JOHANNESBURG (miningweekly.com) – South Africa’s mining output declined 2% year-on-year in December, as poor performance from the diamonds, iron-ore and platinum-group metals (PGMs) sectors weighed on overall production.
The latest data from Statistics South Africa (Stats SA) showed negative growth rates of -27.9% and -15.6% for diamonds and iron-ore, which respectively contributed -3.5 percentage points and -1 percentage point.
PGMs remained a significant negative contributor in December, registering a -14.9% contraction and contributing -3.1 percentage points.
Coal was a significant positive contributor, with 3.2 percentage points in December, Stats SA noted.
Total mining production was 1.5% lower in 2014 than in 2013, when output had increased by 3.6%.
Meanwhile, seasonally adjusted mining production ticked up 0.9% in December, after a month-on-month change of -1.1% in November 2014.
BNP Paribas Cadiz Securities economist Jeffrey Schultz said this was driven mainly through an 8.2% rise in coal production, which added 2.2 percentage points; a 7% rise in gold production, contributing 1.5 percentage points; and a 2.1% climb in PGMs, with a 0.4 percentage point contribution.
“The largest negative contribution came from iron-ore, which slipped 11.2% (-1.6 percentage points) and is no doubt related to the nearly 50% fall in the metal’s price in 2014 and a slowdown in Chinese demand,” he said.
Mineral sales decreased by 5.8% year-on-year in November, with nickel showing the largest negative growth rate at -38.6%, followed by iron-ore and copper at -15.7% each.
The gold sector recorded an 11.2% decline in minerals sales in the month of November.
The major contributors to the 5.8% decrease were iron-ore, contributing -2.6 percentage points; coal, contributing -1.9 percentage points; and nickel, with a -1 percentage point contribution.
PGMs and gold each contributed -1.3 percentage points.
Seasonally adjusted mineral sales fell 4% during the month under review, following month-on-month changes of 0.1% in October 2014 and 5.7% in September 2014.
In a flash comment to clients, Nedbank’s Economic Unit said mining production was likely to remain depressed in the coming months, as a slowdown in global growth fed into lower commodity prices, in addition to local infrastructure constraints – particularly electricity supply constraints – ensuring output remained relatively weak.
Schutlz added that, amid pressurised commodity prices, weak demand from key trading partners such as China and the risk of further strike activity following this year’s gold sector wage negotiations, he remained cautious on the outlook for the mining sector in 2015.