03 Oct South African mining companies on the surge
The market capitalisation of 31 South African mining companies grew 50% by the end of August, reflecting the return of investor confidence in gold and platinum.
According to PricewaterhouseCooper’s (PwC) SA Mine report, released last week, the 31 stocks increased by R192 billion on June 2015 to R578 billion.
The South African mining industry continues to struggle because of depressed global commodity prices however investors backed both gold and platinum on this showing.
Gold has been the front runner in 2016 on the JSE. Harmony Gold has performed strongly all year as its shares have more than trebled, the company has a market capitalisation of R21 billion.
Gold companies’ contribution to the total revenue of the 31 firms surveyed leapt to 20% from 15% in 2015. Coal firms retained their top spot as the largest revenue generator, contributing 29% to total revenue.
“Firms had no choice but to cut back on new developments, refocus on profitable production rather than maximum production and to save costs,” said Michal Kotze, PwC’s mining industry leader in Africa.