SHARES in diversified miner Exxaro Resources on Monday fell close to 5% on the JSE by noon, taking its losses to more than 7% since Friday.

The sell-off was triggered by a trading update released on Friday by Kumba Iron Ore, said Drikus Combrinck, portfolio manager at PSG Konsult. The Anglo American-owned miner warned of lower interim profits because of lower iron-ore export prices.

Exxaro has a 20% interest in Sishen Iron Ore Company, a Kumba subsidiary, which accounts for the bulk of the company's production.

Kumba said its headline and basic earnings for the six months to June 30 would be between R7,1bn and R7,5bn, or between R22,10 and R23,40 per share.

"Sishen mine is Exxaro's biggest asset," Mr Combrinck said, adding that China's demand for base metals had slowed in recent months, resulting in lower commodity prices. "With China's second-quarter gross domestic product due for release on Friday, shareholders will be watching it quite closely."

London Commodity News reported last week that Chinese steel futures touched one-month lows last Monday, reflecting a sluggish market.

"The weakness in steel has kept Chinese mills off the spot iron-ore market, forcing sellers in China to cut prices for cargoes from Australia and Brazil, the top two exporters, by another $1 per ton, data from industry consultancy Umetal showed," it said.

At 12.45pm on Monday, Exxaro was trading 4,87% lower at R189,97, its lowest level since the end of June.

Over the past two trading days, the miner's shares have lost 7,5%, while Kumba's shares have shed 5,7%.

With ALLAN SECCOMBE

mahlangua@bdfm.co.za