JOHANNESBURG (miningweekly.com) – Although recent updates from the International Monetary Fund and World Bank forecast a moderate recovery in global mining growth, which reached a post-crisis low in 2016, the contraction in South Africa’s mining production still deepened by 4.2% year-on-year in November, from a contraction of 2.6% year-on-year in October.

The decline was broad-based, dragged down particularly by a decrease in the production of gold, down 9.4% year-on-year, an 8.7% fall in iron-ore, a 10.8% decline in platinum-group metals and drops for chromium ore, coal and other nonmetallic minerals.

“The only mineral that made a notable positive contribution to the yearly figure was manganese ore where production was up 26.9% and contributed 1.5 percentage points,” financial services firm Investec said in a statement on Tuesday.

On a seasonally adjusted basis, mining production decreased by 3.9% month-on-month in November and 1.5% quarter-on-quarter for the three months to November. The main drag on the quarterly number was the platinum group metals category that subtracted 1.6 percentage points.

“The three-month measure signals that the mining sector could make a negative contribution to fourth-quarter gross domestic product growth. Specifically, seasonally adjusted production would have to rise by over 9% in December for the three-month rolling measure to turn positive for the fourth quarter,” stated Investec economist Kamilla Kaplan.

She further pointed out that although commodity prices were expected to register a moderate increase, prices would remain below their post-crisis averages. “The risks to these forecasts are assessed to be to the downside albeit with the potential for upside risks to manifest,” Kaplan said.

On a positive note, banking firm Nedbank noted that mining figures were volatile and had little influence on monetary policy decisions in the short term.

“The Reserve Bank will look to the rand and its impact on inflation and inflation expectations when deciding on rates. The upside risks to the inflation outlook have eased noticeably and the rand has held up relatively well against most major currencies so far in January.

“These developments have reduced the chances of further monetary tightening in early 2017. Interest rates have probably peaked. We still expect the Monetary Policy Committee to remain cautious, leaving rates at current levels for some time,” said Nedbank.