Mining Journal > Finance > Stockpile:Euro concerns, China curbs knocks miners

Finance

Mining stocks fell again this week as continued Euro zone uncertainty and China’s moves to slow spending knocked the prices of industrial commodities.

Again, concerns over the Euro zone and its currency were seen as a likely catalyst for this week’s lower markets, highlighted by German Chancellor Angela Merkel’s decision to place a ban on naked short selling.

Overall the FTSE250 index shed about 7%, with the Basic Resources index 9.4% down.

In addition, iron ore prices were expected to record their biggest weekly decline in more than eight months, according to Bloomberg, as China moved to slow housing construction, which could potentially lower future demand for steel.

Unsurprising then that Ferrexpo plc, the Ukraine based iron-ore pellet producer, was the week’s biggest faller with a 22% share price drop by lunchtime on Friday.

Even the price of gold, with potential to gain on its ‘fear’ fundamentals and which recently touched a new high, was sold downward in the week.
As a result none of London’s main board mining companies measured posted gains in the week.

Namakwa Diamonds was the best performer in the week, although there was no corporate news to drive. The company does however have an analyst round table scheduled for the first week of June. Updates on the company’s strategic objectives, and its increased resource base are expected.
Anglo Pacific was another outperformer, as the royalty company announced the purchase of an iron-ore royalty covering three exploration licences in the Pilbara, owned by BHP Billiton.

On AIM, resources stocks also had a tough time, although there were a few companies that made gains.
Exploration and development company Chaarat Gold Holdings surged on news that its full year operating losses had narrowed and that one of its project mine plans could change after a recent near-surface discovery.

The company, which has exploration licences in Krgyzstan, moved 25% ahead after announcing its losses had been cut by more than a third from the previous reporting period.

Chaarat also said the mine plan at its eponymous gold mine in Kyrgyzstan could change and is exploring whether open-pit mining methods could be used.
recent gold mineralisation discovery at its eponymous gold project in Kyrgyzstan could change the mine plan in the current prefeasibility study.
A large number of shares in British Columbia company Pan Pacific Aggregates plc changed hands following the release of a positive trading update.
The trading pushed the company’s value nearly 10% higher as it said it had installed a new processing plant to keep up with demand.
Others to enjoy gains were Emerging Metals Ltd and Atlantic Coal plc with advances of 6% and 4.8% respectively.

Amongst the group of companies to suffer substantial losses during the week was Western Coal Corp, which continued a poor recent run by falling a further 21%.

Western Coal’s downward trend started last month (after it announced intentions to redeem all of its outstanding debenture notes) and has flowed on through May.

Petra Diamonds Ltd dropped by 21.5% despite completing a transaction with De Beers to buy the Kimberley underground mine in the Northern Cape.
The most significant fallers on AIM were Rusina Mining NL and African Eagle Resources plc with losses of 23% and 22.5% respectively.