Market Report: Mining strife threat to Anglo American

  • @LauraHChesters

The unrest that struck Lonmin's platinum mines in South Africa is swiftly spreading and has now hit mining giant Anglo American. Anglo American Platinum – Amplats – the world's largest platinum producer, which is 80 per cent owned by Anglo American, has admitted that it has received demands for higher wages from its workers – sparking fears the conflict at Lonmin's Marikana mine, which left 44 dead, is spreading.

The platinum price, in freefall over the past year, rose to a three-month high touching $1,524.49 an ounce yesterday, due to supply concerns from South Africa. It is up nearly 9 per cent so far this year. Prior to the Lonmin clashes, it had been below $1,400 an ounce.

Amplats has received demands for pay rises at its Thembelani mine and sector watchers expect further strife.

Anglo American, down 73p to 1910p, was downgraded by Morgan Stanley along with all its large mining peers.

Mining stocks took a battering after the previous day's rise. The big miners have been hit by weaker prices for iron ore, copper, coal, nickel and aluminium, as well as fears of weaker Asian demand.

BHP Billiton, down 33p to 1947p, ended a poor results season for the sector.

Crisis-hit Lonmin was up 0.5p to 613p as the City took on board the news that it may have to ask investors for more cash.

The FTSE 100 was subdued yesterday after bad news from Japan, still no quick fix for Greece along with weak US data, and ended down 83 points at 5774.2.

The FTSE 250 chemicals maker Yule Catto fell after recording gains over the past two days. Following a profits warning in June, the company's shares had rallied and reached 161p this week but fell back 11.6p to 149.7p yesterday.

Its customers aren't happy, but SSE's shareholders were pleased with the announcement the energy company is to raise prices by 9 per cent in October. It was pushed to the top of the FTSE 100 leaderboard, up 16p to 1354p.

A greater chance of striking black gold in Kenya and Ethiopia has helped Tullow Oil. Africa Oil, Tullow's partner, announced an increase in resources in its Kenyan and Ethiopian exploration properties, adding to a flurry of exploration activity in east Africa this year. Tullow Oil was up 4p to 1379p. Canaccord Genuity rates the stock at hold with a 1350p target price.

Concerns over the outcome of a Financial Services Authority investigation into HomeServe pushed shares down yesterday. The emergency home repairs group confirmed the investigation in May but said as yet there was "no new news". But shares closed down 13.3p to 218p as the City fears the results of the FSA report will prompt another profits warning.

Quadrise Fuels International has announced a deal with a partner of the world's largest oil and gas company – Saudi Aramco. The Aim-listed fuel firm, up 4p to 9.9p, also said it was in advanced technical trials with Maersk, the world's largest container shipping company. Scribes at Westhouse reiterated their buy recommendation on the back of the update.

Is attracting the attentions of an American suitor? The word on the street is that the online-dating business, Cupid Plc, is being eyed up, with its much larger rival mentioned as one that could have the hots for the business.

Smitten brokers in the City reckon a bid of up to 350p a share could be on the cards, a deal that would value the business at towards £284m. That's a hefty premium to the Aim-listed stock price – down 2p to 204p – but fans of the business note that love and sex remain popular pursuits however dire the economic outlook.

Meanwhile, other traders have been getting their hands dirty and dabbling in waste management. Vague rumours of potential bid interest in waste manager Shanks accompanied a share rise of 2.3p to 88p. It had previously attracted the interest of buyout firm Carlyle back in 2009 but talks broke down the following year.

Of the small-caps, electronic component outfit TT Electronics plummeted 30.75p to 137p after it revealed that first-half revenues slipped on the back of tough market conditions.