It's a real shame when the best investments in a sector are all based abroad. It makes them difficult to buy, means that one may have to deal with multiple currencies (one is enough!), tax on dividends can become a nightmare, and may even mean reading annual reports in French and German (life certainly seems too short to read a Geshaefstbericht!). But sometimes there's no choice. For instance in the mining sector, although London has a good handful of mining majors and loads of smaller explorers, many of the most interesting companies have their quotes in the markets closer to where their operations are based - be that Australia, South Africa, or Canada. Which, thank goodness, you'll have noticed are all English-speaking markets. And intriguingly enough, they are also all participating in the Cricket World Cup!
Despite the multitude of recent floats on AIM, London isn't the first market a mining exploration company will look at for finance. In particular, TSX and its Venture market represent a common first choice; mining is much more mainstream in Canada, and it can be easier for a company to attract both finance and the attention of press and analysts. Each market has different strengths and weaknesses - and different stocks represented.
South Africa
South Africa is a key market for those looking for platinum group metals - the country has 80% of world platinum production and nearly 90% of estimated reserves. Listings include a number of major global mining companies, such as Anglo American, as well as smaller producers and explorers. JSE is resources-heavy, with 40% of the market represented by resource stocks. There are no restrictions on foreign shareholders, and foreign companies can list on JSE. Besides the main market, there is now an Alternative Exchange (AltX) along the lines of AIM, with more flexible reporting requirements for junior companies.
Mining companies are required to report according to SAMREC (the South African Code for Reporting of Mineral Resources and Reserves), which was modelled on the Australasian JORC code. (Investors who are really interested can find a report on the different accounting codes, admittedly somewhat dated)
But is South Africa the mining powerhouse it once was? Possibly not. Platinum majors Anglo American and Impala Platinum are quoted on London, while even brewer Sabmiller (LON:SAB) has transferred its main listing to London,…
