Mining takes a steep knock due to strikes and load-shedding
Mining production dropped 4.8% year on year in December, which is higher than expected
A strained mining sector, pulled down by the worst gold production performance in six years, will weigh on GDP growth in 2018.
Mining production decreased by a higher-than-expected 4.8% year on year in December, after a 5.6% contraction in November, data from Statistics SA showed on Thursday. Economists polled by macro-economics website Trading Economics expected a contraction of 0.6%.
The sector was hard hit by the continued strike at Sibanye-Stillwater and intermittent electricity from Eskom towards the end of 2018.
For 2018 as a whole, mining production was 1.6% lower compared with 2017.
Seasonally adjusted mining production decreased by 1% in the fourth quarter compared with the previous quarter.
Most subsectors reported lower production in December compared to a year earlier. The largest negative contributors were gold, down 31%; iron ore, down 14.3%; “other” metallic minerals, down 18.4%; copper, down 30.8%; and chromium ore, down 9.3%.
Stats SA reported that its mining production index, which was set to 100 points in 2015, was 92.1 in December, down from 101.4 in November. For 2018, it was 98.5.
The total sales of SA’s mining industry in December came to R49.98bn, an increase from R42.59bn in December 2017 and from R46.61 in November 2018.
Stats SA shows coal is SA’s biggest revenue earner, with sales of R14.72bn in November followed by platinum group metals with total sales of R11.34bn, and gold at R6.24bn.