Power cuts in South Africa have led to production falling by up to one third for some of Anglo American’s key commodities. South Africa’s electricity generator has been struggling all year and had previously warned the big mining companies that they must reduce production or face power cuts.

Consequently, Anglo American has seen Palladium production fall by 25% and Platinum production by 24%. Fortunately for Anglo, their non-South African operations have seen increases in output, particularly iron ore which was up 7%. The share price ended up 20 points yesterday, finishing the day at 3269p

The Chinese state controlled Aluminium Corp of China (Chinalco) has paid £7bn for a 9% stake in in the Rio Tinto Group. This equates to £60 per share which is 20% higher than the £50 per share offer from BHP Billiton. The invetment is the largest deal to date by a Chinese corporation in a foreign business.

The deal represents a strategic move by China, as it has few natural resources of its own, yet has a great demand for such resources given the rapid and continuous development of the country.