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Global demand helps boost mining production

08 December 2017 4:00 AM
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Johannesburg - Mining production was up 5.2% for October, supported by global demand and higher commodity prices, according to analysts.

The mining data which was released by Statistics South Africa (StatsSA) on Thursday, shows mining production improved from the 0.3% contraction in September. This was helped by increases in iron ore and coal, while production of diamonds, gold and nickel contracted.

Iron ore was up 17.9% and contributed 4.2 percentage points to overall production growth. Coal production was up 6% and contributed 1.5 percentage points to overall production.

Mineral sales increased 7% in September, with the main positive contributors being manganese ore, up 176.2%. The contribution of manganese ore to sales growth was 5.1 percentage points. Gold sales were down 17.5% and sales for platinum group metals were down 10.1%, both were significant negative contributors, according to StatsSA.

In the first 10 months of the year mining production rose by 4% compared to a decline of 4.1% in the same period last year, said Investec economist Kamilla Kaplan.

“Growth in the mining sector has been aided by higher commodity prices, relative to decade lows reached in early 2016.

“The rise in commodity prices is linked to stronger industrial demand, mine supply constraints and to an extent, heightened geopolitical risks.”

Source: fin24.com

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