Mining production decreased by 3.3% year-on-year in August, Statistics South Africa reported on Tuesday.
The largest negative contributors were gold (-14.8%), iron-ore (-18.1%) and coal (-4.0%), while the largest positive contributor was platinum group metals, or PGMs (12.7%).
Seasonally adjusted mining production increased by 6.8% in August, compared with July. This followed month-on-month changes of 20.3% in July and -0.7% in June.
Mineral sales increased by 20.9% year-on-year in August, with the largest positive contributors being PGMs (63%), iron-ore (39.3%), gold (7.6%) and ‘other’ non-metallic minerals (35.6%).
Seasonally adjusted mineral sales at current prices increased by 13.1% in August compared with July. This followed month-on-month changes of 27.0% in July and -4.6% in June.
In the three months ended August, the seasonally adjusted value of mineral sales at current prices was 16.2% higher compared with the previous three months.
Commenting on the statistics, Nedbank Economic Group Unit noted that the decline in mining production had been gradually slowing since April when output was down by 50.2% year-on-year.
Nedbank mentioned that eight of the 12 mineral categories recorded yearly decreased in August.
The company highlighted that the August mining production figures were based on new weights based on national accounts value added statistics for the years 2016 to 2018 (previously weights were based on national accounts value added data for 2015 to 2017). The change in weights is applied with effect from January 2018.
Based on the new weights mining production declined by 1.5%, 0.6% and 14.9% in 2018, 2019 and year to date 2020, which compares with falls of 1.9%, 0.9% and 15.1% respectively, if the old weights were used.
“Our forecast is for mining to remain weak for the remainder of the year, but to be at vastly better levels than at the height of the lockdown. The speed of this recovery will depend on how quickly the country moves towards some semblance of normal operations, which, depending on the source, could be as soon as later this year or sometime in 2021.
“Either way, mining production will probably end 2020 lower, hurt by much weaker global demand and commodity prices,” Nedbank posited.