Market Report: Violence boosts platinum miners

Escalating civil unrest and platinum mine closures don't sound like good reasons to start buying shares in platinum mining companies. But that is exactly what happened yesterday.

As violence spread across South Africa's platinum mines, the price of the metal continued to rocket and punters piled in to mining companies, pushing the shares higher.

Lonmin, the third-biggest platinum producer, failed to meet miners' demands for higher pay of 12,500 rand (£936.93) a month. Lonmin's management offered entry-level workers around 5,500 rand, an advance on the 4,600 rand they are currently paid, but less than half that demanded by National Union of Mineworkers.

When the offer was rejected, fears heightened that the violence – more than 40 people have already lost their lives – at Lonmin's Marikana mine will spread across South Africa's platinum belt.

Aquarius Platinum, up 7.7p to 48.8p and the FTSE 250's biggest riser, took the decision to close its Kroondal platinum mine near Rustenburg yesterday until tomorrow night as a precautionary measure. It follows Anglo-Swiss miner Xstrata which closed its chrome mine near the town for the day.

The day before the world's largest platinum producer, Anglo American Platinum, said it had suspended its Rustenburg operations and Impala Platinum is facing new wage demands.

The closures mean less production. Less production means a slowdown in supply, and prices start to rise.

One mining expert predicted the price of platinum could rise to $2,000 an ounce in the next nine months – it has already risen by 20 per cent to more than $1,650 an ounce in the weeks since the Lonmin shootings during the summer. Lonmin ticked up 29p to 614.5p.

It wasn't just the shortage in platinum that was encouraging investors to rush in.

The new, monthly $40bn (£25bn) cash injections in the US – QE3 – helped London's FTSE 100 punch right through the 5,900 mark, taking the riskier stocks of the mining and banking sectors sky high. The FTSE 100 jumped 95.63 points to 5915.55.

A euphoric City of London was motivated by US Federal Reserve chairman Ben Bernanke's confirmation of QE3 on Thursday evening.

He announced open-ended bond buying to turn around the struggling US economy and stock markets across the world were pumped up on the news.

Mr Bernanke's plan, alongside a better European outlook and continued hopes that China will also issue further stimulus, got investors hungry for risk again.

Miners raced to the top of the leaderboard with Kazakhstan copper miner Kazakhmys leading the charge, up 93p to 773p, as copper prices hit their highest levels since early May.

Roman Abramovich's Russian steel producer and miner, Evraz, booked gains of 34.3p to 293.7p.

Glencore, up 25.55p to 378.85p and Xstrata, 67.5p higher at 1,060.5p, were buoyant on expectations that Glencore's takeover could be approved next week.

Miners on the FTSE 250 also shot up as investors ditched the boring and safe stocks. Ferrexpo, the Ukrainian-focused iron ore miner, jumped 29p to 216.9p.

The top faller on the FTSE 100 was broadcaster BSkyB as Bank of America Merrill Lynch issued a sell note even though it announced a share buyback scheme. It lost 24p to 720p.

Investors also fancied a punt on black gold, particularly the type you find in Kurdistan.

Oil explorers in the region were cheered by the likely end to a dispute over oil exporting and payments between the Iraq government and Kurdistan.

Analysts said Baghdad and Kurdistan were now having "constructive dialogue" with an end in sight.

Tony Hayward and Nat Rothschild's oil explorer, Genel Energy, was boosted by the news, spurting up 26p to 731p. Meanwhile, explorer Afren, which earlier this week confirmed it has begun testing a well in the East Simrit prospect in the Kurdistan region, rose 7.7p to 142.8p.

Aim-listed video search engine firm Blinkx has attracted investors to its stock in recent days. On Wednesday it unveiled a deal with TV sports news agency SNTV and yesterday its shares moved up again, up 7.5p to 66.25p.

Start your day with The Independent, sign up for daily news emails
Sport
football This was Kane’s night, even if he played just a small part of it
Travel
travel Dreamland Margate, Britain’s oldest amusement park, is set to reopen
News
news
News
Founders James Brown and Tim Southwell with a mock-up of the first ever ‘Loaded’ magazine in 1994
media
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss