Mining stocks on the JSE appear to have ignored the noise around the Covid-19 pandemic with companies in the gold and platinum sector recording positive gains since the easing of the hard lockdown at the end of May.
The rally in the shares has also been in part supported by the strong gold and platinum prices, with gold breaching the $1800 mark this week, up from around $1453 in late December.
Analysts have identified several factors which they believe have helped drive the upward pattern, including role of gold as a safe haven for investors.
"The gold price in dollar terms has done well and the share price of companies usually follow the gold price," said Etienne Le Roux, Investment Analyst at Truffle Asset Management.
"The gold price corresponds with real interest rates, which have been trending down, that is why the gold price price and shares of companies in the gold sector have done well."
Le Roux explained that Platinum Group Metals (PGM) had benefited from the opening up of economies such as China and the US, which has kick-started the demand in the motor manufacturing sectors where some PGM metals are used. He said although the demand for PGMs would be impacted this year, return to production by the motor sectors would benefit producers.
"As the demand globally comes back we expect the supply demand to revert to a deficit."
Since the beginning of June, Anglo American, Anglo Platinum, Harmony Gold and Impala Platinum and Gold Fields which are not yet operating at full capacity since the easing of lockdown regulations have gained close to 7.3%, 21%, 56% and 11.4% respectively.
The JSE All Share Index over that time has remained largely unchanged.
READ | Anglo feels Covid-19 impact, adjusts production forecasts
Local mining companies have had to adapt to new ways of operating as they battle to contain the spread of the virus among employees. Adherence to health and safety means that companies had to slow gradually ease into full operating capacity, with thousands of workers from neighbouring countries yet to return to work due to border restrictions. To date, some 18 of the more than 454,900 workers in the sector have lost their life to the Covid-19 pandemic.
Last month, Amplats said it will get its mines to about 90% of production before the end of the year.
"Investors appear to be overlooking miner's inability to fully ramp up due to ongoing price support. Gold and PGM prices have been robust despite the spectre of Covid-19," said Wade Napier, Diversified Resources Analyst at Avior Capital Markets.
Data released by Statistics South Africa last month showed that mining output in April dropped 47.3% compared with an 18% decrease in March, as the country was under hard lockdown. The drop was the steepest since 1981.