Shares in the copper miner Kazakhmys fell yesterday after the company revealed its chief executive had resigned, prompting fears that he might sell his 16 per cent stake in the FTSE 100 company.
Sentiment was further undermined by the market's deteriorating regard for commodities, on a poorer outlook for the global economy. The International Monetary Fund's managing director, Rodrigo de Rato, warned yesterday the world's economy "may be turning" down. That led to a sell-off of shares of mining companies, which rely on strong global economic growth to fuel demand for their products.
Lonmin and Rio Tinto lost 3 per cent, while Xstrata, Antofagasta, BHP Billiton and Vedanta all dropped about 2 per cent, helping drag the FTSE 100 down 58.4 points to 5,831.8. Kazakhmys was the biggest loser, with a 4 per cent fall.
Copper futures for December delivery fell 3.55 cents, or 1 per cent, to $3.3790 a pound at the New York Mercantile Exchange, where prices have more than doubled in the past year.
Kazakhmys, which has its operations in Kazakhstan, reported strong financial results for the first half of its year. The high price of copper during the period meant net profits almost tripled to $632.7m (£336.3m), as revenue surged 90 per cent to $2.28bn.
However, the world's 10th-largest copper producer announced that Y K Cha, chief executive since it listed in October, would step down. The Korean plans to leave in December for "personal reasons". Company sources said he wants to see more of his children, who study in Korea. Mr Cha has been on the Kazakhmys board since 2000 and will remain as an adviser.
The fate of his 16 per cent holding in the company was not clear. The lock-up of his stake ends on 7 October. A company spokesman was unable to provide any assurance that Mr Cha will continue to hold the shares, saying only that Kazakhmys would "make a statement at the appropriate time".
Kazakhmys shares have more than doubled since the IPO. Mr Cha, whose role will be taken over by the chairman Vladimir Kim, said: "We are optimistic about copper prices, mainly driven by strong demand from China. China is consuming 25 per cent of world copper production and strong economic growth there is driving demand."Reuse content