The latest Deloitte WA Index revealed yesterday that South32’s market cap dropped from $7.799 billion on October 31 to $6.336 billion on November 30.
The news comes just days after Fairfax reported sources as saying South 32 was set to dissolve its secondary London listing as early as mid-next year due to lack of liquidity.
Deloitte said the company’s drop in valuation was a response to poor market sentiment in the mining industry and key commodity price declines, including, alumina, silver, nickel and coking coal.
The company's manganese business also moved towards cutting production during the month, with the closure of several manganese mines in South Africa.
Wesfarmers’ market capitalisation dropped by $1.393 billion (3.1%) last month as low export coal prices continue to hit the company, though its diversity should cushion it from a turbulent commodity price environment.
“With a diversified portfolio, its resources business continues to be burdened by low export coal prices, although the diversity of the group continues to act as a cushion in these turbulent times,” Deloitte said.
Though the Deloitte WA Index decrease during November, with the market cap of WA-listed companies dropping by 4.4% to close at $118.4 billion, emerging metallurgical coal explorer and developer Atrum Coal defied the trend.
Atrum’s valuation actually increased from $85 million to 89 million over the period.
John Wasik, who chaired the company’s AGM on November 27 in place of chairman Bob Bell, said the company was entering a “new phase” in its development, having started with “a small JORC resource and an idea”
In what he conceded had been a challenging year for the company, Wasik said Atrum had progressed its Bulk Sample Permit Application, identified other areas in the Groundhog North Mining Complex that were amenable to lower cost anthracite extraction and progressed sell-down discussions with interested steel mills and traders.
It had also found new potential customers in industrial markets, elected a new chairman, vice president and two additional directors to replace the two directors who resigned mid-year, and identified new potential joint venture partners interested in helping it explore and develop other areas of the Groundhog anthracite project.
“All this while coal markets and commodity markets in general around the world declined, iron ore hit historic lows, and resources fell out of favour with many investors,” Wasik said.
Atrum was able to raise $8 million in these difficult markets, which he said was indicative of the strong support it has from its shareholders.
Junior Coal of Africa’s market cap dropped from $91 million to $80 million.
