Mining shares tumble as metal prices fall

Wed May 11, 2011 1:44pm EDT
 

TORONTO (Reuters) - Shares of Canadian mining companies tumbled on Wednesday as a strengthening U.S. dollar and signs of slowing growth in China hurt the prices of both precious and base metals.

Shares of base metal miners First Quantum (FM.TO: Quote), Teck Resources (TCKb.TO: Quote) and Inmet Mining IMN.TO were among the biggest losers on the Toronto Stock Exchange after copper prices fell to their lowest point since December last year.

China's industrial output in April rose 13.4 percent from a year earlier, compared with an average forecast of 14.7 percent and easing from a pace of 14.8 percent in March. Furthermore, Chinese inflation eased in April, suggesting pressures were peaking and would start to ease in the second half of 2011.

Shares of First Quantum were the biggest losers on the TSX down C$10.22, or 8 percent at C$117.60, while shares of rivals Teck and Inmet were down 5.3 and 3.9 percent, respectively.

The prices of both gold and silver also fell as the U.S. dollar strengthened. Spot gold fell more 1 percent to $1498.42 in afternoon trading, while spot silver .XAG was down more than 8 percent at $35.34 at 01:10 p.m. EDT.

The falling precious metal prices hit shares of Barrick Gold (ABX.TO: Quote), Silver Wheaton SLW.TO, Goldcorp (G.TO: Quote) and others on the Toronto Stock Exchange.

Shares of Barrick were down 4.1 percent at C$43.71, while those of Silver Wheaton and Goldcorp fell 6.8 percent and 2.7 percent, respectively.

The S&P/TSX Global Mining Index .GSPTXGM, which includes a wide range of global mining stocks, was down 3.3 percent on Wednesday.

($1=$0.96 Canadian)

(Reporting by Euan Rocha; editing by Peter Galloway)