Mining Journal > Finance > London Stockpile: Happy New Year for UK miners

Finance

The inevitable optimism that comes with the New Year must have been felt strongly in the UK, with investors backing mining stocks across the board last week.

All of the Main Market's mining constituents posted gains during the first five trading days of 2010. Central Rand Gold had the best showing; up one-third and boosting its market cap to £42 million.

Russia's third-largest gold producer, Petropavolvsk, continued its stellar gains from late-2009, firming about 14% to be valued at more than £2.1 billion on Friday. It just missed out on promotion to the FTSE 100 index at the end of the year, but is seemingly assured of inclusion in the next quarterly review. The company recently signed a US$150 million working capital debt facility.

Xstrata made the news with various strategic moves this week, including approving the cost for its share of the expansion of the large Antamina copper-zinc mine in Peru.

Xstrata, which owns 33.75%, along with BHP Billiton (33.75%), Teck Resources (22.5%) and Mitsubishi Corp (10%) will split the US$1.3 billion bill to increase the mine’s ore-processing capacity by 38% to 130,000t/d. In 2008-09, Antamina produced 320,000t of both copper and zinc in concentrate.

Xstrata lifted 11% by week-end. Also pushing its stock higher was the end of a week-long strike at its Altonorte copper smelter in Chile.

The end of the strike, along with workers agreeing to a new wage structure at Codelco's Chuquicamata mine, should bring stability to the copper industry in Chile, the world's largest producer of the metal. The industrial action had helped push the price of copper up to a 17-month high of US$7,500/t earlier in the week.

BHP Billiton and Rio Tinto gained about 7% and 4% respectively on the London bourse.

The Alternative Investment Market performed particularly well this week, with the FTSE AIM All-Share Index strengthening 5%.

African Consolidated Resources continued on its yo-yo trajectory of massive gains followed by significant drops. Luckily for the company, this time around it was the former; beefing up a substantial 58% by Friday.

Other big movers were Thor Mining and Aurum Mining. Thor, which is focused on molybdenum and uranium projects in Australia’s Northern Territory rose about 30%, boosting its value to more than £800 million.

Former-USSR focused Aurum jumped 27% to £468 million. The company’s flagship asset is the Andash gold-copper project in the northwest of the Kyrgyz Republic on the border with Kazakhstan.

Significant falls were suffered by Emerging Metals, dipping nearly 20% and Ariana Resources, which slumped 17%.