Aim strikes it rich in mining

MINING was the main driver for a bumper year on the junior Alternative Investment Market. This year, 35 new mining and resources companies have come to the market, while 364 that were already listed returned for more funds.

With £481m raised in new offers and £674m in secondary share issues, mining dwarfed other sectors in what has been an impressive year for Aim. More than 1,000 firms are now listed on the market.

More than 10% of Aim-listed stocks are now connected with mining and new mining issues in December alone were worth more than £19m.

Paul Kavanagh, director of broking at Killik & Co, says London will continue to be a magnet for mining stocks. 'I think a lot of the reason is that they are looking for international exposure and London can give them that in a way that their local stock markets cannot.'

Jeremy Wrathall is a non-executive director at Aim newcomer Zambezi Resources, which is exploring copper and gold assets in Zambia. He says London has expertise that cannot be found elsewhere.

'I think it is understanding of Africa. There is no other market where the particular risks and rewards are so well appreciated. There is an appetite you simply do not see elsewhere.'

Analysts believe the current crop of mining exploration firms have pulled off a neat trick. 'It is the China story,' said one. 'The explorers have been able to point to steadily rising commodity prices as a result of China and India's phenomenal growth. So long as Far East growth continues, the mining boom will go on.'