South Africa's mining production down 10.4% y/y in Oct

13th December 2022 By: Creamer Media Reporter

South Africa's mining output decreased by 10.4% year-on-year in October, with platinum-group metals (PGMs), gold, diamonds and manganese ore having made the biggest negative contribution.

Financial services provider Nedbank's economics unit pointed out that this marked the ninth consecutive month of decline in mining production. "Erratic power supply, inflationary pressures, supply chain disruptions and the challenges associated with illegal mining continued to restrict production," it noted in a December 13 statement.

Seasonally adjusted mining production decreased by 2.5% month-on-month in October. This followed month-on-month changes of -0.1% in September and -0.4% in August.

Seasonally adjusted mining production was flat in the three months ended October, compared with the previous three months. PGMs was the largest negative contributor, while gold was the largest positive contributor to the quarterly performance.

Mineral sales, meanwhile, increased by 0.5% year-on-year in October, with coal, gold and chromium ore the largest positive contributors.

Iron-ore, PGMs and ‘other’ non-metallic minerals were significant negative contributors, Statistics South Africa's data reveals.

Seasonally adjusted mineral sales at current prices decreased by 7.7% month-on-month in October. This followed month-on-month changes of -2.8% in September and -1.5% in August.

"The mining sector is unlikely to recover in the year ahead amid the weaker global economic outlook and challenging operating environment. The buoyant demand for some commodities, such as coal and copper (given its increased prominence in the shift to renewable power sources), will be offset by domestic supply constraints and a decline in demand for other commodities on the back of an expected slowdown in the world economy.

"Additionally, the prices of most of South Africa's leading commodities will continue to moderate in the new year and decrease the value of mineral sales," Nedbank's economic unit stated.