South Africa’s mining production plummeted 14.9% year-on-year in April, dragged down by Platinum Group Metals (PGMs), coal and gold.
PGMs production dropped 22.6%, coal production declines 14.7% and gold production was 27.8% lower, Statistics South Africa reported on Thursday.
In a note, Nedbank Analysts said the hefty slump in production was much worse than the Reuters' consensus view of -5% and marks the largest contraction since the start of the Covid-19 pandemic in March 2020.
Production was mainly weighed down by industrial action and load shedding over the reporting period, Nedbank said. This points to persistent rotational power cuts this year as Eskom’s plant performance continues to worsen. Sibanye-Stillwater’s gold mines have also been out of operation since 10 March when a wage strike ensued. The parties last week signed a wage deal.
In the coal sector, miners have cut back on production in response to poor railing services from Transnet which has been plagued by cable theft and inability to procure spare parts to service its locomotives.
High commodity prices have however helped to soften the blow.
Mineral sales at current prices decreased by 0.8% year-on-year in April with the largest negative contributors being PGMs – which were 24.2% lower – iron ore which was 19.9% lower. A significant positive contributor was coal sales which were 76.8% higher thanks to record high prices amid Russia’s war on Ukraine.Get the biggest business stories emailed to you every weekday.
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