Statistics South Africa has just released its latest figures on the country’s metals and mineral output and they don’t make for happy reading with gold and platinum still on the decline.
LONDON (MINEWEB) – For South Africa, the latest figures from the country’s government statistical department, make fairly dismal reading, particularly with respect to its once word-dominant gold mining sector. The June figures, released yesterday, showed .that gold production continues to fall year on year – it was down 14% on that for June 2012 – and is now only the country’s fourth most important mined metal by value, having been overtaken by iron ore. Coal remains the most important metal or mineral by sales value, with platinum second, but the latter too is showing a year on year production decline.
According to the report the country’s overall mining production decreased by 6.2% year-on-year in June 2013. The largest negative growth rates were recorded by ‘other’ metallic minerals (-38.0%), diamonds (-22.9%), PGMs (-18.9%) and gold (-14.1%). The main contributors though to the overall 6.2% decrease were platinum group metals (contributing -4.6 percentage points) and gold (contributing -2.3 percentage points). Iron ore (contributing +2.0 percentage points) was the most significant positive contributor.
In value terms, the latest figures released are from May when overall mineral sales decreased by 8.5% year-on-year. The largest negative growth rates were recorded for gold (-42.6%), nickel (-20.0%) and ‘other’ metallic minerals (-15.5%). The major contributor to the 8.5% overall decrease was gold (contributing -10.0 percentage points).
For a resource economy like South Africa where metals and minerals account for a high proportion of GDP and export earnings, the decline in both volume and value has to be very disturbing – particularly as in the key PGM and gold sectors there looks to be no end in sight to the production falls while metal prices remain at current levels.
The PGM and gold mines in particular are facing ever-increasing labour relations problems with workers calling for very large wage increases, stimulated by inter-union rivalries – with disputes tending to turn violent when demands are not met. And all this is at a time when the mines are struggling economically as low metal prices put a high proportion of the gold and platinum mining operations into the lossmaking and marginal categories. If gold trends lower still, as some analysts predict, platinum will likely follow suit, and this would place the whole precious metals mining sector in the country in jeopardy. The miners can only afford to carry losses for a short time without some massive closedowns –
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