Workers at Grupo Mexico's Cananea copper mine in the Mexican northwestern state of Sonora voted overwhelmingly at the weekend to end a strike of almost two months that the government has declared illegal, the Mexican Miners and Metalworkers' Union announced Sunday.

The decision followed Grupo Mexico's announcement that all of its approximately 2,000 blue-collar workers had been fired at the La Caridad copper mine and Agua Prieta lime plant, also in Sonora. The La Caridad and Agua Prieta workers had been striking illegally since the end of March. Grupo Mexico said it started firing staff after gaining official backing for closure of the mine.

All three disputes centered on the government's refusal to recognize Napoleon Gomez as leader of the union. Gomez is wanted on charges that he embezzled millions of dollars that Grupo Mexico put in trust for its workers.

The union said that, despite calling off their strike, the Cananea workers would continue to fight for recognition of Gomez.

Macquarie Bank Ltd., Australia's largest securities firm, raised its price forecasts for copper, nickel and zinc this year and cut estimates for aluminium, lead and alumina.

Copper for immediate delivery on the London Metal Exchange will average $2,959 a pound, or $6 523 a ton, this year, London-based Macquarie analysts led by Jim Lennon and Adam Rowley said in an e-mailed report today. That's 17% higher than the bank's previous forecast.

"Demand growth is near a peak and will slow in 2007," the analysts said in the report. Prices will lower next year and in 2008 as production climbs in response to record prices, prompting investment funds to sell metals, Macquarie said.

Copper production will lag behind demand by 46 000 tons in 2006, less than last year's shortfall of 200, 00 tons, Lennon said today by phone. The market will shift to an oversupply of 53 000 tons in 2007, he added. Copper for three-month delivery on the LME averaged $6 126 this year and rose to a record $8 800 on May 11.

Nickel for immediate delivery will average $8,452 a pound, or $18 633 a ton, which is 15% higher than Macquarie's previous forecast. Prices for nickel, which is used in stainless steel, averaged $17 963 this year.

Demand for nickel will exceed production by 34 000 tons this year, Lennon and Rowley said. Nickel for delivery in three months has jumped 96% this year and touched $26 650 a ton today, the highest since at least 1987. That's the biggest gain among LME-traded metals.

Macquarie raised its zinc estimate by 8% to $2 930 a ton. The metal, used to galvanize steel, has averaged $2 796 a ton so far this year.

Aluminium will average $2 579 a ton this year, 2,5% below the company's previous forecast. The metal has averaged $2 535 so far this year.

Alumina, the raw material used in aluminium production, is forecast to average $509,60 a ton, 12% lower than the previous estimate. China's production is growing faster than expected, Macquarie said.

The estimate for lead was cut 11 percent to $1 063 a ton as rapid growth in Chinese production led to a surplus. The contract has averaged $1 159 so far this year.

Palabora Mining Co. Ltd. Monday said it hoisted 2.67 million tons of copper in the second quarter of the year, down 2.6% on the 2.74 million tons hoisted in the first quarter of the year

Daily production from the underground mine in South Africa's Limpopo region was affected by two, four-day stoppages in the production hoists, but still averaged 29,392 tons. This was 4% lower than the prior quarter and 2% higher than the corresponding period in 2005.

The tons hoisted for the first half of 2006 were 8% higher than the corresponding period in 2005.

Total mill throughput remained in line with the previous quarter. Mill head grade for the quarter was slightly below the average of the first quarter, however the overall trend for the second quarter was steadier and higher than the average for January and February.

Palabora, situated in the Ba-Phalaborwa area of Limpopo, operates South Africa's largest copper mine. After 40 years of mining from a large, open-pit operation, the ore is now extracted in an underground operation located immediately below the open pit. Overall copper production is supplemented by imported copper concentrates from Zambia.

Phoenix-based mining company Phelps Dodge Corp. and Canadian metals companies Inco Ltd. and Falconbridge Ltd. Sunday raised their offer to Falconbridge shareholders for a three-way merger by about half a billion to $17.3 billion.

Phelps Dodge's takeover of Inco, coupled with Inco's offer for Falconbridge, would create a dominant copper and nickel producer in the North American market.

The deal, which is supported by Falconbridge's board, competes with an offer from Switzerland's Xstrata PLC, which has offered to buy Falconbridge for $16.2 billion in cash.

Phelps Dodge on Sunday increased the cash portion of its offer for Inco by 2.75 Canadian dollars ($2.44) per share to 20.25 Canadian dollars ($17.96) per share.

Phelps Dodge said that including stock, the offer is now worth 80.70 Canadian dollars ($71.42) per Inco share. Inco shares closed Friday at $66.25 on the New York Stock Exchange.

Inco raised the cash portion of its bid for Falconbridge by 1 Canadian dollar (88 U.S. cents).

To further sweeten the deal for its shareholders, the board of Falconbridge declared a special cash dividend of 75 Canadian cents (66 U.S. cents) per share.

The total implied value of the higher bid for Falconbridge is 63.43 Canadian dollars ($56.26) per share, Phelps Dodge and Inco said.

Inco also reduced the total number of Falconbridge shares that need to be tendered for its offer to be successful to 50.01 percent from two-thirds.

The Falconbridge board concluded Inco's offer was superior to a bid by Xstrata, which had offered 59 Canadian dollars ($52.73) a share on Tuesday, and recommended that its shareholders accept the Inco offer.

Anglo-American will update a feasibility study for the Quellaveco copper project in southern Peru as a result of changes in the world copper market, a company official said Friday.

"The new study will take 18-24 months. A team is being chosen now to carry out the study. The project's future will depend on the results of the study," Eduardo Rubio, manager of external relations at Anglo-American's Lima office.

Quellaveco was privatized in the early 1990s but the deposit's development has stalled due to international copper prices and difficulties over the water supply for the project. Quellaveco is located in the Moquegua District, 1,000 kilometers southeast of Lima. Last week, President-elect Alan Garcia told a business conference that Quellaveco's investors would come to Peru soon to carry out studies on the deposit. He had met with officials of Anglo-American earlier this month.

Anglo-American holds an effective 80% interest in the project and the International Finance Corporation holds a 20% share.

Workers at Grupo Mexico's Cananea copper mine in the Mexican northwestern state of Sonora voted overwhelmingly at the weekend to end a strike of almost two months that the government has declared illegal, the Mexican Miners and Metalworkers' Union announced Sunday.

The decision followed Grupo Mexico's announcement that all of its approximately 2,000 blue-collar workers had been fired at the La Caridad copper mine and Agua Prieta lime plant, also in Sonora. The La Caridad and Agua Prieta workers had been striking illegally since the end of March. Grupo Mexico said it started firing staff after gaining official backing for closure of the mine.

All three disputes centered on the government's refusal to recognize Napoleon Gomez as leader of the union. Gomez is wanted on charges that he embezzled millions of dollars that Grupo Mexico put in trust for its workers.

The union said that, despite calling off their strike, the Cananea workers would continue to fight for recognition of Gomez.