Miners lead US market

March 24-30 was a generally good reporting period for U.S. markets, but no more so than among the metal producers. Both major market indices advanced, with the Dow up 3.2% and the S&P 500 up 3%.

Buy-ins and sellouts made the news in the mining equities, as Norilsk Nickel bought out the 20% interest in Gold Fields held by Anglo American, and Freeport-McMoRan Copper & Gold bought back the 12% shareholding owned by Rio Tinto.

The Norilsk deal saw Anglo sell its 98.5 million Gold Fields shares at R77.50, for a total purchase price of US$1.2 billion. Norilsk shares, traded on the pink sheets, finished at US$76, while Gold Fields was up US50 at US$13.11 and Anglo American rose US48 to US$24.33.

Freeport’s buyback deal with Rio Tinto had a price tag of US$882 million and sees Rio return 23.9 million shares of Freeport that it bought in 1995 for US$20.90 per share — just about doubling its money. The deal was conditional on an issue of US$1.1 billion in convertible preferred shares, which came through on March 30. The new shares can be converted to 20.7 million common shares of Freeport.

Rio Tinto shares rose US$2.75 to US$101.60, and Freeport shares tacked on US33 to finish at US$39.28.

Almost all the other mining stocks advanced. On the base metals side, Phelps Dodge added US$4.13 to close at US$82.71, and BHP Billiton was up US37 at US$18.68.