JP Morgan Global Metals & Mining October

Global Equity Research
09 October 2009
Global Metals & Mining

Weekly Wrap-Up
• Alcoa: Kleinfeld Rejuvenating Alcoa - Reiterate OW (p-8) Metals & Mining

AC
Michael F. Gambardella
• Burning Thoughts #24: Coal and the Vancouver Port Tango (p-8) (1-212) 622-6446
michael.gambardella@jpmorgan.com
• Norsk Hydro: Upgrade to Neutral (p-11)
J.P. Morgan Securities Inc.
• Klöckner & Co.: Upgrade to OW; Accretive deals to enhance Rodolfo R. De Angele, CFA
AC
valuation (p-11) (55-11) 3048-3888

rodolfo.r.angele@jpmorgan.com
• BHP Billiton Limited: Olympic Dam Main Haulage Shaft Failure (p- Banco J.P. Morgan S.A.
14) John Bridges CFA, ACSM
AC
(1-212) 622-6430
• Bumi Resources: 19% interest charged annually - ALERT (p-14) john.bridges@jpmorgan.com

• Steel: Domestic HRC prices likely to come under pressure in the near AC
term - ALERT (p-15) David George
(61-3) 9608-4002
david.b.george@jpmorgan.com
• Steel Authority of India Ltd: Chiria Mine allocation- Long Term
J.P. Morgan Securities Australia Limited
Positive, No near term impact likely - ALERT (p-16)
AC
Jeffrey Largey
• Latin Coppers: Raising estimates on higher copper price forecasts, (44-20) 7325-9744
prefer GMex over PCU (p-18) largey_jeffrey@jpmorgan.com
J.P. Morgan Securities Ltd.

• Vale: Revising estimates to incorporate new base metal forecasts (p- Frank Li
AC
18) (852) 2800-8511

frank.m.li@jpmorgan.com
J.P. Morgan Securities (Asia Pacific) Limited

AC
Steve Shepherd
(27-11) 507-0386
steve.a.shepherd@jpmorgan.com
J.P. Morgan Equities Ltd.

Please refer to “Table 2: Most Recent Publications by the Global Metals
and Mining Team” for the list of original publication dates. Please see page 2 for our complete
Global Metals & Mining team list.
Table 1: Top Global Metals Equity Picks

prices are in local terms unless otherwise indicated
JPM Primary Price Mkt. Cap Fiscal EPS (Local)
Rating Company Analyst Metal Country CCY 08 Oct-09 (US$ MM) 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 1.12
Source: J.P. Morgan estimates, Bloomberg. Note: J.P. Morgan ratings: OW = Overweight; N = Neutral; and UW = Underweight
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.
Michael F. Gambardella Global Equity Research
(1-212) 622-6446 09 October 2009
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 largey_jeffrey@jpmorgan.com chawalitakul.sukit@jpmorgan.com
michael.gambardella@jpmorgan.com 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 michael.j.jansen@jpmorgan.com (85-2) 2800 8511
john.bridges@jpmorgan.com Ben Defay (London) Frank.m.li@jpmorgan.com
Nathan Zibilich, CFA (New York) (44-20) 7325-9231 Wenwen Wang (Hong Kong)
(1-212) 622-2039 ben.defay@jpmorgan.com (86-21) 5200 3786
nathan.zibilich@jpmorgan.com J.P. Morgan Securities Ltd. wenwen.x.wang@jpmorgan.com
Ankush Agarwal, CFA (New York) J.P. Morgan Securities (Asia Pacific) Limited
(1-212) 622-5623 Aditya Srinath (Jakarta)
ankush.agarwal@jpmorgan.com (62-21) 5291 8573
Tyler Langton (New York) aditya.s.srinath@jpmorgan.com
(1-212) 622-5234 Stevanus Juanda (Jakarta)
tyler.j.langton@jpmorgan.com (62-21) 5291 8574
J.P. Morgan Securities Inc. stevanus.x.juanda@jpmorgan.com
PT J.P. Morgan Securities Indonesia
Pinakin Parekh (Mumbai)
(91-22) 6639 3018
pinakin.m.parekh@jpmchase.com
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
rodolfo.r.angele@jpmchase.com steve.a.shepherd@jpmorgan.com Australia
Fabio Bevilaqua (Sao Paulo) Allan Cooke (Johannesburg) Mark Greenwood (Sydney)
(55 11 3048 3403) (27-11) 507-0384 (61-2) 9220 1563
fabio.z.bevilaqua@jpmchase.com allan.j.cooke@jpmorgan.com mark.j.greenwood@jpmorgan.com
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) abhishek.x.tiwari@jpmorgan.com benjamin.x.wilson@jpmorgan.com
yuriy.a.vlasov@jpmorgan.com J.P. Morgan Equities Limited Dale Koenders (Sydney)
J.P. Morgan Bank International LLC (61-2) 9220 1579
dale.j.koenders@jpmorgan.com
David George (Melbourne)
(613) 9608 4002
david.b.george@jpmorgan.com
J.P. Morgan Securities Australia Limited
Japan
Akira Kishimoto (Tokyo)
(81-3) 6736-8646
akira.x.kishimoto@jpmorgan.com
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
dave.adam.katz@jpmorgan.com
The authors acknowledge the contribution of Sadhak Bindal of J.P. Morgan Services India Private Ltd.,
Mumbai, to this report
2
(1-212) 622-6446 09 October 2009
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
Rio Tinto Limited : Feedback from North American Site Visit: Cautious on aluminium outlook, focus on cost reductions -
21-Sep-09 George ALERT 5
Metals - Investor Meeting Takeaways : While investors wary of valuations, few willing to go against momentum; China
21-Sep-09 Parekh 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
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
Nucor Corp. : Company specific pig iron issue a $0.37 drag on 3Q - Remain positive on integrated producers X, MT and
15-Sep-09 Gambardella AKS 1
Nippon Steel (5401) : Initiating Coverage at Overweight: Top Blast Furnace Steelmaker, Growth Strategy Centers on High-
15-Sep-09 Kishimoto grade and Midrange Market Segments 5
YAMATO KOGYO (5444) : Initiating Coverage at Neutral: Electric Furnace Ordinary Steel Maker with Ambitious Overseas
15-Sep-09 Kishimoto Plans 5
JFE Holdings (5411) : Initiating Coverage at Overweight: Needs to Beef Up Overseas Strategy to Complement Domestic
15-Sep-09 Kishimoto 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
Kobe Steel (5406) : Initiating Coverage at Neutral: Comprehensive Assessment of Diversified Business Portfolio Takes
15-Sep-09 Kishimoto Time 5
Daido Steel (5471) : Initiating Coverage at Overweight: Cyclical Recovery and Attractive Medium- to Long-term Growth
15-Sep-09 Kishimoto Potential 5
15-Sep-09 Bridges Gold & Precious Metals : Denver Gold Forum Day 1 Wrap-up 12
Steel Sector : Initiating Coverage of Seven Steelmakers: Increasing Strategic Options for Longer-term Growth in Addition
15-Sep-09 Kishimoto 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 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)
3
(1-212) 622-6446 09 October 2009
Metals Snapshot
Figure 1: Aluminum Figure 2: Copper
$/lb LME+Comex Aluminum Inventory '000 tons $/lb LME+Comex Copper Inventory '000 tons
1.60 LME Aluminum Price 5,000 4.50 LME Copper Price 700
1.50 4,500
4.00 600
1.40
4,000
1.30 3.50 500
3,500
1.20
1.10 3,000 3.00 400
1.00 2,500 2.50 300

0.90
2,000
0.80 2.00 200
1,500
0.70
1.50 100
0.60 1,000
0.50 500 1.00 0

Oct-07 Mar-08 Jul-08 Dec-08 May-09 Oct-09 Oct-07 Mar-08 Jul-08 Dec-08 May-09 Oct-09
Source: Bloomberg Source: Bloomberg
LME aluminum prices moved lower by 1% to $0.82/lb while LME The LME copper moved higher by 2% to $2.76/lb, while LME &
& COMEX inventories remained unchanged at 4,581kt for the COMEX inventories moved higher by 1% to 401kt for the week.
week
Figure 3: Nickel Figure 4: Zinc

$/lb LME Nickel Inventory LME Nickel Price '000 tons $/lb LME Zinc Inventory LME Zinc Price '000 tons
17.00 140 1.80 500
450
15.00 120 1.60
400
13.00 100 1.40 350
300
11.00 80 1.20
250
9.00 60 1.00
200
7.00 40 0.80 150
100
5.00 20 0.60
50
3.00 0 0.40 0
The LME nickel prices moved higher by 7% to $8.42/lb, while The LME zinc price moved higher by 1% to $0.87/lb, while
inventories remained unchanged at 121,326tonnes. inventories remained unchanged at 435,325 tonnes
4
(1-212) 622-6446 09 October 2009
Metals Snapshot
Figure 5: Lead Figure 6: Tin
$/lb LME Lead Inventory LME Lead Price '000 tons $/lb LME Tin Inventory LME Tin Price '000 tons
2.05 140 14.00
18
1.85
120 16
12.00
1.65
14
100
1.45 10.00
12
1.25 80
10
8.00
1.05 60 8
0.85 6.00 6
40
0.65 4
4.00
20
0.45 2
0.25 0 2.00 0
The LME lead price fell 2% to $0.96/lb and inventories remained The LME tin price fell 1% to $6.83/lb and inventories moved
unchanged at 127,875 tonnes. higher by 3% to 26.1kt.
Figure 7: Gold Figure 8: Silver

$/oz Comex Gold Open Interest No. of Contracts $/oz Comex Silver Open Interest No. of Contracts
Gold Price ('000) Silver Price ('000)
1100 650 210
20.5
1050
600
1000 190
550 18.5
950
170
900 500
16.5
850 150
450
800
14.5
400
750 130
700 350 12.5

110
650
300
600 10.5 90
250
550
500 200 8.5 70
We remain positive on the longer gold fundamentals driven by Industrial weakness led to a sharp pullback in silver prices,
demand and supply. However, we believe the near term direction which are now recovering. We expect silver prices to remain
will be driven by inflation and dollar depreciation expectations. volatile and to move more in line with gold prices.
5
(1-212) 622-6446 09 October 2009
Metals Snapshot
Figure 9: Gold & Silver Inventories Figure 10: PGMs
Mn Ounces Comex Silver Inventory (LHS) Mn Ounces $/oz Platinum Price (LHS) $/oz
145 Comex Gold Inventory (RHS) 10.0 Palladium Price (RHS)
2,150 850
140
9.0
1,950 750
135
8.0
130 1,750 650
125 7.0 1,550 550
120 1,350 450

6.0
115 1,150 350
5.0
110 950 250
105 4.0 750 150

Are the recent declines in the Comex silver inventories We see a bleak environment ahead for PGMs demand that
suggesting a tighter silver market? 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
6
(1-212) 622-6446 09 October 2009
Global Movers and Shakers

Figure 11: Best and Worst Equity Performance by Metals Sector
five-day market-cap weighted return of indexes (%), local
Copper
Gold
Diversified
Aluminum
PGM
Zinc
Steel
Nickel
Coal
0 2 4 6 8 10 12 14 16
Source: Bloomberg
Figure 12: : Best Performance (Copper Sector) Figure 13: Worst Performance (Coal Sector)
five-day return (%), local five-day return (%), local
Massey Energy
Teck Cominco Ltd. International Coal Group
CONSOL Energy
Peabody Energy
Arch Coal
Freeport-McMoRan Copper
China Coal Energy
Rentech Inc.
Yanzhou Coal Mining - H

Southern Copper Corp
Banpu Public
Raspadskaya
China Shenhua Energy

Grupo Mexico
PT Tambangraya Megah
Tambang Bukit Asam
Centennial Coal Company
Sterlite Industries Exxaro Resources Ltd
Bumi Resources
0 2 4 6 8 10 12 14 16 -15 -10 -5 0 5 10 15 20
7
(1-212) 622-6446 09 October 2009
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
Nonferrous Metals and Mining 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
8
(1-212) 622-6446 09 October 2009
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)
9
(1-212) 622-6446 09 October 2009
Leaders and Laggards: North America

Figure 14: Five-Day Performance
five-day return (%), local
Century Aluminum Co.
Coeur d'Alene
Stillwater Mining
Massey Energy
International Coal Group
Cliffs Natural Resources
Pan American Silver
Teck Cominco Ltd.
Silver Wheaton
CONSOL Energy
Gerdau Ameristeel
Peabody Energy
Agnico-Eagle Mines
Arch Coal
Alcoa
Newmont Mining
Kinross Gold
Goldcorp Inc
GrafTech International
Barrick Gold
Allegheny Technologies
Arcelor Mittal
Carpenter Technology
Gold Reserve
Steel Dynamics
AK Steel
Rentech Inc.
Thompson Creek Metals
Commercial Metals
U.S. Steel Corp
Haynes International
Worthington Industries
Dynamic Materials
Globe Specialty Metals
Nucor
0 5 10 15 20 25 30
Source: Bloomberg
Figure 15: 30-Day Performance

30-day return (%), local
International Coal Group

Gold Reserve
Cliffs Natural Resources
Arch Coal
CONSOL Energy
Coeur d'Alene
Teck Cominco Ltd.
Silver Wheaton
Haynes International
Gerdau Ameristeel
Alcoa
Peabody Energy
Dynamic Materials
Allegheny Technologies
Stillwater Mining
Agnico-Eagle Mines
Pan American Silver
Massey Energy
Carpenter Technology
Century Aluminum Co.
Kinross Gold
Globe Specialty Metals
Goldcorp Inc
Newmont Mining
GrafTech International
U.S. Steel Corp
Arcelor Mittal
Barrick Gold
Nucor
Commercial Metals
Worthington Industries
Thompson Creek Metals
AK Steel
Steel Dynamics
Rentech Inc.
-20 -10 0 10 20 30 40 50
Source: Bloomberg
10
(1-212) 622-6446 09 October 2009
Europe/Africa
Nonferrous Metals and Mining 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)
Steel 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
11
(1-212) 622-6446 09 October 2009
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)
12
(1-212) 622-6446 09 October 2009
Leaders and Laggards: Europe/Africa

Figure 16: Five-day Performance
Klöckner & Co.
Novolipetsk Steel
Norsk Hydro
Rio Tinto plc
Randgold Resources Ltd
Anglo American Platinum
TMK
Lonmin plc
SSAB
Evraz Group
AngloGold Ashanti Limited
Aquarius Platinum (SA)
Outokumpu
Salzgitter
ArcelorMittal
Harmony Gold Mining Co
MMK
ThyssenKrupp
Eastern Platinum Ltd.
Gold Fields Ltd
Northam Platinum Ltd
DRDGold Ltd
Voestalpine
BHP Billiton (BILJ.J)
African Rainbow Minerals
Raspadskaya
Impala Platinum Holdings
Lonmin plc (LONJ.J)
Acerinox
Exxaro Resources Ltd
Severstal
-5 0 5 10 15 20
Source: Bloomberg

TMK
Raspadskaya
MMK
Severstal
Novolipetsk Steel
Norsk Hydro
Evraz Group
Voestalpine
Rio Tinto plc
SSAB
Eastern Platinum Ltd.
Klöckner & Co.
Randgold Resources Ltd
Anglo American Platinum
Salzgitter
Exxaro Resources Ltd
ThyssenKrupp
Aquarius Platinum (SA)
Gold Fields Ltd
AngloGold Ashanti Limited
BHP Billiton (BILJ.J)
ArcelorMittal
African Rainbow Minerals
Harmony Gold Mining Co
Acerinox
Lonmin plc
Outokumpu
Impala Platinum Holdings
Lonmin plc (LONJ.J)
DRDGold Ltd
Northam Platinum Ltd
-20 -10 0 10 20 30 40 50 60
Source: Bloomberg
13
(1-212) 622-6446 09 October 2009
Asia/Australia
Nonferrous Metals and Mining 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
14
(1-212) 622-6446 09 October 2009
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 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.
15
(1-212) 622-6446 09 October 2009
• 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)
16
(1-212) 622-6446 09 October 2009
Leaders and Laggards: Asia/Australia

Figure 18: Five-day Performance
Zijin Mining Group Co Ltd
Lihir Gold
Sterlite Industries
PT Aneka Tambang Tbk
Newcrest Mining
Alumina Limited
China Coal Energy
Tata Steel Ltd
OZ Minerals Limited
Angang Steel Co - H
Paladin Energy Ltd
Tokyo Steel
Rio Tinto Limited
Daido Steel
Steel Authority of India Ltd
Banpu Public
Sumitomo Metal
OneSteel Limited
BHP Billiton Limited
Yamato Kogyo
Nippon Steel
Maanshan Iron & Steel - H
Hindalco Industries
Fortescue Metals Group
Kobe Steel
PT Nickel Indonesia
Energy Resources of AUS
National Aluminium Co Ltd
BlueScope Steel
Tambang Bukit Asam
Iluka Resources
China Steel Corp
POSCO
Baoshan Iron & Steel - A
Aluminum Corp. of China
JFE Holdings
Sims Group Limited
Maanshan Iron & Steel - A
Angang Steel Co - A
Bumi Resources
-15 -10 -5 0 5 10 15
Source: Bloomberg

Alumina Limited
Tata Steel Ltd
China Coal Energy
Zijin Mining Group Co Ltd
Sterlite Industries
PT Aneka Tambang Tbk
Hindalco Industries
Tambang Bukit Asam
Banpu Public
Rio Tinto Limited
Steel Authority of India Ltd
POSCO
Newcrest Mining
Lihir Gold
BlueScope Steel
BHP Billiton Limited
National Aluminium Co Ltd
Energy Resources of AUS
Iluka Resources
Sumitomo Metal
China Steel Corp
PT Nickel Indonesia
OneSteel Limited
Yamato Kogyo
Paladin Energy Ltd
Nippon Steel
JFE Holdings
Angang Steel Co - H
Tokyo Steel
Maanshan Iron & Steel - H
Kobe Steel
Bumi Resources
Fortescue Metals Group
Sims Group Limited
Daido Steel
Aluminum Corp. of China
Baoshan Iron & Steel - A
Maanshan Iron & Steel - A
Angang Steel Co - A
OZ Minerals Limited
-40 -30 -20 -10 0 10 20 30
Source: Bloomberg
17
(1-212) 622-6446 09 October 2009
Latin America
Nonferrous Metals and Mining 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
18
(1-212) 622-6446 09 October 2009
$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)
19
(1-212) 622-6446 09 October 2009
Leaders and Laggards: Latin America

Figure 20: Five-Day Performance
CDM Buenaventura
Gerdau S.A.
Vale ON
Vale PN
Grupo Mexico
Ternium
CSN
Usiminas
Lupatech S.A.
0 2 4 6 8 10 12 14 16
Source: Bloomberg

CDM Buenaventura
Vale PN
Vale ON
Lupatech S.A.
Grupo Mexico
Gerdau S.A.
CSN
Ternium
Usiminas
0 5 10 15 20 25 30
Source: Bloomberg
20
(1-212) 622-6446 09 October 2009
Global Metals & Mining Valuation by Sector

Figure 22: Non-ferrous Metals and Mining FV/EBITDA
2009E 2010E
18
15.6
16
14
11.9
12
10.9
9.9
10 9.2
7.7 7.5
8 7.2
7.0
6.5
6.3 6.2
6
2 1.1
0.8
0
N o rth A m e ric a E uro p e A fric a A sia A u s t r a li a L a tin A m e ric a G lo b a l
Source: J.P. Morgan estimates
Figure 23: Precious Metals FV/EBITDA

40 2009E 2010E
23.0
20 13.7 11.6 14.5
11.0 11.8 12.0
7.4 7.6 7.2
0
North America Europe Africa Australia Latin America Global
(20) (14.3)
(40)
(60)
(80)
(100) (94.2)
(120)
Figure 24: Steel FV/EBITDA

20 2009E 2010E
18.7
18
16 15.3
14
12
10.3
10
8 7.4
6.6
6.1 6.1
5.4 5.6
6 5.1
4.3
3.8
4
0
N o rth A m e ric a E uro p e A sia P a c i fic ( e x Japan L a tin A m e ric a G lo b a l
J ap an)
21
(1-212) 622-6446 09 October 2009
J.P. Morgan Global Metals & Mining Coverage and Valuation Table
Price USD EPS (Local) P/E FV/EBITDA Net EBITDA
JPM Bloomberg Local 52-Wk (local) Local Returns (%) (%) Mkt. Cap. Fiscal (Calendarised) (Calendarised) (Calendarised) Debt / 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%
22
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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
GMEXICOB
OW Grupo Mexico 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%
23
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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%
24
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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%
25
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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
26
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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
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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.
29
(1-212) 622-6446 09 October 2009
• 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.
Alcoa (AA) Price Chart
85 Date Rating Share Price Price Target

OW $12 OW $22 ($) ($)
11-Jun-08 N 42.72 --
68
N $8 OW $14 19-Nov-08 N 9.48 11.50
11-Dec-08 N 10.20 8.00
51 N N $11.5 OW $13.5 19-Mar-09 OW 5.48 12.00
Price($) 01-Jul-09 OW 10.33 13.50
09-Jul-09 OW 9.46 14.00
34
28-Jul-09 OW 11.30 22.00
17
0
Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct
06 07 07 07 07 08 08 08 08 09 09 09 09
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 it
over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.
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BHP Billiton Limited (BHP.AX) Price Chart

OW A$47 N A$26.5 N A$25.62
N A$30.38 (A$) (A$)
10-Jul-07 OW 38.83 40.00
70
OW A$43 N A$27.5
N A$25.87
UW
N A$23.07
A$30.827 18-Sep-07 OW 38.82 43.00
26-Oct-07 OW 44.74 47.00
56 OW A$40 OW A$37 N A$24.4
N A$26.15
N A$31.46
01-Dec-08 OW 31.00 37.00
Price(A$) 42 21-Jan-09 N 28.95 27.50
04-Feb-09 N 29.78 26.50
07-Apr-09 N 34.00 24.40
28
22-Apr-09 N 31.56 25.87
26-May-09 N 33.87 25.62
14
29-May-09 N 34.02 26.15
22-Jul-09 N 36.19 23.07
0
28-Jul-09 N 37.85 30.38
06 07 07 07 07 08 08 08 08 09 09 09 09 12-Aug-09 N 37.60 31.46
17-Sep-09 UW 39.00 30.83
Break in coverage Jul 07, 2004 - Nov 18, 2004. This chart shows J.P. Morgan's continuing coverage of this stock; the
current analyst may or may not have covered it over the entire period.
Bumi Resources (BUMI.JK) Price Chart
14,904 Date Rating Share Price Price Target

OW Rp1,570
OW Rp2,900 OW Rp7,700
OW Rp10,400 N Rp2,100 (Rp) (Rp)
12,420 08-Dec-06 OW 860 960
OW Rp1,120 OW Rp3,000
OW Rp5,800 OW Rp8,000 UW Rp580 13-Feb-07 OW 1040 1120
9,936 04-Apr-07 OW 1330 1570
OW Rp960 OW Rp2,200
OW Rp3,400 OW Rp8,300OW Rp8,500 UW Rp620 N Rp3,200
15-Jun-07 OW 1890 2200
Price(Rp) 7,452 09-Jul-07 OW 2775 3000
08-Aug-07 OW 2350 2900
11-Sep-07 OW 2925 3400
4,968
31-Oct-07 OW 4450 5800
30-Jan-08 OW 6600 7700
2,484
13-Mar-08 OW 6300 8300
08-Apr-08 OW 5700 8000
0
16-May-08 OW 7700 10400
06 07 07 07 07 08 08 08 08 09 09 09 09 01-Aug-08 OW 6750 8500
07-Jan-09 UW 850 620
This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered it 17-Mar-09 UW 770 580
04-Jun-09 N 2175 2100
02-Oct-09 N 3125 3200
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Grupo Mexico (GMEXICOB.MX) Price Chart

OW Ps31.5 (Ps) (Ps)
18-Nov-08 N 8.37 14.50
44
OW Ps26.5 28-Jul-09 N 16.77 26.50
19-Aug-09 OW 20.17 26.50
33 N Ps14.5 N Ps26.5 09-Oct-09 OW 26.67 31.50
Price(Ps)
22
11
0
06 07 07 07 07 08 08 08 08 09 09 09 09
Break in coverage Aug 25, 2005 - Nov 18, 2008. This chart shows J.P. Morgan's continuing coverage of this stock; the
Klöckner & Co. (KCOGn.DE) Price Chart
Date Rating Share Price Price Target

95
OW €35 OW €55 OW €36 N €14 N €17 (€) (€)
16-Oct-06 OW 20.62 31.00
76 OW €32 OW €52 N €36 OW €47 N €15 N €11 OW €24 07-Dec-06 OW 23.65 32.00
18-Jan-07 OW 29.36 35.00
OW €31 OW €45 N €26 OW €42 OW €22 N €10 N €22 27-Mar-07 OW 35.58 45.00
57
Price(€) 23-Apr-07 OW 39.79 52.00
11-May-07 OW 42.35 55.00
38
11-Jan-08 N 19.13 26.00
08-Feb-08 N 23.62 36.00
19 11-Feb-08 OW 23.64 36.00
03-Apr-08 OW 29.37 42.00
16-May-08 OW 32.18 47.00
0
Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep
23-Oct-08 OW 10.04 22.00
06 06 07 07 07 07 08 08 08 08 09 09 09 19-Dec-08 N 9.32 15.00
02-Feb-09 N 9.48 14.00
Break in coverage Jan 05, 2008 - Jan 11, 2008. This chart shows J.P. Morgan's continuing coverage of this stock; the 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
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Norsk Hydro (NHY.OL) Price Chart

OW NKr92.394 OW NKr91 (NKr) (NKr)
125 21-Dec-06 N 62.20 210.00
N NKr205 OW NKr90.54 OW NKr92 UW NKr21 N NKr46 23-Jan-07 N 61.47 205.00
100 17-Jul-07 N 80.13 249.00
N NKr210 N NKr249 OW NKr90 UW NKr18 UW NKr33
04-Oct-07 OW 73.60 90.54
Price(NKr) 75 29-Oct-07 OW 82.60 92.39
25-Jan-08 OW 57.90 90.00
50 03-Mar-08 OW 74.10 92.00
23-Apr-08 OW 73.90 91.00
24-Feb-09 UW 22.85 18.00
25
15-Apr-09 UW 28.00 21.00
25-Aug-09 UW 38.15 33.00
0
09-Oct-09 N 42.50 46.00
06 06 07 07 07 07 08 08 08 08 09 09 09
Nucor Corp. (NUE) Price Chart
138
OW $53.5 ($) ($)
03-Aug-07 OW 50.77 71.00
115 OW $100 OW $51 OW $55 14-Mar-08 OW 72.47 82.00
04-Jun-08 OW 74.45 100.00
92 OW $71 OW $82 OW $59 OW $50
17-Oct-08 OW 31.79 59.00
Price($) 69 10-Dec-08 OW 40.98 51.00
28-Jan-09 OW 39.80 53.50
23-Apr-09 OW 44.07 50.00
46
23-Jul-09 OW 44.28 55.00
23
0
06 07 07 07 07 08 08 08 08 09 09 09 09
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Randgold Resources Ltd (RRS.L) Price Chart

OW 1,340p OW 1,920p OW 3,910p (p) (p)
7,170
05-Oct-06 OW 1024 1490
OW 1,420p
OW 1,460p OW 1,580p OW 3,600p 23-Oct-06 OW 1121 1420
5,975
21-Nov-06 OW 1148 1340
OWOW
1,490p
1,520p OW 1,430p OW 2,680pOW 2,420p OW 2,510p OW 4,090pOW 5,150p
4,780 12-Dec-06 OW 1187 1520
Price(p) 08-Mar-07 OW 1180 1460
3,585 17-Jul-07 OW 1143 1430
13-Sep-07 OW 1399 1580
2,390
13-Dec-07 OW 1780 1920
28-Feb-08 OW 2640 2680
1,195
20-Jun-08 OW 2001 2420
10-Nov-08 OW 1958 2510
0
17-Feb-09 OW 3253 3600
06 06 07 07 07 07 08 08 08 08 09 09 09 06-Mar-09 OW 3261 3910
13-May-09 OW 3869 4090
This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered it 03-Sep-09 OW 3689 5150
Southern Copper Corporation (PCU) Price Chart

80 ($) ($)
14-Mar-08 UW 37.19 30.30
64 UW $27.5 18-Nov-08 UW 12.10 16.80
28-Jul-09 UW 25.57 23.00
UW $30.3 UW $16.8 UW $23 09-Oct-09 UW 33.26 27.50
48
Price($)
32
16
0
06 07 07 07 07 08 08 08 08 09 09 09 09
Break in coverage Aug 25, 2005 - Mar 14, 2008. This chart shows J.P. Morgan's continuing coverage of this stock; the
34
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Steel Authority of India Ltd (SAIL.BO) Price Chart

468 OW Rs81 (Rs) (Rs)
10-Jan-07 OW 84.90 125.00
390 OW Rs147 OW Rs135 11-Apr-07 OW 117.70 147.00
31-Oct-07 OW 261.05 291.00
312 OW Rs125 OW Rs291 OW Rs195 OW Rs90 N Rs160
22-Jul-08 OW 125.65 195.00
Price(Rs) 16-Oct-08 OW 104.20 135.00
234
20-Nov-08 OW 58.95 81.00
29-Jan-09 OW 80.95 90.00
156
02-Jun-09 N 175.50 160.00
78
0
06 07 07 07 07 08 08 08 08 09 09 09 09
Initiated coverage Jan 10, 2007. This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst
may or may not have covered it over the entire period.
Teck Resources (TCKb.TO) Price Chart

90 (C$) (C$)
OW C$8 OW C$14OW C$33
23-Oct-08 OW 14.32 28.00
72 OW C$19 OW C$10
OW C$22 19-Nov-08 OW 6.12 19.00
11-Dec-08 OW 4.83 8.00
OW C$28 OW C$6.5
OW C$18.5 18-Feb-09 OW 4.44 6.50
54
Price(C$) 03-Apr-09 OW 8.14 10.00
21-Apr-09 OW 9.11 14.00
36
21-May-09 OW 15.91 18.50
01-Jul-09 OW 18.55 22.00
18 28-Jul-09 OW 26.28 33.00
0
06 07 07 07 07 08 08 08 08 09 09 09 09
35
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Thompson Creek Metals (TC) Price Chart

OW $15.5 ($) ($)
44
27-Apr-09 OW 6.21 7.50
OW $10 05-May-09 OW 7.68 10.00
09-Jun-09 OW 9.74 15.50
33
OW $7.5OW $23 21-Jul-09 OW 12.68 23.00
Price($)
22
11
0
06 07 07 07 07 08 08 08 08 09 09 09 09
Initiated coverage Apr 27, 2009. This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst
may or may not have covered it over the entire period.
Vale ON (VALE) Price Chart

75 ($) ($)
OW $23.3 N $31.5 OW $23.4
22-Dec-06 OW 14.59 17.80
60 OW $19.8 OW $31.5 OW $30.68 N $24.5 07-Feb-07 OW 17.32 19.80
17-Apr-07 OW 20.95 23.30
OW $17.8 OW $27.9 OW $46.1 OW $47.5 N $18.5 N $23.5 09-Jul-07 OW 24.02 27.90
45
Price($) 14-Sep-07 OW 27.50 31.50
03-Oct-07 N 35.45 31.50
30
11-Apr-08 OW 36.36 46.10
02-Sep-08 OW 26.55 47.50
15 16-Oct-08 OW 11.14 30.68
19-Nov-08 OW 11.09 23.40
20-Feb-09 N 14.72 18.50
0
03-Aug-09 N 20.77 23.50
06 06 07 07 07 07 08 08 08 08 09 09 09 08-Oct-09 N 24.41 24.50
Break in coverage Dec 30, 2001 - Feb 12, 2002, and Aug 25, 2005 - Dec 22, 2006. This chart shows J.P. Morgan's
continuing coverage of this stock; the current analyst may or may not have covered it over the entire period.
36
(1-212) 622-6446 09 October 2009
Vale PN (VALEp) Price Chart

OW $27.9 OW $20.5 ($) ($)
17-Apr-07 OW 17.54 34.17
52
OW $24.7 OW $26.912 N $21.5 09-Jul-07 OW 20.31 24.70
14-Sep-07 OW 23.23 27.90
39 OW $34.17 N $27.9 OW $39 OW $40.3 N $16 N $20.5 03-Oct-07 N 30.05 27.90
Price($) 11-Apr-08 OW 30.46 39.00
02-Sep-08 OW 23.77 40.30
26
16-Oct-08 OW 10.39 26.91
19-Nov-08 OW 10.12 20.50
13 20-Feb-09 N 12.37 16.00
03-Aug-09 N 18.15 20.50
08-Oct-09 N 21.64 21.50
0
06 06 07 07 07 07 08 08 08 08 09 09 09
Break in coverage Dec 30, 2001 - Feb 12, 2002, and Aug 25, 2005 - May 31, 2006. This chart shows J.P. Morgan's
continuing coverage of this stock; the current analyst may or may not have covered it over the entire period.
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)
37
(1-212) 622-6446 09 October 2009
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 Neutral Underweight
(buy) (hold) (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.
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38
(1-212) 622-6446 09 October 2009
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39
(1-212) 622-6446 09 October 2009
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40

JP Morgan Global Metals &amp; Mining October

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Global Equity Research

Global Metals & Mining

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

valuation (p-11) (55-11) 3048-3888

J.P. Morgan Securities Inc.

J.P. Morgan Securities Ltd.

18) (852) 2800-8511

J.P. Morgan Securities (Asia Pacific) Limited

J.P. Morgan Equities Ltd.

Table 1: Top Global Metals Equity Picks

J.P. Morgan Global Metals and Mining Equity Research

J.P. Morgan USA Metals and Mining Credit Research

Recently Published Reports

1.10 3,000 3.00 400

1.00 2,500 2.50 300

0.50 500 1.00 0

Source: Bloomberg Source: Bloomberg

Figure 3: Nickel Figure 4: Zinc

13.00 100 1.40 350

7.00 40 0.80 150

Source: Bloomberg Source: Bloomberg

Source: Bloomberg Source: Bloomberg

Figure 7: Gold Figure 8: Silver

700 350 12.5

Source: Bloomberg Source: Bloomberg

125 7.0 1,550 550

120 1,350 450

115 1,150 350

105 4.0 750 150

Source: Bloomberg Source: Bloomberg

Table 3: Metal Performance & JPM Forecasts

Table 4: Metal Inventories

Global Movers and Shakers

Teck Cominco Ltd. International Coal Group

Yanzhou Coal Mining - H

China Shenhua Energy

Tambang Bukit Asam

Centennial Coal Company

Sterlite Industries Exxaro Resources Ltd

Source: Bloomberg Source: Bloomberg

Regional Publications for the Week

Burning Thoughts #24: Coal and the Vancouver Port Tango

Leaders and Laggards: North America

Figure 15: 30-Day Performance

International Coal Group

of timing, we believe KCO is exploring multiple value enhancing transactions

Leaders and Laggards: Europe/Africa

Figure 17: 30-Day Performance

Bumi Resources: 19% interest charged annually - ALERT

consensus’ FY10E forecast. Currently consensus is forecasting FY09E and

Leaders and Laggards: Asia/Australia

Figure 19: 30-Day Performance

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

Vale: Revising estimates to incorporate new base metal forecasts

Leaders and Laggards: Latin America

Southern Copper Corp

Figure 21: 30-Day Performance

Southern Copper Corp

Global Metals & Mining Valuation by Sector

Source: J.P. Morgan estimates

Figure 23: Precious Metals FV/EBITDA

Source: J.P. Morgan estimates

Figure 24: Steel FV/EBITDA

JP Morgan Global Metals & Mining October

JP Morgan Global Metals & Mining October