Vale (Nasdaq:VALE), Rio Tinto (NYSE: RIO) Xstrata (LSE:XTA), Freeport (NYSE:FCX) Top Iron Ore, Copper Picks of Barclays (NYSE:BCS)

Talking on their outlook for copper and iron ore going forward, Barclays (NYSE:BCS) identified Vale (Nasdaq:VALE), Rio Tinto (NYSE: RIO) Xstrata (LSE:XTA) and Freeport-McMoRan Copper & Gold (NYSE:FCX) as their top picks.

Barclays said, "While there has been much concern in the market recently that copper has become a speculative bubble, we disagree. We remain confident in our long-held bullish copper thesis. In our opinion, many observers continue to underestimate the difficulty the mining industry is likely to face growing copper supply. The projects that are likely to be constructed in coming years are much smaller in scale and far more capital intensive than the projects developed in the 1990s..."

"As we have said for some time, with limited supply growth and inelastic demand, we believe the market may see several years of copper prices above $5 per pound. We remain confident there is material upside risk to our copper price assumptions. Globally, our favorite copper-levered mining equities are Xstrata and Freeport-McMoRan Copper & Gold. In our opinion, equity markets continue to underappreciate the barriers to entry inherent in mining and the prospects for an extended period of high prices..."

"And, we see potential for prices to remain at elevated levels for several years as the lead time to bring online new supply is lengthening, even for the majors. We believe high-cost Chinese iron ore capacity (production costs greater than $140 per tonne) will be needed to balance the market for the foreseeable future, which should be supportive of higher than expected prices. Our preferred iron ore leveraged equities in our global coverage are Vale and Rio Tinto ..."

Xstrata closed Tuesday at 1,510.00, up 4.50, or 0.30 percent. Vale closed at $35.82, up $0.69, or 1.96 percent. Rio Tinto ended the session at $71.08, down $0.52, or 0.73 percent. Freeport closed the trading day at $118.75, losing $0.83, or 0.69 percent.