Mining production continued on its downward trajectory in August, slipping even further by 9.1% year-on-year following July’s 4.1% decline, Statistics South Africa (Stats SA) said on Thursday.
The major contributors in the August decline in mining were iron ore which fell 19.9%, gold at a 15.5% decline, and platinum group metals which declined 7%.
Seasonally adjusted mining production decreased by 1.2% in August 2018 compared with July 2018.
Investec economist Lara Hodes said the decline in mining production was notably above market expectations of a 4% year-on-year fall.
“A disaggregation of August’s data, reveals that the decline in production was generally broad-based, with ten of the twelve mineral groups falling, however the iron ore, gold, and PGM sectors were chiefly responsible for the marked fall,” Hodes said.
“Base effects from last quarter’s lift, coupled with waning commodity prices as indicated by the Economist base metals index, have weighed on production of late. This has been exacerbated by global supply dynamics, and diminishing sentiment, dragged down by fears of mounting trade and geopolitical tensions.”
Hodes said the newly gazetted mining charter, version three, was seen as a workable compromise, creating a degree of regulatory and policy certainty.