Mining production decreased by 4.2% year-on-year in June, following May’s 1.5% year-on-year dip.
Mining production and sales statistics published by Statistics South Africa (Stats SA) on Thursday show that gold was the largest negative contributor at -16% and contributing -2.1 percentage points, followed by diamonds at -33.2% and contributing -1.7 percentage points.
Platinum-group metals (PGMs) were at -6.3% and contributed -1.6 percentage points.
Investec quoted diamond miner De Beers, which last month stated that demand for rough diamonds remained subdued, as a result of challenges in the midstream, with higher polished inventories, and caution owing to macroeconomic uncertainty.
Seasonally adjusted mining production increased by 3.3% in June, compared with May. This followed month-on-month changes of 3.1% in May and -1.7% in April.
Seasonally adjusted mining production increased by 3.5% in the second quarter of the year, compared with the first quarter of the year.
The largest positive contributors were iron-ore at 11.8% and contributing 1.4 percentage points, manganese ore at 21.2% and contributing one percentage point, and coal at 3.6% and contributing 0.9 of a percentage point.
Investec said that, on a quarter-on-quarter seasonally adjusted basis, which is the measure used to calculate gross domestic product, the mining sector rose by 14.6% in the second quarter of the year.
“Notably, high base effects were mainly responsible for this lift, following the mining sector’s dismal performance in the first quarter, which was undermined by industrial action and extensive rotational load-shedding.
“Overall, the domestic mining sector continues to be plagued by a myriad of regulatory and operational challenges. Therefore, [the sector needs] to focus on improving competitiveness, productivity growth, ensuring predictable and competitive policies and regulations, modernising the sector and working collaboratively to grow and transform,” said Investec.
Meanwhile, Stats SA said mineral sales had increased by 6.5% year-on-year in June. The largest positive contributors were iron-ore at 76.6% and contributing 5.9 percentage points, PGMs at 9.9% and contributing 2.3 percentage points, and ‘other’ metallic minerals at 70.7% and contributing 1.8 percentage points.
Seasonally adjusted mineral sales, at current prices, decreased by 2.3% in June, compared with May.
This followed month-on-month changes of -0.8% in May and 1.3% in April.
In the second quarter of the year, the seasonally adjusted value of mineral sales, at current prices, was 2.6% higher than in the first quarter of the year.News Source: Mining Weekly