Lower PGMs output drags overall mining production down in August
South Africa's mining production decreased by 3.2% year-on-year in August.
"Due to its large weight in the mineral group basket of about 24%, the 12.5% year-on-year decline in the platinum group metals (PGMs) output subtracted three percentage points from the overall sector’s production decline.
"The other large negative contributors were diamonds, which decreased by 29.8% year-on-year, followed by coal, which decreased by 3.4% year-on-year," FNB property and consumer economics senior economist Siphamandla Mkhwanazi commented in a statement issued on Thursday.
A 34.4% increase in manganese ore production, meanwhile, contributed positively to the overall mining production for August.
"With the exception of gold and precious and specialised minerals, the mining sector continues to face headwinds in the form of low commodity prices, slowing growth in China, high input costs and electricity supply uncertainty.
"As such, we expect output to remain relatively subdued in the coming months," Mkhwanazi said.
Nedbank's economic unit agreed that the prospects for strong growth in the mining sector remained weak.
"Domestically, a confluence of elevated operational costs, labour instability and an uncertain policy environment will keep investment and output activity subdued. On the global front, growth hindrances are posed by heightened protectionism, softer global demand and stagnant commodity prices," it stated.
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