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Diamonds|Gold|Iron Ore|Mining|Platinum|Steel|Environmental
Diamonds|Gold|Iron Ore|Mining|Platinum|Steel|Environmental
diamonds|gold|iron-ore|mining|platinum|steel|environmental

South Africa’s Feb mining output down 7.5% y/y

South Africa’s Feb mining output down 7.5% y/y

Photo by Bloomberg

11th April 2019

By: Marleny Arnoldi

Deputy Editor Online

     

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Statistics South Africa (Stats SA) has reported that mining production in February decreased by 7.5% year-on-year.

The largest negative contributors were diamonds, with a 48.3% decrease in output, contributing -3.2 percentage points; gold, with a 20.6% decrease in output, contributing -3 percentage points; and iron-ore, with a 20.7% decrease in output, contributing -2.9 percentage points.

The largest positive contributor was platinum group metals (PGMs), with a 17.8% increase in production, contributing 2.8 percentage points.

Coal production was down 1.8% in February, contributing -0.5 percentage points.

Further, Stats SA noted that, seasonally adjusted, mining production decreased by 1.5% month-on-month in February. This followed month-on-month changes of 0% in January and -1.5% in December.

Seasonally adjusted mining production decreased by 5% quarter-on-quarter for the three months ended February 28.

Investec commented that South Africa’s mining sector continued to be plagued by electricity supply constraints, rising administered prices and waning productivity rates, impeding its effective operational performance.

The company added that a combination of demand and supply dynamics have led to a decline in the production of iron ore. “Muted domestic economic conditions remain a hindrance to fixed investment growth, reducing local demand for steel.

Meanwhile, softening Chinese demand, the world’s largest consumer of metals (in part owing to environmental clampdowns on a number of industries), continues to weigh heavily on global demand for the base metal.

Furthermore, diamond miners are under pressure, with De Beers recently reporting a large dip in diamond sales, underpinned by softening demand for smaller, cheaper gems.

SALES
Stats SA further reported that mineral sales had increased by 10.6% year-on-year in February, with the largest positive contributors being PGMs with 36%, contributing 5.4 percentage points; manganese ore with 44.6%, contributing 3.5 percentage points; iron-ore with 21.3%, contributing 2.7 percentage points; and “other” metallic materials with 51.2%, contributing 1.4 percentage points.

Coal was a positive contributor to mineral sales in February with 0.8%, contributing 0.3 percentage points.

Seasonally adjusted mineral sales at current prices decreased by 5.6% month-on-month in February. This followed month-on-month changes of -3.2% in January and 3.9% in December 2018.

For the three months ended February 28, the seasonally adjusted value of mineral sales at current prices was 4.4% higher than in the prior three months.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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