It all started with Canadian mining company Inco Ltd. saying that it wanted to acquire nickel miner Falconbridge Ltd.

Then Teck Cominco stepped in to make a play for Inco and was soon followed by Swiss-based Xstrata with a bid for Falconbridge.

Making the scenario more interesting, U.S.-based Phelps Dodge proposed a three-way with Inco and Falconbridge to form a North American mining powerhouse. That failed but Phelps said it still wanted Inco.

Now, Brazil's CVRD has also set its sights on Inco.

And market speculation has Phelps Dodge possibly becoming an acquisition target and that a Grupo Mexico executive was in New York this week for exploratory talks about that company.

The rumor drove up Phelps Dodge stock 4 percent on Thursday when other mining stocks were down, and it prompted Grupo Mexico to deny that its chief financial officer was even in New York.

After 10 months of a numbing merger free-for-all in the mining industry, only one transaction so far looks like a done deal - Falconbridge's board has recommended its shareholders accept the Xstrata offer.

All the excitement is a stunning turnaround for an industry that was anemic just three years ago. The catalyst has been China and its industrial growth, driving demand and prices for copper and other metals. Copper, for example, is selling for roughly five times what it went for in 2003.

One company gets in play and everyone wants in, said Peter Schiff, president of broker-dealer Euro Pacific Capital, in Darien, Connecticut. Everyone always wants to get bigger.

These resources are valuable, so there's good reason to acquire them,' he said. If you can pay cash, rather than diluting your shares, that's better. This sector is where the growth will be.

Asked how long the consolidation might continue, Schiff said it depended on how long metals prices stay high.

There is no end in sight. Some prices will get to ridiculous levels, but we are not anywhere near that yet, he said.

Frank Holmes, chief executive of U.S. Global Investors, a $5 billion fund, agreed that soaring prices were fueling the merger madness.

The thing is, there is no major new copper discovery, or gold, Holmes said.

The big opportunities are in poor countries where the policymakers are unsophisticated. So miners are turning to each other, he said.

North American assets are very valuable, so where would you rather be, Uzbekistan or Canada? An ounce of gold is worth more in Nevada or Canada.

Gerald Dickey, spokesman for the United Steelworkers (USW) in Pittsburgh, said consolidation in the 1990's was good for the steel industry and the same principle applied to mining.

There were too many steel companies and they were hemorrhaging red ink. The Asian financial crisis started the blood bath and everyone was slashing prices.

(But) In the steel industry you have to have (good) pricing, so consolidation was beneficial, said Dickey. Now we have big companies and we find they are more healthy as far as commitments to contracts, pay and benefits.