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.

The sun rises over St Andrews golf course, but will it be a new dawn for the Royal and Ancient Golf Club?
sportAnd it's Yes to women (at the R&A)
Arts and Entertainment
Liam Neeson said he wouldn't

Liam Neeson's Downton dreams

A 'Sir Alex Feguson' tattoo

Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
voicesApple continually kill off smaller app developers, and that's no good for anyone
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear

Thriller is set in the secret world of British espionage

Life and Style

ebooksAn unforgettable anthology of contemporary reportage
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style

Bomber jacket worn by Mary Berry sells out within an hour

travelWhy Japan's love hotels are thriving through an economic downturn
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week