 2.3 4.0 8.9 18.3 25.3 ASX 300 Index (Australia) 4767.60 4778.60 3109.90 1.4 5.4 10.9 28.7 66.0 JSE ASI (Jo'burg) 25528.40 26067.97 17770.97 2.2 1.2 21.8 18.7 -8.7 KOSPI (Korea) 1615.46 1723.17 892.16 -3.4 0.5 24.8 43.7 33.1 Taiwan SE 100 7503.31 7635.66 3955.43 -0.6 3.5 46.2 63.4 60.2 Ibovespa (Brazil) 63759.87 63816.30 29435.11 5.5 10.2 65.2 69.8 27.3 AMEX Gold Bugs 449.61 457.05 150.27 13.1 9.0 50.1 48.7 48.7 FTSE Gold Mines Index 3237.07 3237.07 1156.45 10.6 5.1 53.2 36.6 36.6

Source: Bloomberg and J.P. Morgan estimates Note: J.P. Morgan ratings: OW = Overweight; N = Neutral; UW = Underweight

27



Table 5: Stock Tickers of J.P. Morgan Metals & Mining Coverage Companies Aluminum Gold Diversified Alcoa AA US Agnico-Eagle Mines AEM US African Rainbow Minerals Ltd ARI SJ GrafTech International GTI US Alumina Limited AWC AU AngloGold Ashanti Limited ANG SJ Anglo American AAL LN Haynes International HYNI US Aluminum Corporation of China Limited 2600 HK Barrick Gold ABX CN Anglo American (AGLJ.J) AGL SJ Jindal SAW JSAW IN Century Aluminum Company CENX US Coeur d'Alene CDE US BHP Billiton BLT LN Klöckner & Co. KCO GR Hindalco Industries HNDL IN Compania de Minas Buenaventura BVN US BHP Billiton (BILJ.J) BIL SJ Lupatech S.A. LUPA3 BZ National Aluminium Co Ltd NACL IN DRDGold Ltd DRD SJ BHP Billiton Limited BHP AU Maanshan Iron and Steel - A 600808 CH Sterlite Industries STLT IN Gold Fields Ltd GFI SJ Boliden BOL SS Maanshan Iron and Steel - H 323 HK Gold Reserve GRZ US Cleveland-Cliffs CLF US MMK MAGN RU Copper Goldcorp Inc GG US CVRD ON RIO US Monnet Ispat & Energy Limited MISP IN Southern Copper Corp PCU US Harmony Gold Mining Co Ltd HAR SJ CVRD PN RIO-P Norsk Hydro NHY NO Freeport-McMoRan Copper & Gold FCX US Hochschild HOC LN Fortescue Metals Group Ltd FMG AU Novolipetsk Steel NLMK LI Teck Cominco Ltd. TCK/B CN Kinross Gold KGC US Highveld Steel and Vanadium HVL SJ Nucor NUE US Lihir Gold LGL AU Iluka Resources ILU AU OneSteel Limited OST AU Nickel Newcrest Mining NCM AU Kazakhmys Plc KAZ LN Outokumpu OUT1V FH PT International Nickel Indonesia INCO IJ Newmont Mining NEM US Rio Tinto Limited RIO AU POSCO 005490 KS PT Aneka Tambang Tbk ANTM IJ Pan American Silver PAAS US Vedanta Resources VED LN Salzgitter SZG GR Randgold Resources Ltd RRS LN Xstrata XTA LN Severstal CHMF RU Zinc Silver Wheaton SLW US Sims Group Limited SGM AU OZ Minerals OZL AU Zijin Mining Group Co Ltd 2899 HK SSAB SSABA SS Steel Authority of India Ltd SAIL IN Coal Steel Dynamics STLD US Arch Coal ACI US PGM Steel Tata Steel Ltd TATA IN Banpu Public BANPU TB Anglo American Platinum Corporation Ltd ANP LN Acerinox ACX SM Tenaris SA TS US Bumi Resources BUMI IJ Aquarius Platinum Limited (SA) AQP SJ AK Steel AKS US Ternium TX US Centennial Coal Company CEY AU Energy Resources of Australia Limited ERA AU Allegheny Technologies ATI US ThyssenKrupp TKA GR China Coal Energy 1898 HK Impala Platinum Holdings Ltd IMP SJ Angang Steel Company Limited - A 000898 CH TMK TMKS LI China Shenhua Energy 1088 HK Lonmin plc LMI LN Angang Steel Company Limited - H 347 HK U.S. Steel Corp X US CONSOL Energy CNX US Lonmin plc (LONJ.J) LMI LN Arcelor Mittal MT US Usiminas USIM5 BZ Exxaro Resources Ltd EXX SJ Northam Platinum Ltd NHM SJ Baoshan Iron & Steel - A 600019 CH Voestalpine VOE AV International Coal Group ICO US Paladin Energy Ltd PDN AU BlueScope Steel BSL AU Worthington Industries WOR US Massey Energy MEE US Stillwater Mining SWC US Carpenter Technology CRS US Nippon Steel 5401 JT Peabody Energy BTU US Barrick Gold ABX CN China Steel Corp 2002 TT Sumitomo Metal 5405 JT Raspadskaya RASP RU Commercial Metals CMC US Kobe Steel 5406 JT Rentech Inc. RTK US CSN SID US JFE Holdings 5411 JT Tambang Batubara Bukit Asam PTBA IJ Dynamic Materials BOOM US Tokyo Steel 5423 JT Yanzhou Coal Mining - A 600188 CH Gerdau Ameristeel GNA US Yamato Kogyo 5444 JT Yanzhou Coal Mining - H 1171 HK Evraz Group EVR LI Daido Steel 5471 JT Teck Cominco Ltd. TCK/B CN Source: J.P. Morgan

28



29



Companies Recommended in This Report (all prices in this report as of market close on 08 October 2009, unless otherwise indicated) Alcoa (AA/$14.35/Overweight), BHP Billiton Limited (BHP.AX/A$37.85 [09-October-2009]/Underweight), Bumi Resources (BUMI.JK/Rp2,900 [09-October-2009]/Neutral), Grupo Mexico (GMEXICOB.MX/Ps26.67/Overweight), Klöckner & Co. (KCOGn.DE/€17.57/Overweight), Norsk Hydro (NHY.OL/Nkr 42.50/Neutral), Nucor Corp. (NUE/$45.53/Overweight), Randgold Resources Ltd (RRS.L/4,653p/Overweight), Southern Copper Corporation (PCU/$33.26/Underweight), Steel Authority of India Ltd (SAIL.BO/Rs174.00 [09-October-2009]/Neutral), Teck Resources (TCKb.TO/C$32.41/Overweight), Thompson Creek Metals (TC/$12.66/Overweight), Vale ON (VALE/$24.97/Neutral), Vale PN (VALEp/$22.20/Neutral)

Analyst Certification: The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.

In compliance with Instruction 388 dated April 30, 2003, issued by CVM - Comissão de Valores Mobiliários (the Brazilian securities commission), which regulates analyst's activities and certification, and except as otherwise already specifically provided for in any previous disclaimer herein, the Brazilian primary analyst signing the present report declares that: (1) all the views expressed herein accurately reflect his or her personal views about the securities and issuers described herein. All recommendations issued by him or her were independently produced; (2) to the best of his or her knowledge, he or she does not maintain any relationship with any person who works for the subject companies whose securities are mentioned in the present report; (3) to the best of his or her knowledge, Banco J.P. Morgan S.A. and/or funds, portfolios and securities investment clubs managed by such mentioned entity do not own, directly or indirectly, 1% or more of the total capital stock of the subject companies and is not involved in the acquisition, sale or acting as intermediary of such securities in the market; (4) he or she does not own, directly or indirectly, securities of the subject companies in an amount equivalent or superior to 5% of his or her net worth and he or she is not involved in the acquisition, sale or acting as intermediary of such securities in the market; (5) neither the analyst nor Banco J.P. Morgan S.A , to the best of his or her knowledge, receive any compensation for services rendered or maintain any commercial relationship with any of the subject companies or any individual, legal entity, fund or communion of rights which represents the same interests of the companies; (6) no part of the research analyst compensation was, is, or will be directly or indirectly related to the pricing of any of the securities issued by any of the subject companies and, part of the analyst's compensation may come from the profits of Banco J.P. Morgan S.A. and/or its subsidiaries and, consequently, revenues arisen from transactions held by Banco J.P. Morgan S.A. and/or its subsidiaries.

Important Disclosures

• Market Maker/ Liquidity Provider: JPMSL and/or an affiliate is a market maker and/or liquidity provider in Klöckner & Co., Norsk Hydro.

• Designated Sponsor: JPMSL is the appointed designated sponsor to Klöckner & Co.. • Lead or Co-manager: JPMSI or its affiliates acted as lead or co-manager in a public offering of equity and/or debt securities for

Klöckner & Co., Teck Resources, Vale ON, Vale PN within the past 12 months. • Director: A senior employee, executive officer or director of JPMorgan Chase & Co. , JPMSI, and/or its affiliates is a director

and/or officer of BHP Billiton Limited. • Beneficial Ownership (1% or more): JPMSI or its affiliates beneficially own 1% or more of a class of common equity securities of

Steel Authority of India Ltd.

30



• Client of the Firm: Alcoa is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services. BHP Billiton Limited is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company non-investment banking securities-related services and non-securities-related services. Bumi Resources is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services. Grupo Mexico is or was in the past 12 months a client of JPMSI. Klöckner & Co. is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services. Norsk Hydro is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company non-investment banking securities-related services and non-securities-related services. Nucor Corp. is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services. Randgold Resources Ltd is or was in the past 12 months a client of JPMSI. Southern Copper Corporation is or was in the past 12 months a client of JPMSI. Steel Authority of India Ltd is or was in the past 12 months a client of JPMSI. Teck Resources is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services. Thompson Creek Metals is or was in the past 12 months a client of JPMSI. Vale ON is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services. Vale PN is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services, non-investment banking securities-related services and non-securities-related services.

• Investment Banking (past 12 months): JPMSI or its affiliates received in the past 12 months compensation for investment banking services from Alcoa, Bumi Resources, Klöckner & Co., Nucor Corp., Teck Resources, Vale ON, Vale PN.

• Investment Banking (next 3 months): JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment banking services in the next three months from Alcoa, BHP Billiton Limited, Bumi Resources, Klöckner & Co., Norsk Hydro, Nucor Corp., Teck Resources, Vale ON, Vale PN.

• Non-Investment Banking Compensation: JPMSI has received compensation in the past 12 months for products or services other than investment banking from Alcoa, BHP Billiton Limited, Norsk Hydro, Nucor Corp., Teck Resources, Vale ON, Vale PN. An affiliate of JPMSI has received compensation in the past 12 months for products or services other than investment banking from Alcoa, BHP Billiton Limited, Norsk Hydro, Nucor Corp., Southern Copper Corporation, Thompson Creek Metals, Vale ON, Vale PN.

• Broker: An affiliate of J.P. Morgan Securities Ltd. acts as Corporate Broker to BHP Billiton Limited.

0

17

34

51

68

85

Price($)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Alcoa (AA) Price Chart

OW $12 OW $22

N $8 OW $14

N N $11.5 OW $13.5

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered itover the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Date Rating Share Price ($)

Price Target ($)

11-Jun-08 N 42.72 -- 19-Nov-08 N 9.48 11.50 11-Dec-08 N 10.20 8.00 19-Mar-09 OW 5.48 12.00 01-Jul-09 OW 10.33 13.50 09-Jul-09 OW 9.46 14.00 28-Jul-09 OW 11.30 22.00

31



0

14

28

42

56

70

84

Price(A$)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

BHP Billiton Limited (BHP.AX) Price Chart

OW A$47 N A$26.5 N A$25.62N A$30.38

OW A$43 N A$27.5N A$25.87N A$23.07UW A$30.827

OW A$40 OW A$37 N A$24.4N A$26.15N A$31.46

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Break in coverage Jul 07, 2004 - Nov 18, 2004. This chart shows J.P. Morgan's continuing coverage of this stock; thecurrent analyst may or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Date Rating Share Price (A$)

Price Target (A$)

10-Jul-07 OW 38.83 40.00 18-Sep-07 OW 38.82 43.00 26-Oct-07 OW 44.74 47.00 01-Dec-08 OW 31.00 37.00 21-Jan-09 N 28.95 27.50 04-Feb-09 N 29.78 26.50 07-Apr-09 N 34.00 24.40 22-Apr-09 N 31.56 25.87 26-May-09 N 33.87 25.62 29-May-09 N 34.02 26.15 22-Jul-09 N 36.19 23.07 28-Jul-09 N 37.85 30.38 12-Aug-09 N 37.60 31.46 17-Sep-09 UW 39.00 30.83

0

2,484

4,968

7,452

9,936

12,420

14,904

Price(Rp)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Bumi Resources (BUMI.JK) Price Chart

OW Rp1,570OW Rp2,900 OW Rp7,700OW Rp10,400 N Rp2,100

OW Rp1,120 OW Rp3,000OW Rp5,800 OW Rp8,000 UW Rp580

OW Rp960 OW Rp2,200OW Rp3,400 OW Rp8,300OW Rp8,500 UW Rp620 N Rp3,200


Date Rating Share Price (Rp)

Price Target (Rp)

08-Dec-06 OW 860 960 13-Feb-07 OW 1040 1120 04-Apr-07 OW 1330 1570 15-Jun-07 OW 1890 2200 09-Jul-07 OW 2775 3000 08-Aug-07 OW 2350 2900 11-Sep-07 OW 2925 3400 31-Oct-07 OW 4450 5800 30-Jan-08 OW 6600 7700 13-Mar-08 OW 6300 8300 08-Apr-08 OW 5700 8000 16-May-08 OW 7700 10400 01-Aug-08 OW 6750 8500 07-Jan-09 UW 850 620 17-Mar-09 UW 770 580 04-Jun-09 N 2175 2100 02-Oct-09 N 3125 3200

32



0

11

22

33

44

55

Price(Ps)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Grupo Mexico (GMEXICOB.MX) Price Chart

OW Ps31.5

OW Ps26.5

N Ps14.5 N Ps26.5

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Break in coverage Aug 25, 2005 - Nov 18, 2008. This chart shows J.P. Morgan's continuing coverage of this stock; thecurrent analyst may or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Date Rating Share Price (Ps)

Price Target (Ps)

18-Nov-08 N 8.37 14.50 28-Jul-09 N 16.77 26.50 19-Aug-09 OW 20.17 26.50 09-Oct-09 OW 26.67 31.50

0

19

38

57

76

95

Price(€)

Sep06

Dec06

Mar07

Jun07

Sep07

Dec07

Mar08

Jun08

Sep08

Dec08

Mar09

Jun09

Sep09

Klöckner & Co. (KCOGn.DE) Price Chart

OW €35 OW €55 OW €36 N €14 N €17

OW €32 OW €52 N €36 OW €47 N €15 N €11 OW €24

OW €31 OW €45 N €26 OW €42 OW €22 N €10 N €22

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Break in coverage Jan 05, 2008 - Jan 11, 2008. This chart shows J.P. Morgan's continuing coverage of this stock; thecurrent analyst may or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Date Rating Share Price (€)

Price Target (€)

16-Oct-06 OW 20.62 31.00 07-Dec-06 OW 23.65 32.00 18-Jan-07 OW 29.36 35.00 27-Mar-07 OW 35.58 45.00 23-Apr-07 OW 39.79 52.00 11-May-07 OW 42.35 55.00 11-Jan-08 N 19.13 26.00 08-Feb-08 N 23.62 36.00 11-Feb-08 OW 23.64 36.00 03-Apr-08 OW 29.37 42.00 16-May-08 OW 32.18 47.00 23-Oct-08 OW 10.04 22.00 19-Dec-08 N 9.32 15.00 02-Feb-09 N 9.48 14.00 01-Apr-09 N 6.43 10.00 15-May-09 N 9.56 11.00 25-Jun-09 N 12.07 17.00 14-Aug-09 N 16.45 22.00 08-Oct-09 OW 16.00 24.00

33



0

25

50

75

100

125

150

Price(NKr)

Sep06

Dec06

Mar07

Jun07

Sep07

Dec07

Mar08

Jun08

Sep08

Dec08

Mar09

Jun09

Sep09

Norsk Hydro (NHY.OL) Price Chart

OW NKr92.394 OW NKr91

N NKr205 OW NKr90.54 OW NKr92 UW NKr21 N NKr46

N NKr210 N NKr249 OW NKr90 UW NKr18 UW NKr33


Date Rating Share Price (NKr)

Price Target (NKr)

21-Dec-06 N 62.20 210.00 23-Jan-07 N 61.47 205.00 17-Jul-07 N 80.13 249.00 04-Oct-07 OW 73.60 90.54 29-Oct-07 OW 82.60 92.39 25-Jan-08 OW 57.90 90.00 03-Mar-08 OW 74.10 92.00 23-Apr-08 OW 73.90 91.00 24-Feb-09 UW 22.85 18.00 15-Apr-09 UW 28.00 21.00 25-Aug-09 UW 38.15 33.00 09-Oct-09 N 42.50 46.00

0

23

46

69

92

115

138

Price($)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Nucor Corp. (NUE) Price Chart

OW $53.5

OW $100 OW $51 OW $55

OW $71 OW $82 OW $59 OW $50



Price Target ($)

03-Aug-07 OW 50.77 71.00 14-Mar-08 OW 72.47 82.00 04-Jun-08 OW 74.45 100.00 17-Oct-08 OW 31.79 59.00 10-Dec-08 OW 40.98 51.00 28-Jan-09 OW 39.80 53.50 23-Apr-09 OW 44.07 50.00 23-Jul-09 OW 44.28 55.00

34



0

1,195

2,390

3,585

4,780

5,975

7,170

Price(p)

Sep06

Dec06

Mar07

Jun07

Sep07

Dec07

Mar08

Jun08

Sep08

Dec08

Mar09

Jun09

Sep09

Randgold Resources Ltd (RRS.L) Price Chart

OW 1,340p OW 1,920p OW 3,910p

OW 1,420pOW 1,460p OW 1,580p OW 3,600p

OW 1,490pOW 1,520p OW 1,430p OW 2,680pOW 2,420p OW 2,510p OW 4,090pOW 5,150p


Date Rating Share Price (p)

Price Target (p)

05-Oct-06 OW 1024 1490 23-Oct-06 OW 1121 1420 21-Nov-06 OW 1148 1340 12-Dec-06 OW 1187 1520 08-Mar-07 OW 1180 1460 17-Jul-07 OW 1143 1430 13-Sep-07 OW 1399 1580 13-Dec-07 OW 1780 1920 28-Feb-08 OW 2640 2680 20-Jun-08 OW 2001 2420 10-Nov-08 OW 1958 2510 17-Feb-09 OW 3253 3600 06-Mar-09 OW 3261 3910 13-May-09 OW 3869 4090 03-Sep-09 OW 3689 5150

0

16

32

48

64

80

Price($)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Southern Copper Corporation (PCU) Price Chart

UW $27.5

UW $30.3 UW $16.8 UW $23

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Break in coverage Aug 25, 2005 - Mar 14, 2008. This chart shows J.P. Morgan's continuing coverage of this stock; thecurrent analyst may or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.


Price Target ($)

14-Mar-08 UW 37.19 30.30 18-Nov-08 UW 12.10 16.80 28-Jul-09 UW 25.57 23.00 09-Oct-09 UW 33.26 27.50

35



0

78

156

234

312

390

468

Price(Rs)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Steel Authority of India Ltd (SAIL.BO) Price Chart

OW Rs81

OW Rs147 OW Rs135

OW Rs125 OW Rs291 OW Rs195 OW Rs90 N Rs160

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Initiated coverage Jan 10, 2007. This chart shows J.P. Morgan's continuing coverage of this stock; the current analystmay or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Date Rating Share Price (Rs)

Price Target (Rs)

10-Jan-07 OW 84.90 125.00 11-Apr-07 OW 117.70 147.00 31-Oct-07 OW 261.05 291.00 22-Jul-08 OW 125.65 195.00 16-Oct-08 OW 104.20 135.00 20-Nov-08 OW 58.95 81.00 29-Jan-09 OW 80.95 90.00 02-Jun-09 N 175.50 160.00

0

18

36

54

72

90

Price(C$)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Teck Resources (TCKb.TO) Price Chart

OW C$8 OW C$14OW C$33

OW C$19 OW C$10OW C$22

OW C$28 OW C$6.5OW C$18.5


Date Rating Share Price (C$)

Price Target (C$)

23-Oct-08 OW 14.32 28.00 19-Nov-08 OW 6.12 19.00 11-Dec-08 OW 4.83 8.00 18-Feb-09 OW 4.44 6.50 03-Apr-09 OW 8.14 10.00 21-Apr-09 OW 9.11 14.00 21-May-09 OW 15.91 18.50 01-Jul-09 OW 18.55 22.00 28-Jul-09 OW 26.28 33.00

36



0

11

22

33

44

Price($)

Oct06

Jan07

Apr07

Jul07

Oct07

Jan08

Apr08

Jul08

Oct08

Jan09

Apr09

Jul09

Oct09

Thompson Creek Metals (TC) Price Chart

OW $15.5

OW $10

OW $7.5OW $23

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Initiated coverage Apr 27, 2009. This chart shows J.P. Morgan's continuing coverage of this stock; the current analystmay or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.


Price Target ($)

27-Apr-09 OW 6.21 7.50 05-May-09 OW 7.68 10.00 09-Jun-09 OW 9.74 15.50 21-Jul-09 OW 12.68 23.00

0

15

30

45

60

75

Price($)

Sep06

Dec06

Mar07

Jun07

Sep07

Dec07

Mar08

Jun08

Sep08

Dec08

Mar09

Jun09

Sep09

Vale ON (VALE) Price Chart

OW $23.3 N $31.5 OW $23.4

OW $19.8 OW $31.5 OW $30.68 N $24.5

OW $17.8 OW $27.9 OW $46.1 OW $47.5 N $18.5 N $23.5

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Break in coverage Dec 30, 2001 - Feb 12, 2002, and Aug 25, 2005 - Dec 22, 2006. This chart shows J.P. Morgan'scontinuing coverage of this stock; the current analyst may or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.


Price Target ($)

22-Dec-06 OW 14.59 17.80 07-Feb-07 OW 17.32 19.80 17-Apr-07 OW 20.95 23.30 09-Jul-07 OW 24.02 27.90 14-Sep-07 OW 27.50 31.50 03-Oct-07 N 35.45 31.50 11-Apr-08 OW 36.36 46.10 02-Sep-08 OW 26.55 47.50 16-Oct-08 OW 11.14 30.68 19-Nov-08 OW 11.09 23.40 20-Feb-09 N 14.72 18.50 03-Aug-09 N 20.77 23.50 08-Oct-09 N 24.41 24.50

37



0

13

26

39

52

65

Price($)

Sep06

Dec06

Mar07

Jun07

Sep07

Dec07

Mar08

Jun08

Sep08

Dec08

Mar09

Jun09

Sep09

Vale PN (VALEp) Price Chart

OW $27.9 OW $20.5

OW $24.7 OW $26.912 N $21.5

OW $34.17 N $27.9 OW $39 OW $40.3 N $16 N $20.5

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.Break in coverage Dec 30, 2001 - Feb 12, 2002, and Aug 25, 2005 - May 31, 2006. This chart shows J.P. Morgan'scontinuing coverage of this stock; the current analyst may or may not have covered it over the entire period.J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.


Price Target ($)

17-Apr-07 OW 17.54 34.17 09-Jul-07 OW 20.31 24.70 14-Sep-07 OW 23.23 27.90 03-Oct-07 N 30.05 27.90 11-Apr-08 OW 30.46 39.00 02-Sep-08 OW 23.77 40.30 16-Oct-08 OW 10.39 26.91 19-Nov-08 OW 10.12 20.50 20-Feb-09 N 12.37 16.00 03-Aug-09 N 18.15 20.50 08-Oct-09 N 21.64 21.50

Explanation of Equity Research Ratings and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] The analyst or analyst’s team’s coverage universe is the sector and/or country shown on the cover of each publication. See below for the specific stocks in the certifying analyst(s) coverage universe.

Coverage Universe: Michael F. Gambardella: AK Steel (AKS), Alcoa (AA), Allegheny Technologies (ATI), Arcelor Mittal (MT), Carpenter Technology (CRS), Century Aluminum Company (CENX), Cliffs Natural Resources (CLF), Commercial Metals (CMC), Dynamic Materials (BOOM), Freeport-McMoRan Copper & Gold (FCX), Gerdau Ameristeel (GNA), Globe Specialty Metals (GSM), GrafTech International (GTI), Haynes International (HAYN), Nucor Corp. (NUE), Steel Dynamics (STLD), Teck Resources (TCKb.TO), Thompson Creek Metals (TC), U.S. Steel Corp (X), Worthington Industries (WOR)

Jeffrey Largey: Acerinox (ACX.MC), ArcelorMittal (ISPA.AS), Klöckner & Co. (KCOGn.DE), Norsk Hydro (NHY.OL), Outokumpu (OUT1V.HE), SSAB (SSABa.ST), Salzgitter (SZGG.DE), ThyssenKrupp (TKAG.DE), Voestalpine (VOES.VI), Xstrata (XTA.L)

Frank Li: Aluminum Corporation of China Limited (2600.HK), Angang Steel Company Limited - A (000898.SZ), Angang Steel Company Limited - H (0347.HK), Baoshan Iron & Steel - A (600019.SS), Brilliance China Automotive (1114.HK), China Coal Energy (1898.HK), China Shenhua Energy (1088.HK), Denway Motors (0203.HK), DongFeng Motor Co., Ltd. (0489.HK), Great Wall Motor Company Limited (2333.HK), Maanshan Iron and Steel - A (600808.SS), Maanshan Iron and Steel - H (0323.HK), Minth Group (0425.HK), Qingling Motors Co (1122.HK), Shougang Concord International (0697.HK), Sinotruk (3808.HK), WSP Holdings (WH), Weichai Power (2338.HK), Yanzhou Coal Mining - A (600188.SS), Yanzhou Coal Mining - H (1171.HK), Zijin Mining Group Co Ltd (2899.HK)

Steve Shepherd: Anglo American Platinum Corporation Ltd (AMSJ.J), AngloGold Ashanti Limited (ANGJ.J), Aquarius Platinum Limited (AQP.L), Aquarius Platinum Limited (SA) (AQPJ.J), DRDGold Ltd (DRDJ.J), Eastern Platinum Ltd. (EPSJ.J), Gold Fields Ltd (GFIJ.J), Harmony Gold Mining Co Ltd (HARJ.J), Impala Platinum Holdings Ltd (IMPJ.J), Lonmin plc (LMI.L), Lonmin plc (LONJ.J) (LONJ.J), Northam Platinum Ltd (NHMJ.J), Randgold Resources Ltd (RRS.L)

38



Rodolfo R. De Angele, CFA: Bradespar (BRAP4.SA), CSN (SID), Gerdau S.A. (GGBR4.SA), Grupo Mexico (GMEXICOB.MX), Lupatech S.A. (LUPA3.SA), Southern Copper Corporation (PCU), Tenaris SA (TS), Ternium (TX), Usiminas (USIM5.SA), Vale ON (VALE), Vale PN (VALEp)

John Bridges CFA, ACSM: Agnico-Eagle Mines (AEM), Arch Coal (ACI), Barrick Gold (ABX), CONSOL Energy (CNX), Coeur d'Alene (CDE), Compania de Minas Buenaventura (BVN), Gold Reserve (GRZ), Goldcorp Inc (GG), International Coal Group (ICO), Kinross Gold (KGC), Massey Energy (MEE), Newmont Mining (NEM), Pan American Silver (PAAS), Peabody Energy (BTU), Rentech Inc. (RTK), Silver Wheaton (SLW), Stillwater Mining (SWC)

David George: Alumina Limited (AWC.AX), BHP Billiton Limited (BHP.AX), Centennial Coal Company (CEY.AX), Energy Resources of Australia Limited (ERA.AX), Fortescue Metals Group Ltd (FMG.AX), Iluka Resources (ILU.AX), Lihir Gold (LGL.AX), Newcrest Mining (NCM.AX), OZ Minerals Limited (OZL.AX), Paladin Energy Ltd (PDN.AX), Rio Tinto Limited (RIO.AX)

J.P. Morgan Equity Research Ratings Distribution, as of September 30, 2009

Overweight (buy)

Neutral (hold)

Underweight (sell)

JPM Global Equity Research Coverage 39% 46% 15% IB clients* 56% 57% 42% JPMSI Equity Research Coverage 38% 51% 10% IB clients* 76% 72% 56%

*Percentage of investment banking clients in each rating category. For purposes only of NASD/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category.

Valuation and Risks: Please see the most recent company-specific research report for an analysis of valuation methodology and risks on any securities recommended herein. Research is available at http://www.morganmarkets.com , or you can contact the analyst named on the front of this note or your J.P. Morgan representative.

Analysts’ Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which include revenues from, among other business units, Institutional Equities and Investment Banking.

Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US affiliates of JPMSI, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMSI, and may not be subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account.

Other Disclosures

J.P. Morgan is the global brand name for J.P. Morgan Securities Inc. (JPMSI) and its non-US affiliates worldwide.

Options related research: If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation’s Characteristics and Risks of Standardized Options, please contact your J.P. Morgan Representative or visit the OCC’s website at http://www.optionsclearing.com/publications/risks/riskstoc.pdf.

Legal Entities Disclosures U.S.: JPMSI is a member of NYSE, FINRA and SIPC. J.P. Morgan Futures Inc. is a member of the NFA. JPMorgan Chase Bank, N.A. is a member of FDIC and is authorized and regulated in the UK by the Financial Services Authority. U.K.: J.P. Morgan Securities Ltd. (JPMSL) is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority. Registered in England & Wales No. 2711006. Registered Office 125 London Wall, London EC2Y 5AJ. South Africa: J.P. Morgan Equities Limited is a member of the Johannesburg Securities Exchange and is regulated by the FSB. Hong Kong: J.P. Morgan Securities (Asia Pacific) Limited (CE number AAJ321) is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission in Hong Kong. Korea: J.P. Morgan Securities (Far East) Ltd, Seoul branch, is regulated by the Korea Financial Supervisory Service. Australia: J.P. Morgan Australia Limited (ABN 52 002 888 011/AFS Licence No: 238188) is regulated by ASIC and J.P. Morgan Securities Australia Limited (ABN 61 003 245 234/AFS Licence No: 238066) is a Market Participant with the ASX and regulated by ASIC. Taiwan: J.P.Morgan Securities (Taiwan) Limited is a participant of the Taiwan Stock Exchange (company-type) and regulated by the Taiwan Securities and Futures Bureau. India: J.P. Morgan India Private Limited is a member of the National Stock Exchange of India Limited and Bombay Stock Exchange Limited and is regulated by the Securities and Exchange Board of

http://www.morganmarkets.com/

39



India. Thailand: JPMorgan Securities (Thailand) Limited is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Indonesia: PT J.P. Morgan Securities Indonesia is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM. Philippines: J.P. Morgan Securities Philippines Inc. is a member of the Philippine Stock Exchange and is regulated by the Securities and Exchange Commission. Brazil: Banco J.P. Morgan S.A. is regulated by the Comissao de Valores Mobiliarios (CVM) and by the Central Bank of Brazil. Mexico: J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P. Morgan Grupo Financiero is a member of the Mexican Stock Exchange and authorized to act as a broker dealer by the National Banking and Securities Exchange Commission. Singapore: This material is issued and distributed in Singapore by J.P. Morgan Securities Singapore Private Limited (JPMSS) [MICA (P) 132/01/2009 and Co. Reg. No.: 199405335R] which is a member of the Singapore Exchange Securities Trading Limited and is regulated by the Monetary Authority of Singapore (MAS) and/or JPMorgan Chase Bank, N.A., Singapore branch (JPMCB Singapore) which is regulated by the MAS. Malaysia: This material is issued and distributed in Malaysia by JPMorgan Securities (Malaysia) Sdn Bhd (18146-X) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets Services License issued by the Securities Commission in Malaysia. Pakistan: J. P. Morgan Pakistan Broking (Pvt.) Ltd is a member of the Karachi Stock Exchange and regulated by the Securities and Exchange Commission of Pakistan. Saudi Arabia: J.P. Morgan Saudi Arabia Ltd. is authorised by the Capital Market Authority of the Kingdom of Saudi Arabia (CMA) to carry out dealing as an agent, arranging, advising and custody, with respect to securities business under licence number 35-07079 and its registered address is at 8th Floor, Al-Faisaliyah Tower, King Fahad Road, P.O. Box 51907, Riyadh 11553, Kingdom of Saudi Arabia.

Country and Region Specific Disclosures U.K. and European Economic Area (EEA): Unless specified to the contrary, issued and approved for distribution in the U.K. and the EEA by JPMSL. Investment research issued by JPMSL has been prepared in accordance with JPMSL's policies for managing conflicts of interest arising as a result of publication and distribution of investment research. Many European regulators require that a firm to establish, implement and maintain such a policy. This report has been issued in the U.K. only to persons of a kind described in Article 19 (5), 38, 47 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons being referred to as "relevant persons"). This document must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is only available to relevant persons and will be engaged in only with relevant persons. In other EEA countries, the report has been issued to persons regarded as professional investors (or equivalent) in their home jurisdiction. Australia: This material is issued and distributed by JPMSAL in Australia to “wholesale clients” only. JPMSAL does not issue or distribute this material to “retail clients.” The recipient of this material must not distribute it to any third party or outside Australia without the prior written consent of JPMSAL. For the purposes of this paragraph the terms “wholesale client” and “retail client” have the meanings given to them in section 761G of the Corporations Act 2001. Germany: This material is distributed in Germany by J.P. Morgan Securities Ltd., Frankfurt Branch and J.P.Morgan Chase Bank, N.A., Frankfurt Branch which are regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht. Hong Kong: The 1% ownership disclosure as of the previous month end satisfies the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for persons licensed by or registered with the Securities and Futures Commission. (For research published within the first ten days of the month, the disclosure may be based on the month end data from two months’ prior.) J.P. Morgan Broking (Hong Kong) Limited is the liquidity provider for derivative warrants issued by J.P. Morgan International Derivatives Ltd and listed on The Stock Exchange of Hong Kong Limited. An updated list can be found on HKEx website: http://www.hkex.com.hk/prod/dw/Lp.htm. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of share trading, and that a loss may occur due to the exchange rate in the case of foreign share trading. In the case of share trading, JPMorgan Securities Japan Co., Ltd., will be receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the commission rate which was individually agreed between JPMorgan Securities Japan Co., Ltd., and the customer in advance. Financial Instruments Firms: JPMorgan Securities Japan Co., Ltd., Kanto Local Finance Bureau (kinsho) No. 82 Participating Association / Japan Securities Dealers Association, The Financial Futures Association of Japan. Korea: This report may have been edited or contributed to from time to time by affiliates of J.P. Morgan Securities (Far East) Ltd, Seoul branch. Singapore: JPMSS and/or its affiliates may have a holding in any of the securities discussed in this report; for securities where the holding is 1% or greater, the specific holding is disclosed in the Important Disclosures section above. India: For private circulation only, not for sale. Pakistan: For private circulation only, not for sale. New Zealand: This material is issued and distributed by JPMSAL in New Zealand only to persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money. JPMSAL does not issue or distribute this material to members of "the public" as determined in accordance with section 3 of the Securities Act 1978. The recipient of this material must not distribute it to any third party or outside New Zealand without the prior written consent of JPMSAL.

General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan Chase & Co. or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy except with respect to any disclosures relative to JPMSI and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is as of the close of market for the securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. JPMSI distributes in the U.S. research published by non-U.S. affiliates and accepts responsibility for its contents. Periodic updates may be provided on companies/industries based on company specific developments or announcements, market conditions or any other publicly available information. Clients should contact analysts and execute transactions through a J.P. Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise.

“Other Disclosures” last revised January 30, 2009.

jp morgan global metals & mining october

Documents