Proposals sink SA shares

The stocks of South African-based miners headed south during the report period ended July 30 as political risk made a stark reappearance.

In a document leaked to a Johannesburg-based web site in late July, the South African Department of Minerals and Energy proposed that black empowerment groups should hold 51% of the equity in all new mining projects and up to 30% of any expansion of existing projects.

While most South African stocks fell sharply and then recovered after the leak, the general trend has been downward relative to the companies’ North American and Australian cousins: Anglo American dropped 92 to US$13.38; Harmony Gold plummeted $1.18 to US$11.77; Durban Deep fell 66 to US$2.97; AngloGold edged up 3 to US$22.26 but was trading at US$21 at presstime; and Gold Fields touched US$9, recovered 80 to US$10.78 but then fell below US$10 at presstime.

Among the remaining U.S.-listed gold majors: Newmont Mining rose $1.52 to US$24; Ashanti Goldfields sank 79 to US$4.21; and Compania de Minas Buenaventura fell $1.55 to US$21.06.

In the base metals sector, Alcoa advanced $2.33 to US$26.13 as it announced it would idle or eliminate aluminum production at three U.S. plants; Phelps Dodge rose $2.81 to US$34.81; BHP Billiton was up 4 to US$10.35; Freeport-McMoRan Copper & Gold shot up $2.60 to US$15.55; Rio Tinto advanced $3.45 to reach US$70.05; and WMC recovered 5 to close at US$17.65.