Mining production suffers surprise contraction in August
Stats SA says platinum group metals led the decline, contributing three percentage points to the headline figure
10 October 2019 - 12:01
bykarl gernetzky
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
SA’s mining sector suffered a surprise 3.2% contraction in August, suggesting the economy struggled to gain momentum in the third quarter of 2019.
Economists polled by Bloomberg expected production to remain unchanged in the sector, which accounts for about 8% of GDP, and was a key contributor to growth in the second quarter.
Platinum group metals (PGMs) led the decline, Stats SA said on Thursday, falling 12.5% year on year, and contributing three percentage points to the headline figure.
Diamond production fell 29.8%, adding 1.4 percentage points to the decline. Manganese production jumped 34.3% year on year, offsetting the fall by 1.8 percentage points.
Investec economist Kamilla Kaplan had expected a contraction in the sector, citing weak domestic demand and international uncertainty.
“Underlying output activity is constrained by a persistently uncertain policy environment, an escalation in operating costs and periods of labour unrest,” Kaplan said ahead of the release.
“The sector also faces an increasingly challenging global environment as slower growth, particularly in China and the US, would dampen the global demand for commodities,” she said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Mining production suffers surprise contraction in August
Stats SA says platinum group metals led the decline, contributing three percentage points to the headline figure
SA’s mining sector suffered a surprise 3.2% contraction in August, suggesting the economy struggled to gain momentum in the third quarter of 2019.
Economists polled by Bloomberg expected production to remain unchanged in the sector, which accounts for about 8% of GDP, and was a key contributor to growth in the second quarter.
Platinum group metals (PGMs) led the decline, Stats SA said on Thursday, falling 12.5% year on year, and contributing three percentage points to the headline figure.
Diamond production fell 29.8%, adding 1.4 percentage points to the decline. Manganese production jumped 34.3% year on year, offsetting the fall by 1.8 percentage points.
Investec economist Kamilla Kaplan had expected a contraction in the sector, citing weak domestic demand and international uncertainty.
“Underlying output activity is constrained by a persistently uncertain policy environment, an escalation in operating costs and periods of labour unrest,” Kaplan said ahead of the release.
“The sector also faces an increasingly challenging global environment as slower growth, particularly in China and the US, would dampen the global demand for commodities,” she said.
gernetzkyk@businesslive.co.za
Technology advances in the mining sector
Perceptions of risk raise hurdles to mining investment
ECONOMIC WEEK AHEAD: Global slowdown expected to take a toll on factories and mining
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
Perceptions of risk raise hurdles to mining investment
Coal is not a dark demon of devastation
Tongaat takes page out of Steinhoff rule book
Rand firms amid talk of a US-China currency pact
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.