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Mining production down in January, but mineral sales up almost 25%

  • Monday, March 15, 2021
  • Source:ferro-alloys.com

  • Keywords:mining,sales and production
[Fellow]Mining production decreased by 6.2% year-on-year in January, with the largest negative contributors being platinum group metals (PGMs), coal and gold, according to the latest Statistics South Africa (Stats SA) report.

[ferro-alloys.com]

  Mining production decreased by 6.2% year-on-year in January, with the largest negative contributors being platinum group metals (PGMs), coal and gold, according to the latest Statistics South Africa (Stats SA) report.

  PGMs slumped by 14.5%, subtracting 3.5 percentage points from the overall average, while coal slipped by 13.5%, also subtracting 3.5 percentage points from the overall average.

  While gold output fell by 14.1%, the commodity only contributed a loss of 1.6 percentage points overall. The commodity was hurt by lower demand for its position as a safe-haven asset, notes financial services provider Nedbank.

  On the positive side, Stats SA’s data shows manganese ore being a significant positive contributor, with production up by 34.7% and contributing 2.3 percentage points on the whole.

  Nedbank notes that nickel and diamond production also grew significantly over the month.

  Compared with December 2020, seasonally adjusted mining production increased by 4.5% in January, following month-on-month changes of -1.5% in December 2020 and -3% in November 2020.

  Compared with the previous three months, seasonally adjusted mining production decreased by 3.3% in the three months ended January, the largest negative contributors being PGMs, coal and manganese ore.

  PGMs slipped by 14%, subtracting 3.1 percentage points on the whole, while coal fell by 4.5%, pulling down overall performance by 1.1 percentage points. Manganese ore slipped by 9.9%, inflicting a one percentage point loss to overall statistics.

  Meanwhile, iron-ore was a significant positive contributor, climbing 25.4% and contributing 2.1 percentage points to the whole.

  Nedbank states that mining production started the year on the back foot, which “does not bode well for the first-quarter gross domestic product”.

  However, looking ahead, the bank says the mining sector faces counter-balancing factors. On the international front, it says improving industrial activity and firmer commodity prices support higher production.

  Domestically, however, Nedbank suggests an uncertain legislative framework and unreliable power supply pose significant downside risks.

  Furthermore, new waves of Covid-19 infections and the associated restrictions on economic activity remain a threat to the pace of recovery, states the bank.

  SALES

  The Stats SA figures show mineral sales increased by an overall 24.9% year-on-year in January, with the largest positive contributors being PGMs, gold and iron-ore.

  Sales continued to benefit from increased global demand, higher commodity prices and improved operations at major ports, states Nedbank.

  PGM sales increased by 37.8%, adding 12 percentage points to the overall figure; while sales of gold rose 71.6%, contributing 10.7 percentage points. Iron-ore sales increased by 43.3%, adding 5.6 percentage points to the whole.

  In contrast, Nedbank points out that the value of coal fell for the fourth consecutive month, down 23% year-on-year in January, negatively contributing to the yearly figure. For the three months to January, mineral sales increased by 4.6% compared to 5% over the previous three months.

  Compared with December 2020, seasonally adjusted mineral sales at current prices increased by 31% in January, following month-on-month changes of -6.6% in December 2020 and -4% in November 2020.

  In the three months ended January, the seasonally adjusted value of mineral sales at current prices was 4.6% higher compared with the previous three months.

 

  • [Editor:Catherine Ren]

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