JOHANNESBURG (miningweekly.com) – Banking group Nedbank said on Thursday that it seemed South Africa’s mining sector was still “reeling from the devastating effects” of the widespread labour unrest last year, as stagnant gold and platinum output continued to weigh on the country’s overall mining production growth.
Statistics South Africa reported a 7.5% year-on-year decrease in mining output in December, with platinum-group metals (PGMs) the main contributor to the decline, accounting for a 7.1 percentage point drop, followed by gold with a 3.4 percentage point drop.
Positive contributions to December’s output emerged from iron-ore, with 2.4 percentage points, and diamonds, with 2.2 percentage points.
Seasonally adjusted mining production increased by 1.2% in December, compared with November, following month-on-month changes of 12% in November and -8.7% in October.
Meanwhile, mineral sales fell 15.6% year-on-year in November, after dropping by 13.7% in October, owing to gold, iron-ore, other metallic minerals and PGMs.
Gold contributed -5.3 percentage points, while iron-ore and other metallic minerals contributed -4.6 and -3.7 percentage points respectively. PGMs contributed -2.3 percentage points.
“Locally, tough operating conditions persist. Rapidly rising production costs, mainly energy and labour costs, are likely to compel mining companies to scale back operations or even halt them in some cases,” Nedbank said in a statement.
The banking group further commented that the mining sector would face “headwinds” globally and domestically.
Globally, commodity prices were not likely to make significant gains, as demand conditions remained relatively unfavourable.