South African mining output showed a 3.5% reduction in May as compared to the preceding month. This is according to Statistics South Africa (Stats SA) who reported on Tuesday 13th July 2021. Despite this disheartening statistic, the sector remains one of the agile sectors in an economy that is at the verge of burning up especially presently due to the civil unrest being experienced.
On a year-on-year basis, the production curve increased by 21.9%. That however, was off a lowly base because in May of last year, the sector was in the process of a step-by-step renewal. That was a decrease of almost 30% in May 2020 compared with May 2019, according to Stats SA’s historical data.
FNB economist Thanda Sithole said in a commentary on the data that between January to May 2021, mining production is up by 20.6% compared with the corresponding period in 2020, and 1.6% compared with the corresponding period in 2019.
“Mining activity should be supported by the sustained higher commodity prices from last year and the ongoing global economic recovery, mainly from South Africa’s major trading partners. Nevertheless, economic disruptions related to the pandemic, social unrest and load shedding could limit the upside of the anticipated cyclical economic growth rebound,” Sithole said.
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Mineral sales jumped by 88.2% in the year to May, with platinum group metals leading by 258.2%. This trend reflected the increase in prices on speculations concerning the global economic recovery.
The current wave of looting in the wake of the jailing of former president Jacob Zuma, however, is likely to injure the sector this month. Despite a few mining firms shutting down, mining output has not been affected so far; but if fuel and other supplies are touched, the sector’s productive capacity will definitely be hurt.
Rio Tinto closed operations at its Richards Bay Minerals operation because of ongoing civil unrest.
