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TheStreet Open House

Three Junior Copper Miners on a Roll

Stocks in this article: RIO BHP FCX TGB HBM PLM AZC

NEW YORK ( TheStreet) -- China, the world's largest copper consumer, is focusing on the Canadian markets to gain access to new copper resources. The acquisition of Vancouver-based junior copper-gold explorer Continental Minerals for $432 million by China-based Jinchuan Group helps demonstrate China's insatiable appetite for the metal and its pursuit of gaining access to additional copper assets.

These three junior Canadian miners will likely attract China's interest, especially in projects that produce copper concentrates and not the finished metal. The pace of M&A in the junior space is escalating, as they not only form part of the supply chain for the much needed copper, but China is facing a supply crunch.

Major industry players, like Rio Tinto (RIO), BHP Billiton (BHP) and Freeport-McMoRan Copper & Gold (FCX - Get Report), expect the market for mined copper to remain in a deficit in the foreseeable future.

At a recent industry conference in London, Rio Tinto said that planned copper mining projects will be unable to support demand growth at current rates. Rio sees production from probable mining projects supporting annual demand growth of only 3%, while the forecast for demand during 2011 is 4.5%.

In such a scenario, the following three Canadian junior miners will likely provide attractive opportunities to investors in the near term. Industry analysts believe that these stocks will grab the attention of foreign investors or mid-tier producers looking to improve their long-term growth profile. Besides, even sovereign wealth funds in China, India, Brazil and other developing economies are likely to concentrate on these junior mining companies.

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