Mining production declines 11.6% year-on-year
JOHANNESBURG - MINING production plummeted further in November by an astounding 11.6 percent year-on-year from 5.9 percent contraction in October year-on-year.
Data from Statistics South Africa (StatsSA) yesterday showed that iron ore, platinum group metals (PGM), manganese ore and coal fell to the biggest output decline.
StatsSA said iron ore declined 35.3 percent and contributed -3.9 percentage points, followed by PGMs, which at 16.1 percent, contributed -3.4 percentage points. It said manganese ore also tumbled 15.9 percent and contributed -1.5 percent points, and coal was 5.9 percent contributing -1.5 percentage points.
The agency said seasonally adjusted mining production fell 5.7 percent in November, compared with October 2020. This followed month-on-month changes of -0.7 percent in October 2020 and -0.8 percent in September 2020.
FNB economist, Geoff Nölting, said that mining output took a nosedive, following renewed lockdowns in trading partners.
“This will likely diminish any hopes of a significant recovery in the sector for the fourth quarter, as output levels returned to those of July,” Nölting said. “From January to November 2020 mining production was down 11.8 percent, compared to the same period in 2019.”
Nölting said that the recovery in the mining sector was crucial for the overall economy, as roughly 400 000 people were employed in the sector, which made up a third of export receipts and was an important contributor to the fiscus.
“Lockdowns both domestically and abroad will likely hamper any meaningful recovery in the sector in the short to medium term. Furthermore, if the recent bouts of load-shedding are not addressed, then the longer-term prospects for the industry remain dim, as business confidence will remain low and investment in new projects muted. The sector also
faces other challenges, such as logistical bottlenecks, high electricity costs and low global competitiveness,” Nölting said.
Eskom suspended load shedding on Monday after returning two generation units each at Kusile, Kriel, and one at Tutuka Power Stations to service.
Nedbank Group’s Economic Unit said that the figures were discouraging, and some moderation in the pace of recovery was expected over the final quarter.
Seasonally adjusted mineral sales at current prices decreased by 4.4 percent in November 2020, compared with October 2020. This followed month-on-month changes of 2.6 percent in October 2020 and 4.8 percent in September 2020.