I've long contended that copper producer Freeport-McMoRan (NYSE: FCX) was an excellent candidate for an acquisition by Brazil's giant mining company Vale (NYSE: VALE). It turns out that, I was right about the copper part, but wrong about the size and type of red metal company that Vale was willing to bight off.

It turns out that Vale is launching a public tender offer for potentially all of copper refiner and processor Paranapanema S.A. The deal could be worth roughly $1.1 billion, and would provide Vale with Brazil's only London Metals Exchange certificated cathode producer. The big miner can currently produce about 300,000 metric tons of copper per year. But clearly, Vale is desirous of becoming a far larger factor in copper. With contributions from new projects in Chile and Brazil, it expects to be able to produce 39% more by the end of next year, with a goal of hitting 1 million tons annually by 2016.

Nevertheless, it would still be far behind such producers as BHP Billiton (NYSE: BHP) and Freeport, to say nothing of Chile's state-owned producer, Codelco, which is capable of cranking out 1.7 million tons of copper per year.

But Brazil appears to be worth the effort. The resource rich country is forecast to expand its copper market by 25% this year. At the same time, Paranapanema will add much needed processing capacity for Vale's contaminant-laden copper. It includes facilities that now are able to refine 220,000 tons a year, but is expanding to them 280,000 tons.

However, Brazil, and even South America, aren't the only games in town for Vale's growing copper capabilities. Indeed, China, the world's largest market for the metal, is expected to expand its usage by up to 12% this year. In fact, the country's total copper demand -- refined and scrap -- may reach 8.96 million tons.

As you likely know, Vale, BHP, and Rio Tinto (NYSE: RTP) control the lion's share of the world's iron ore production, and oligopolies can be a profitable situation for investors. With Vale having mapped a plan to materially expand itself as a copper producer, it also bears watching in that market as well.

Fool contributor David Lee Smith doesn't own shares in any of the companies named above. He does, however, welcome your comments, questions, and kibitzing. The Fool has a disclosure policy.