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Mining stocks take a knock on JSE profit taking

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South African mining stocks, including Kumba Iron Ore, Thungela Resources and Sibanye-Stillwater, made up the worst performers on the JSE in June.

SA mining stocks made up the worst performers on the JSE in June, with the exception of Pan African Resources which notched up a 50% year-to-date strengthening. File picture: Nhlanhla Phillips, Independent Newspapers

MINING companies’ stocks on the JSE slumped on Monday on profit taking after last week’s rally in resource shares, with this week’s softer opening for commodities companies coinciding with metal prices starting the week weaker.

SA mining stocks, including Thungela Resources, Sibanye-Stillwater and Kumba Iron Ore, made up the worst performers on the JSE in June, with the exception of Pan African Resources which notched up a 50% year-to-date strengthening.

However, last week, the South African mining stocks firmed up from midweek trade, with resource-linked stocks rebounding by 0.80% on Friday.

The week, however, began on a different note on Monday on the JSE as most of the counters under the resource index slumped.

“It seems to just be a bit of mild profit taking after a strong week last week,” Roy Topol, portfolio manager at Cratos Asset Management, told Business Report in an interview.

While Anglo American Platinum (Amplats), Impala Platinum (Implats) and Northam Platinum advanced 2.8%, 2.6% and 2.0%, respectively on Friday, joining gold miners such as AngloGold Ashanti, Harmony Gold Mining, Gold Fields and Sibanye Stillwater which gained 2.2%, 2.1%, 1.4% and 1.1% a piece, Monday’s trade session was dominated by falling resources stocks.

African Rainbow Minerals was nearly 2% weaker in afternoon trade on the JSE on Monday at R234.67, although it was firmer in the past seven days, 30 days and year to date comparatives.

Implats and South32 were softer by more than 3% on the JSE yesterday, trading at R95.05 and R45.38 per share, respectively, in the afternoon. Gold Fields was weaker by about 1.05% during the same session at R286.75 per share. ArcelorMittal South Africa and Kumba Iron Ore were also trading marginally weaker while Sibanye-Stillwater was also softer.

However, there were some gains in Thungela, which inched up 0.21% to R116.75 and in Exxaro which was trading 0.37% stronger at R191.60 in the JSE’s afternoon trade session.

Amplats was also trading 1.78% stronger in the afternoon on the JSE at R643.24, extending its 17% and 23% weakness for the past 90 days and six months.

According to Topol, a number of commodities opened the week weaker, which also knocked down some of the value from the SA mining stocks.

“Most commodities are a bit softer today, down around 1-2%, so the performance seems to be in-line with the mild weakness in commodity prices,” Topol said.

Market analyst Marco Olevano said on Monday that “PGM basket prices (are) approximately $400 below the all-in sustaining cost producer curve for major African and North American PGM mines, which means at current levels they are still operating at a loss” largely.

Gold prices declined 0.3% early yesterday to trade at $2,383.85 (around R43,267.12) per ounce despite gaining 1.5% to close at $2,391.46 per ounce on Friday, “as softening labour market data raised expectations for rate cuts by the US Federal Reserve in September,” according to Anchor Capital.

In June, mid-tier gold producer Pan African Resources reigned supreme for a second consecutive month with a 47.9% year-to-date gain after its share price rose a further 0.7%.

Last month, Pan African said it had concluded a milestone five-year wage agreement with the National Union of Mineworkers at its Barberton Mines operations.

BUSINESS REPORT

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