Mining Journal > Finance > Stockpile: Mining stocks again struggle on London market

Finance

Mining stocks again had a tough week on the London main market as few commodity prices showed improvement from recent drops.

Markets throughout Europe were on edge for much of the week amid news of debt-stricken Greece’s credit rating being downgraded to ‘junk’ status.

The major miners figured heavily amongst those to fall in value. Rio Tinto was the most notable with 7.8% slide, while Xstrata plc and BHP Billiton posted losses of 4.5% and 2.7% respectively.
Another company to suffer was UK Coal plc with a 7.5% fall after it reported a pre-tax loss of more than £129 million (US$197 million) for the 2009 fiscal year.

To top off a difficult week for UK Coal, its poor financial situation put talks of a merger with energy support service group Hargreaves Services plc on hold after the two companies started exploring a possible deal last month.

International Ferro Metals Ltd was the biggest faller of the week with a 9.9% drop. Others to also move downward included Talvivaara Mining Co (4.5%), Anglo Pacific Group (5.7%) and Hochschld Mining plc (5.4%).

At the other end, Randgold Resources Ltd performed well after announcing its Tongon mine will open in October. The Jersey-based miner was the biggest gainer of all mining stocks, albeit barely a 4% rise.

The price of gold was a rare commodity to finish in positive territory, but it was only Randgold that was able to follow the precious metal’s lead.

Elsewhere, FTSE newcomer African Barrick Gold plc and Centamin Egypt Ltd both lost ground, each falling close to 2%.

Diversified miner Eurasian Natural Resources Corp (ENRC) was the next biggest riser of the miners after announcing it has purchased a 12.2% stake in South African company Northam Platinum Ltd.
ENRC, which already operates in ferroalloys, iron ore, aluminium and energy, gained 2% on the news.

The HSBC Smaller Mining Companies Index fell 1.4% this week, outperforming the overall Global Mining Index which was down 2.1%.

Gold was a strong flavour amongst the top gaining small stocks this week.

Goldstone Resources Ltd and Ovoca Gold plc gained the most adding 31.5% and 25% respectively with no corporate news.

Meanwhile Thor Mining plc gained 25% after releasing an updated on one if its, you guessed it, gold projects.

Other notables included Cluff Gold plc, up 9% after updating the market on a possible offer first announced several months ago.

The company said: “the board has now asked all interested parties to finalise offers or conclude discussions relating to the bidding process in the near future.”

It wasn’t all gains for the gold juniors however, with Pan African Resources plc, falling 10%. Last week the company received new order mining rights for its gold mines in Barberton South Africa.

Western Coal Corp fell 8.6% after announcing its intention to redeem all of its outstanding debenture notes.