Mining production expands 3.4% y/y

(iStock)
(iStock)

Cape Town - September mining production expanded 3.4% year- on-year (y/y), seasonally adjusted and by 0.9% month-on-month.

Gold registered its second consecutive poor month, contracting -7%y/y, as did chrome (-5.2%), manganese (-11.6%) and nickel (-15.5%).

Nevertheless, strong showings from iron-ore (11.6%), PGM (10.5%), coal (6.8%) and diamond miners (14.8%) more than offset the slump and pushed the quarter on quarter average for the third quarter of 2016 to 1.5%.

This was not enough to compensate for year-on-year weakness in the first two months of the quarter though, and we expect mining Growth Domestic Production to contract by -0.4% y/y in the third quarter.

Commodity prices which are inching higher should be more supportive of sector growth in the fourth quarter, as will wage resolutions which prevented strike activity in the gold and platinum sectors.

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