Mining takes another knock at the start of 2019
Mining production decreased by 3.3% year-on-year in January, hit by prolonged strikes and slower global growth
The mining sector, which has come under increased pressure in recent months, took another dive at the start of 2019.
Production has been hard hit by continuous strikes in the gold mines led by the Association of Mineworkers and Construction Union (Amcu), as well as slowing global growth. Load-shedding has also threatened to further dent the sector.
Mining production decreased slightly less than expected, by 3.3% year-on-year in January, after a 4.1% contraction in December, revised from 4.8%, data from Statistics SA showed on Thursday. Economists polled by Bloomberg expected a contraction of 3.8%.
Most sub-sectors reported lower production in January compared to a year earlier. The largest negative contributors were iron ore, down 27.7%; gold, down 22.5%; diamonds down 37%; coal down 6.4%; and chromium ore down 7.3%.
Compared to December 2018, mining increased by 0.2% in January.
Stats SA reports that its mining production index, which was set to 100 points in 2015, was 84.7 in January 2019, down from 92.7 in December and 97.6 in January 2018.
The total sales of SA’s mining industry in January came to R41.65bn, a fall from R50.11bn in December 2018, but an increase from R34.45bn in January 2018.
Stats SA shows coal is SA’s biggest revenue earner, with sales of R12.3bn in January followed by platinum group metals (PGMs) with total sales of R8.72bn, and gold at R7bn.