South African mining activity remains weak
Output for December, however, decreased by 0.3% year-on-year, with negative growth rates recorded for iron-ore, down 17.1%; copper, down 15%; manganese ore, down 8.7%; diamonds, down 8.5%; and gold, down 4.9%.
The platinum group metals (PGMs) sector, once again, contributed positively.
BNP Paribas Cadiz Securities economist Jeffrey Schultz commented that PGM production growth remained the strongest positive contributor in December, but warned that this continued to come off a weak base from the 2014 strike action that impacted output in that sector.
“Helpful base effects in PGMs production throughout 2015 will no longer help to prop up headline production growth numbers from January, while sharply lower platinum and iron-ore prices will also not bode well for South Africa’s mining sector and its exports earnings in 2016,” he added.
He pointed out, however, that the weaker rand and higher gold price were propping up gold mining margins and could, if sustained, provide some support to the embattled mining sector, given the gold sector’s more than 21% weighting in the mining production basket.
Meanwhile, seasonally adjusted mineral sales at current prices decreased by 1.8% month-on-month in November. This followed month-on-month changes of 1.4% in October and 1.4% in September.
Mineral sales also decreased by 3.6% year-on-year in November, with the largest contributor to the contraction being iron-ore, nonmetallic minerals and manganese ore.