Statistics South Africa (Stats SA) reports that production from South Africa’s mining industry increased by 10.3% year-on-year in July, with the largest contributors being the production of iron-ore, which was up by 42.9%, contributing 3.9 percentage points to the overall tally.
Platinum group metals (PGMs) increased by 10.3%, contributing 2.3 percentage points; while chromium ore was 45.8% higher year-on-year, adding 1.7 percentage points.
Gold output increased by 13.4%, contributing 1.6 percentage points.
Between June and July, Stats SA notes, seasonally adjusted mining production increased by 4.1%, following month-on-month changes of -1.6% in June and -3.6% in May.
Compared with the first quarter of the year, seasonally adjusted mining production decreased by 1.9% in the three months ended July, with the largest negative contributors being PGMs with -4.2%, lowering the overall tally by a percentage point.
Gold was 3.3% lower, subtracting 0.4 of a percentage point, while iron-ore was 2.4% lower, lowering the tally by 0.3 of a percentage point.
Coal slipped 1.2%, subtracting 0.3 of a percentage point.
In terms of mineral sales, Stats SA reports that sales at current prices increased by 32.6% year-on-year in July, with the largest positive contributors being PGMs, which were 92.8% higher year-on-year, contributing 22.6 percentage points.
Iron-ore rose by 71%, contributing ten percentage points; while coal increased by 6.8%, adding 1.5 percentage points.
Seasonally adjusted mineral sales at current prices decreased by 11.7% in July compared with June, following month-on-month changes of 0.6% in June and -3.6% in May.
In the second quarter, the seasonally adjusted value of mineral sales at current prices was 0.7% lower compared with the first quarter.
First National Bank economist Koketso Mano says total mining production started the new quarter on a “positive footing”, reflecting waning base effects.
“There was a delay in releasing the June numbers ahead of the preliminary second-quarter gross domestic product (GDP) [figures], but today’s figures show that seasonally adjusted mining production was up 0.6% quarter-over-quarter, reflecting that mining indeed contributed positively to GDP.”
She adds that mining production is up 18.6% for the year-to-date, compared with the same period in 2020.
However, Mano warns that there is downside risk to the 1.9% quarter-over-quarter currently estimated.
“There were broad-based gains in mining production year-to-date, with only coal production 4.9% lower than production in the first seven months of 2020.
“Chromium production is up 53.5% year-to-date, building materials up 39.1%; iron-ore 38%; PGMs 32%; gold 18.6%; and other metallic minerals 15.4%,” she says.
Source: Mining Weekly