Britain’s Brexit vote causing mining boom
BHP Biliton reported a record loss for the past year, but data from the FTSE 100 shows seven mining companies accounting for close to 5.5 percent of the value of the index.
Jeremy Wrathall, mining team leader at Investec, believes the industry has experienced a “dramatic turnaround” since last year.
“It's now in relatively good shape whereas before we were seeing the likes of Anglo close to relegation."
One reason for the turnaround of fortunes has been the recent Brexit decision following the UK’s referendum vote.
Global mining firms do not make their funds in pounds, allowing them to benefit from the relatively weaker pound since the decision.
Tyler Broda, director of global mining research at RBC Capital Markets told the BBC that the currency markets are playing a big part in the mining industry's success so far in 2016.
"The sector is performing very well this year, they have 100% of revenues in US dollars so the weak pound has helped," he says.
The effect is clear to see. Since the vote on 23 June, share prices of mining companies have risen.
"For a UK investor searching for protection against pound weakness, looking for companies that earn in the dollar is a good idea," says Edward Sterck, metals and mining research analyst at BMO Capital Markets. "They represent a safe haven, but that's not restricted to mining companies."
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