Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Mine production in South Africa decreased 10.1% year-on-year in August, as platinum group metals (PGMs) production fell 45%, diamond output 30.2% and other nonmetallic minerals 24.1%.
Seasonally adjusted mining production fell 3.1% month-on-month in August, while mine output, on a seasonally adjusted basis, for the three months ended August 31, was down 1.1% on that produced in the three months ended May 30.
Mineral sales, meanwhile, decreased 5.9% year-on-year in July, with eight of the 11 mineral groups and minerals having recorded negative growth rates.
The largest changes were recorded for PGMs, contributing -2.3 percentage points; coal, contributing -2.2 percentage points; iron-ore, contributing -2 percentage points; manganese ore, contributing -1.4 percentage points; and copper, contributing -0.3 of a percentage point.
On a month-on-month basis, seasonally adjusted mineral sales increased 6.5% in July, marking a turnaround from the month-on-month decreases of 7% and 3.8% recorded in June and May.
BNP Paribas Cadiz Securities analyst Jeffrey Schultz commented that the disappointing production figures highlighted the severe pressure facing the mining sector, following the "damaging" industrial actions in the first half of the year.
"We fail to see evidence at this stage of some producers’ recent comments which indicate a faster return to ‘normal’ production than envisaged. The sector looks very likely to contribute negatively to third-quarter production-side gross domestic product growth, in our view.
"With global commodity prices under pressure thanks to a stronger US dollar and weaker Chinese activity, coupled with rising domestic input costs through above-inflation wage increases and higher domestic electricity prices from next year, it seems there is no easy outlook for this side of the economy," he noted.