SOUTH AFRICA – Mining production fell again in December compared with a year ago, its fourth consecutive year-on-year decline, indicating the extent to which weak global demand and low commodity prices are hurting the sector.
The pace of decline is, however, slowing, suggesting that some improvement is taking place.
Mining production fell by 0.3% year on year in December after declining by 1.3% year on year in November, 4.7% year on year in October and 4.9% year on year in September.
Not only does the sector face lower commodity prices and muted demand, it also has to contend with rising input costs.
Mining production growth was expected to be subdued during the year due to poor global conditions and lower commodity prices, while weak local demand and infrastructure constraints would also hurt output growth, Nedbank economists said in a research note.
The three largest negative contributors to the 0.3% decrease were iron ore, gold and manganese ore, whose production fell.
The declines in the production of these minerals sharply offset an increase in the production of platinum group metals (PGMs).
Total mining production was 3.3% higher in 2015 compared with 2014. The 3.3% increase in annual mining production followed a decrease of 1.4% in 2014 and an increase of 3.6% in 2013.
Seasonally adjusted mining production increased by 1.5% in December compared with November following month-on-month increases of 2.1% in November and 1.5% in October.
Seasonally adjusted mining production increased by 0.3% in the fourth quarter of last year compared with the previous quarter.
Mineral sales fell by 3.6% year on year in November 2015. The largest negative contributors were iron ore, other nonmetallic minerals and manganese ore sales.