In an elaborate whirligig under Switzerland, scientists are smashing atoms to create a little "big bang", but that's nothing.

Back here two companies have created the world's first big whimper by merging.

Since Oxiana and Zinifex got together in March, or rather since Oxiana subsumed Zinifex to form OZ Minerals, the combined market value has shrunk $8 billion, give or take a million. At this rate it won't be the fourth biggest mining company for much longer. Yet for the most part it's not its fault.

The share price hasn't been helped by the accounting oddity of reporting half-year results for the former Oxiana, a full year for Oxiana, and the extra complication of a write-down of value by half of one of Zinifex's recent over-priced acquisitions, not to mention the sale of its refinery and smelting operations.

Analysts have been having a field day with all that, but the consensus view is that the underlying profit, whatever it was, wasn't too good. And there was an overall loss of $432million. But the fundamental problem is the falling price of zinc, even though Oxiana's strength, copper, has been going gangbusters because global supply is, if anything, falling. Besides there's more to the zinc picture, anyway. The price falls caused by a global glut have already triggered the closure of marginal mines, including cutbacks at OZ.

So long as demand holds up as it has for just about every other commodity thanks to China's boom, not forgetting that zinc is used in galvanised steel, the price slump will self-correct soon enough. Meanwhile with a $1 billion-plus war chest OZ is on the prowl for acquisitions in a depressed marketplace having apparently ruled out a share buyback.

Although the stock is supported by analysts, it seems that in the market's mind the zinc price will go on wagging the OZ tail for a while yet.

It also appears that OZ has been the victim of short selling by hedge funds. At least ASIC's ban will remove that problem for a while.

Besides, it'll be a different story when the giant Prominent Hill copper/gold mine starts up.

Almost two-thirds of analysts with recommendations say it's a buy at these prices.

Advantages

- Cashed up

- Weaker dollar

- Diversified metals

- China boom

Disadvantages

- Zinc price

- Rising costs

- Acquisition risk

- Buyback unlikely

Verdict

The most optimistic analyst valuation is $3.15 a share. But in May Zinifex's independent expert valued the would-be OZ at about $4.10 a share. Funny that.