The mining sector of the Australian stock market went for a ride in its time-travelling DeLorean sports car this week for a trip back to the future with the all-season favorites of copper and gold making a comeback as resource industry leaders.
“Lithium to the right, lithium to the left, lithium in front” … with apologies to Alfred Lord Tennyson for twisting a few lines from his classic poem The Charge of the Light Brigade, but that’s what the Australian stock market looked like this week - flooded with lithium reports.
The “Trump bump” morphed into Trump Trouble this week as doubts grew about the ability of the new US President to deliver on his tax and other policies, which was good news for gold though, somewhat mysteriously, not for gold mining companies.
Corporate action took centre-stage on mining markets over the past week as an ultra-big ticket deal started to emerge at South Africa’s flag carrier, Anglo American, and two much smaller deals were unveiled in Australia.
Out went yesterday’s market darlings, in came fresh faces, in what was a topsy-turvy week for resource companies on the Australian stock market.
Hit hardest were the one-time leaders of the lithium and graphite sectors, Orocobre and Syrah, which both fell to 12-month lows as investors became more nervous about the troubles which always seem to occur in the transition from exploration and development to production.
Deals drowned discovery and development news in the resources sector of the Australian stock market this week with zinc, lithium, nickel, cobalt and scandium featured in a flow of asset acquisition and joint venture news.
Low-profile Attila Resources, which has just resumed trading at 19c after a long period of suspension, led the way with a proposal to acquire the mothballed Century zinc mine in Queensland and turn it into a tailings treatment project.
Multiple warnings that the iron ore price boom could be running out of steam rubbed the gloss of an otherwise solid week for resource stocks, with cobalt retaining its spot as the speculative leader.
Most share-price moves were modest, up or down, with Fortescue Metals a perfect example of how a strong start to the week faded under selling pressure.
Iron ore and copper continued to dominate mining markets last week but in the background there was an interesting “awakening” of a dormant but once red-hot sector: rare earths.
Lynas Corporation, the RE leader which traded as high as $2.55 in 2011 before crashing under the weight of project construction complexity and lower prices for its cocktail of material, hit a 12-month high of 12c on Wednesday after reporting strong production in the December quarter.