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Mining production contracts while sales soar – Stats SA

9th November 2017

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

     

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JOHANNESBURG (minignweekly.com) – Local mining production decreased by 0.9% year-on-year in September, Statistics South Africa Statistician-General Risenga Maluleke revealed on Thursday.

The largest negative contributors were platinum-group metals (PGMs), with output down 8.3%, followed by iron-ore, which was down by 7.5%.

Nonmetallic minerals and manganese ore made positive contributions, at 32.2% and 35.8% respectively.

Seasonally adjusted mining production decreased by 7% in September compared with August. This followed month-on-month changes of 6% in August and 0.5% in July.

Nedbank Group Economic Unit analysts Johannes Khosa and Dennis Dykes noted that the year-on-year contraction was surprising, but noted that the mining production figures, on their own, would have very little impact on the Reserve Bank’s monetary policy decision.

“So far, figures released for the third quarter suggest reasonable economic momentum. The inflation outlook is still favourable, with the consumer price index expected to remain below the Reserve Bank’s upper target range for the remainder of the year.

“However, rand volatility ahead of the African National Congress’s elective conference in December will reduce the chances of further monetary policy easing this year.

“Going into 2018, there is still some chance of easing but much will depend on exchange rate developments,” said the analysts.

They added that, while mining figures were volatile and regardless of disappointing output in September, yearly growth in mining production was likely to improve in the months ahead, off a low base and supported by higher commodity prices and improving global demand.

“However, general conditions in the mining sector remain fragile owing to policy uncertainty and the challenging operating environment, which will contain investment spending,” the analysts stated.

On the sales side, mineral sales increased by 18.2% year-on-year in August, boosted by coal, which was up 16.1%; manganese ore, which was up 127.1%; gold, which was up 20% and PGMs which were up 10.3%

Seasonally adjusted mineral sales at current prices increased by 4.7% in August compared with July. This followed month-on-month changes of 2.7% in July and -1% in June.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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