South Africa's platinum production plummets 12%
Johannesburg-SA (Dec 8) Mining production fell by 2.9% in the past year, mainly owing to a drop in platinum metals production, according to Statistics South Africa (Stats SA).
The 12% drop in platinum group metals (PGMs) production was the main contributor to the 2.9% decline in overall mining production for the year ending in October 2016.
This is according to data released by Stats SA on Thursday. The fall in PGMs contributed -2.5 percentage points to overall mining production.
Other contributors to the decline was manganese ore output, which fell by 10.5%, other non-metallic minerals which fell by 14% and gold, which fell by 3.7%.
Iron ore production, however, improved 5.9% and coal production gained 4.3%, each contributing 1% to overall mining production.
Seasonally adjusted mining production increased by 0.7% in the three months ending in October 2016. Iron ore was the largest positive contributor with 2.3 percentage points. PGMs, though, were the largest negative contributor of -2.3 percentage points.
Mineral sales increased by 16.6% year-on-year in September 2016. Gold sales increased 50.8%, followed by coal and PGMs.
At a press briefing on the economic outlook for 2017 held earlier this week, chief economist at Investment Solutions Lesiba Mothata said demand for commodities may improve in the coming year. This will be driven by greater infrastructure spending by countries such as the US, Canada and Japan.
Over the next 10 years, US president-elect Donald Trump plans to spend $1trn on infrastructure. Canada's government plans to spend $92bn over the same period, and Japan will spend $276bn.
It is yet to be seen if European countries, which adopted a fiscally austere approach following the PIGS (Portugal, Italy, Greece, Spain) debt crisis in 2011, may include more infrastructure spending.
Looking at the African Growth and Opportunity Act agreement specifically, about 70% of exported products to the US are energy and mineral related products.
The main beneficiaries of this agreement are Nigeria, Angola and South Africa, mostly because of their commodities, Mothata said.
Source: fin24
