KEY POINTS
- South Africa’s mining output fell 7.5% year-on-year in July.
- PGM, coal and iron ore production recorded major declines.
- Mineral sales dropped 5.6% year-on-year and 15.1% month-on-month.
South Africa’s mining sector recorded a sharp decline in July, with production falling 7.5% year-on-year as weaker output from platinum group metals, coal and iron ore weighed heavily on the industry.
Data from Statistics South Africa (Stats SA) showed that platinum group metals (PGMs) recorded the biggest decline among the major mining sectors, with production falling 13.5% year-on-year.
The PGM decline reduced overall mining production growth by 3.2 percentage points, making it the largest negative contributor to the sector’s July performance.
Coal production also weakened during the month, falling 7.5% year-on-year and reducing overall mining growth by two percentage points.
Iron ore production declined by 8.1%, contributing a further 1.3 percentage points to the overall contraction.
The declines underline continued pressure on some of South Africa’s key mineral industries, particularly commodities that play an important role in the country’s export earnings and industrial activity.
Mining output also falls month-on-month
The weakness was not limited to the year-on-year comparison.
Seasonally adjusted mining production fell 1.9% month-on-month in July, following a marginal 0.1% increase in June and a much sharper 5.6% decline in May.
The figures indicate that the sector continued to struggle to build momentum during the third quarter, despite the improvement recorded in June.
Over the three months to July, seasonally adjusted mining production declined 5.5% compared with the preceding three-month period.
PGMs again accounted for the largest share of the decline, with production down 14.3% over the period and contributing 4.2 percentage points to the overall fall.
Manganese ore production declined 6.7%, while gold and iron ore production fell 4.6% and 2.7%, respectively.
The decline in production was accompanied by weaker mineral sales.
Mineral sales at current prices fell 5.6% year-on-year in July. Gold was the largest negative contributor, with sales dropping 33.4% and accounting for an 8.5 percentage-point reduction in overall growth.
Sales of other non-metallic minerals declined by 26%, contributing another 0.7 percentage points to the contraction, while nickel sales plunged 51.7%, reducing growth by 0.4 percentage points.
