[miningmx.com] – SHARES in Exxaro Resources slipped for the third
successive day on the JSE, registering a 9.5% decline since July 1. The share closed
at R173,61/share on the stock exchange on Wednesday.
A combination of factors are putting pressure on the stock, including expectations
that coal prices could fall under renewed pressure while the group’s 37% stake in
Tronox, a US-listed mineral sands company, is also depressing the share.
Tronox rival Illuka, an Australian firm, recently issued a grim forecast of the
mineral sands business; a view that analysts said had been overdone but which is
contributing to the bearishness surrounding Exxaro.
In addition, Kumba Iron Ore – a company in which Exxaro has a 25% stake –
recently said it expected to produce earnings up to a fifth lower than its previous
financial year.
This was owing to a decline in iron ore prices during the period of which Kumba is to
report, down from $175/t to the current level of $135 to $140/t.
Coal prices have fallen from $110/t in the last year to a low of $81/t ex-Richards
Bay. They have since recovered to $86/t, but analysts said a renewed bout of
pressure on coal thermal export sales was possible with stocks high in China.
