SA mining stocks at 11-year high thanks to gold and iron ore

Nairobi — The twin tailwinds of rallying iron-ore prices and gold’s safe-haven appeal have driven SA mining stocks to an almost 11-year high.

Johannesburg’s FTSE/JSE Africa Mining Index gained as much as 1.7% Thursday to the highest since July 2008. Anglo American, BHP Group and AngloGold Ashanti  have contributed most to this year’s 28% advance for the sector. The rand’s 3.4% decline against the dollar in the past month has also boosted the outlook for local miners.

“We have seen a recovery in commodity prices, and that is positive for the share prices of mining companies, and the rand has also been weaker, which is helpful as the companies sell in dollars,” said Izak van Niekerk, a money manager at Mergence Investment Managers in Cape Town.

Iron ore prices have risen 50% since January to the highest since 2014, after disruptions to supplies in top exporters Brazil, where a deadly tailings dam disaster harmed production, and Australia, where miners have contended with the effects of storm damage, ignited forecasts for a global deficit.