WMC profits up amid bid criticism

Australian mining firm WMC Resources has seen a fivefold rise in profits while continuing to be the target of a hostile takeover bid.

WMC said it made net profits of 1.33bn Australian dollars ($1bn; £550m) in 2004, up from A$246bn the year before. It is currently arguing against an offer from Swiss Xstrata, which the firm raised to A$8.4bn last week after WMC said it was an undervaluation. Now reports say that the Australian government is against the deal.

Trade Minister Mark Vaile has said that the bid may be "against the national interest". Mr Vaile, who was quoted in the Australian Financial Review, compared Xstrata's attempt to take over WMC to a similar bid by oil giant Shell for Australia's Woodside Petroleum in 2001. The bid was thrown out by Treasurer Peter Costello on national interest grounds. WMC's interests in uranium deposits were a contributing factor, Mr Vaile said. WMC itself, however, has no objection in principle to being bought out, having spun off its aluminium operations in 2002 to make itself a more tempting target - as long as the price is right. Its stellar performance in 2004 has been built on sky-high prices for metals. Copper and nickel in particular have been in high demand thanks to China's booming economy, which expanded more than 9% in each of the past two years. Nickel prices rose 43% during the year, with copper up 36%.
