SA gold mining production down 16.2% in a year - StatsSA

Mine shaft
Mine shaft

South African mining production decreased by 2.6% in May compared to a year ago, Statistics SA announced on Thursday.

The largest negative contributors were gold, which fell by 16.2%, and coal, which was down 4.2%. Production of manganese ore decreased by 23% compared to May 2017. 

Platinum group metals (9.6%), however, made a significant positive contribution, with production increasing by 9.6%. 

"A combination of factors have suppressed activity in the domestic mining sector, inhibiting investment, including persistent policy uncertainty, with issues around the new, proposed mining charter still unresolved," stated Investec in an afternoon note on the findings. 

Seasonally adjusted mining production decreased by 2.6% in the three months ended May 2018, compared to the previous three months.

StatsSA reported that eight out of the 12 mineral groups and minerals reported negative growth rates over this period. 

While production as a whole was down, mineral sales increased by 15.1% year-on-year in May 2018.

Statistics about the decrease on gold production were released as SA gold mines and unions entered wage negotiations on Wednesday.

Employers body the Minerals Council South Africa (formerly the Chamber of Mines) said earlier this week that three-quarters of SA gold mines were unprofitable.

Investec economist Lara Hodes commented that declining productivity, grades and escalating costs continue to weigh heavily on SA’s gold mining sector. The Minerals Council SA recently said “three-quarters of SA’s gold mines are unprofitable or barely making money”.
 
"Although many international commodity prices have slipped of late, amid a background of rising trade tensions, they remain elevated on a y/y basis," said Hodes.
 
"A combination of factors have suppressed activity in the domestic mining sector, inhibiting investment, including persistent policy uncertainty, with issues around the new, proposed mining charter still unresolved."

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