BUSINESS MAVERICK: The sun is rising on SA mining shares while setting on the industry

The prices of JSE-listed mining shares have surged in 2019, leaving most other sectors in the dust. In the year to date, the bourse’s mining index has risen by about 25%, compared to about 10% for the all-share index. The gold index has added a hefty 50%. Shares in Impala Platinum, which sank for years, have more than doubled their value in the year to date after nose-diving for years.

There are a number of factors behind this rebound. Platinum companies, notably Amplats, have made profitable transitions to mechanisation and undergone restructuring. Labour is the sector’s biggest cost and there are fewer miners working underground because unprofitable operations have been shafted. The number of workers in the platinum mining sector has declined from around 200,000 in 2008 to under 170,000 last year, according to the Minerals Council.

Not really, according to industry watchers. Lara Smith, managing director at mining consultancy Core Consultants, toldPrecious metals in general are coming up and feeding into stock prices. But South Africa still has all the legacy issues and bad policies. In fact, I have eight producing South African mines given to me as a list for sale. Investors just want out. And earlier this year I was given a list of 20 mines, mostly in South Africa.

So portfolio investors are piling into South African mining equities, but operational capital, which is directed to long-term stuff such as exploration and the building of new mines or the expansion of existing ones – and in mining, the time-scales are generally in the decades – is not being sunk into new projects. And JSE-listed companies that are investing in expansion generally are not doing so in South Africa, or at least not much.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

BUSINESS MAVERICK: Hydrogen fuel-cell cars could spell boom or bust for SA platinum industryEffervescent multi-entrepreneur Elon Musk famously described hydrogen-powered fuel-cell cars as ‘mind-bogglingly stupid’. The 200,000-plus people employed in SA’s platinum mines better hope he is wrong, because if he is right, the platinum industry is destined to go the same way as SA’s gold industry.
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: Monday, July 22: Five Things You Need to Know to Start Your DayHong Kong protests descend into violence again, the U.K. steps in to lower Iran oil tensions, and Japan’s Prime Minister Shinzo Abe falls short of a supermajority despite election win. Here’s what’s moving markets.
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: India Closely Monitoring 50 Shadow Banks for Signs of ContagionIndia’s central bank is seeing “signs of fragility” in some of the 50 mortgage lenders and other shadow banks it is monitoring to prevent the spread of a crisis that followed the collapse of a non-bank lender last year.
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: Oil Extends Gains as Iran’s Seizure of Tanker Keeps Tension HighOil extended gains as tensions in the Persian Gulf remained elevated after Iran seized a British tanker, and Libyan production fell after an unidentified group reportedly shut the country’s largest field.
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: From Tesla to Twitter; the mixed-bag results season so farThe upbeat picture painted by July's blowout bank earnings heralded a promising earnings season. Too bad other industries didn’t get the memo.
Source: dailymaverick - 🏆 3. / 84 Read more »

BUSINESS MAVERICK: Community wants ConCourt to declare R5bn Lonmin deal illegalSix North West mining communities have launched an application at the Constitutional Court to appeal against a Competition Appeal Court judgment that paved the way for the more than R5-billion merger between Sibanye and Lonmin to be approved. They want both companies to restart merger talks, this time involving Rustenburg mining communities.
Source: dailymaverick - 🏆 3. / 84 Read more »