There was a drop in mining production for the September quarter in South Africa according to the latest data from Statistics South Africa (Stats SA). Principal survey statistician Juan-Pierre Terblanche said that after reporting positive results in the first two quarters of 2021, South African mining production pulled back in the third quarter, decreasing by 0.6% on a seasonally adjusted basis.
This comes after the sector experienced decreases in platinum group metals production and coal, down 3.6% and 3.5% respectively, each contributing -0.8 of a percentage point.
In September 2021, production was down 3.4% year-on-year. Mineral sales at current prices however, were up 1.1% year-on-year in September. In the coming months, further pressure on production is highly anticipated.
While delivering the Medium-Term Budget Policy Statement last week, the minister for Finance, Enoch Godongwana said that economic growth was expected to decline in the second half citing fickle electricity supply and interference to rail and port operations.
According to the Minerals Council South Africa, mining is a key driver of the country’s economy and there is need for urgent structural reforms in order to encourage growth in the sector and the economy as a whole.
Read: As South Africa Plans to Get Back to ‘Normal’ – Alcohol Testing Equipment Needs to be Dusted Off
The council applauded Godongwana’s effort to come up with a competitive energy market, bring forth extra crime-fighting resources and also pioneer Transnet Freight Rail to third-party access by the end of 2022.
“The minerals council estimates that the opportunity cost of rail and port constraints to be about R30 billion so far this year, which has fed through to less-than-optimal revenues for mining companies and reduced taxes for the government,” it said.
According to the council, the country also needed to bring its “alarming” debt under control, alluding to a seven-fold increase to R4 trillion, up from R577 million in 2007/08.