Production in South Africa’s mining sector has decreased by 4.3% year-on-year (y/y) in April 2018, Statistics South Africa announced on Thursday.
Seasonally adjusted mining production decreased by 2% in April 2018 compared with March 2018. This followed month-on-month (m/m) changes of -3.5% in March 2018 and 0.2% in February 2018.
According to the data, the largest negative contributors were platinum group metals (PGMs), which declined -6.5%; “other” metallic minerals (-36.3%); diamonds (-24.1%); and gold (-5.7%).
On the other hand, the main positive contributors were manganese ore (116.5%); coal (10.6%); “other” non-metallic minerals (78.1%); and iron ore (12.3%).
Seasonally adjusted mineral sales at current prices increased by 3.0% in April 2018 compared with March 2018. This followed m/m changes of -0.8% in March 2018 and -4.1% in February 2018.
In the three months ending April 2018, the seasonally adjusted value of mineral sales at current prices was 6.2% lower compared with the previous three months.
fin24 quoted Investec economist, Lara Hodes, who commented that the rate of contraction in mining production decelerated by -4.3% y/y in April, from -8.5% y/y in March. This was below consensus expectations of a -3.6% dip.
Hodes said, in the first quarter of the year, the decline in mining production was a significant contributor to the contraction in gross domestic product (GDP). Specifically, the mining and quarrying sector fell by 9.9%, translating into a negative contribution of -0.8% to first-quarter GDP in 2018.
“Looking at a disaggregation of the data for April 2018, while most of the mineral groups contracted over the period, the 4.3% y/y deterioration was primarily underpinned by a 6.5% y/y decline in PGM production. Based on their substantial weighing of 23.3% of the minerals basket, PGMs, therefore, detracted 1.5% from the headline outcome,” said Hodes.
She hoped that a revised charter, once it had been finalised, with a target date set for would assist in decreasing policy uncertainty that has been weighing on the sector.
Sourced from fin24 and edited for African Mining Brief Online