Freeport-McMoRan Copper & Gold Inc.’s plan to buy Phelps Dodge Corp. for $25.5 billion may signal the mining industry’s yearlong buying spree is far from over because of lofty metals prices and a shortage of new mines.

As many as 975 mining mergers and acquisitions worth more than $157 billion have been proposed this year, according to data compiled by Bloomberg. The purchase by New Orleans-based Freeport would be the largest ever. There were 875 transactions worth $94 billion in all of last year.

“The whole sector is wide open,” said Martin Potts, a mining analyst at Teather & Greenwood in London. “I don’t think M&A in mining has peaked. It’s going to continue for a while.”

Metal-price increases are swelling corporate coffers, encouraging companies such as Brazil’s Cia. Vale do Rio Doce, the biggest iron-ore producer, and Switzerland’s Xstrata Plc to get bigger as more of the world’s metal and mining resources are concentrated in fewer hands. Advising on the deals has helped securities firms to record earnings this year.

Potts said “super juniors” such as First Quantum Minerals Ltd., a Vancouver-based copper and gold producer, and London- based Anglo American Plc, the world’s third-biggest mining company, may be candidates for purchase.

“Any company with good development portfolios could be snapped up quickly,” Potts said.

Anyone’s a Predator

Freeport’s purchase of Phoenix-based Phelps Dodge will make it the world’s largest publicly traded copper producer, surpassing Melbourne-based BHP Billiton Ltd. Rio de Janeiro- based Vale outbid Phelps Dodge for Inco Ltd. to expand to be the second-largest nickel producer. Zug, Switzerland-based Xstrata outbid Inco and Phelps Dodge for Falconbridge Ltd. Almost one third of the value of the total $157 billion in proposed deals involves the competing bids for Inco.

Freeport has a market value of $11 billion, while Phelps Dodge has a value of $24.6 billion.

Freeport’s bid “just shows you that anyone can be a predator at the moment, especially after strong commodity prices have resulted in strong balance sheets for many companies,” said Paul McTaggart, an analyst at HSBC Holdings Plc in London.

The Freeport takeover was sparked by Phelps Dodge’s failure this year to acquire Falconbridge and Inco, both of Toronto, for $40 billion, underlining how would-be buyers can become targets themselves.

For McTaggart, Grupo Mexico SA and Antofagasta Plc may eventually become takeover targets, though both have controlling shareholders with large blocks of stock which may prevent sudden changes in control.

Metals Surge

Vancouver-based Teck Cominco Ltd., the world’s largest zinc producer, is focusing on smaller acquisitions after failing this year to buy Inco, Chief Executive Officer Don Lindsay said on a conference call with investors last month.

Metal prices are surging as China’s booming economy fuels demand for the raw materials needed for cars, factories and appliances. China’s gross domestic product expanded 10.4 percent in the third quarter, faster than any other major economy. Nickel and zinc have doubled this year. Copper has climbed more than 50 percent.

“So many mining companies are cash-rich at the moment, that it’s inevitable that M&A activity in this sector will continue,” said Rod Beddows, chief executive officer of London- based Hatch CF, a merger and acquisition advisor to the mining industry.

“Some from emerging markets such as Brazil, Russia and India are still undiversified,” he said. “Some of them are trying to reach the status of being global, diversified companies.”

Share Rally

Speculation of takeovers in the industry has led to shares of some miners rising this year. Swedish miner Boliden AB’s stock has more than doubled, while London-based platinum miner Lonmin Plc’s shares have gained 90 percent.

Mergers and acquisitions worldwide rose to a record $3.1 trillion this year, surpassing the previous high set in 2000 during the peak of the dot-com boom. Total earnings for the top five U.S. securities firms, including Morgan Stanley and Merril Lynch & Co., through the first nine months was $21.4 billion, surpassing the full-year record of $20.4 billion in 2005.

Takeovers involving a steel or mining company accounts for 7 percent of all deals this year, up from 3 percent last year, data compiled by Bloomberg show.

Recent takeover attempts have also included steel companies. Evraz Group SA, a steelmaker partly owned by billionaire Roman Abramovich, yesterday agreed to buy Oregon Steel Mills Inc. for $2.3 billion in the biggest-ever U.S. purchase by a Russian company.

Cia. Siderurgica Nacional SA of Brazil on Nov. 17 offered $8 billion for Corus Group Plc to create the world’s fifth- biggest steelmaker, countering a bid last month by Tata Steel Ltd.