South Africa's gold output continues to fall, dropping a further 2.9% in May, according to data from Statistics South Africa released yesterday.
The decline in gold production comes despite a 0.8% rise in total mining output in the same month, which injected some good news into the depressed local mining market. In fact, this is the first increase since June last year and it breaks a 10-month losing streak for South Africa’s mining industry.
Copper and diamonds didn’t do any better than gold. Production of the red metal decreased 14.4% and diamond output declined by 9.9%. Another falling star was manganese ore with a 16% drop.
Actual mining production in the three months up to May was down by 5.9% compared with the same period last year.
The last time South Africa's mines produced this little the country was still ruled by the Queen of England.
MiningWeekly quotes Nedbank saying that, the performance of mining production in the months ahead will continue to be undermined by weakening global growth prospects and difficult domestic operating conditions in the mining sector.
Despite the gloomy outlook for the country’s mining sector, analysts quoted by Business Day said the long-term picture might not be quite so adverse, leading to potential buying opportunities at current cheaper prices.