SA's mining output plunges in May despite easing of restrictions

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Two workers in an underground mine.
Two workers in an underground mine.
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South Africa's mining production declined 29.8% year-on-year in May, as the government eased Covid-19 regulations to allow for a phased return to production for the industry.

The decline comes on the back of a 47% slump in April when the country was under a stricter lockdown, which saw most mines placed under care and maintenance.

According to data released by Statistics South Africa on Tuesday, the largest contributors to the dip seen in May were iron ore, which shrank by -66.3%, followed by platinum group metals, which fell by -27.3%.

Manganese ore production decline by -45.4%, with the national statistical agency stating that the Covid-19 pandemic and the resultant lockdown regulations had had an "extensive impact on economic activity.".

"Seasonally adjusted mining production decreased by 31.3% in the three months ended May 2020 compared with the previous three months," said StatsSA. 

May saw the easing of the lockdown regulations from alert level 5 to level 4, which allowed underground operations to ramp-up production to 50% and open cast mines to shift to full capacity.

FNB believes that sub-optimal operating conditions may have prevented a more meaningful pickup in output, while a report by Nedbank forecast that production was still expected to record a sharp decline on a year-on-year basis.

Mineral sales, meanwhile, were down 13.4% year-on-year in May 2020, with most commodities adding negative growth. Coal was affected by a decline in demand from Eskom as energy consumption weakened during the early stages of the lockdown, while key export markets implemented lockdown regulations.

In the three months ended May 2020, the seasonally adjusted value of mineral sales at current prices was 18,2% lower compared with the previous three months.

Despite the further easing of regulations, a number of mining housing have indicated that they are yet to return to full production, in light of health and safety protocols aimed at preventing the spread of Covid-19 in mines. But mine workers have not been spared, with the current death toll from Covid-19 infections at 35 as at July 13, according to latest data by the Minerals Council.

A total of 4 495  employees have tested positive for the virus out of 26 380 tests conducted so far.

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