South Africa mining sector outlook worsens
Business Live reports the outlook for the South African mining sector has worsened in recent weeks, economists from Nedbank said on Thursday.
According to Statistics SA, growth in mining production slowed to 9.6% year on year (y/y) in May from 12.0% y/y in April. Gold output fell by 5.8 % y/y and was down by a seasonally adjusted 3.6% month on month (m/m), while non-gold output was dragged down by declines in platinum group metals, which declined 9.9% m/m, and coal, which was 6.3% lower m/m.
“The threat of labour strikes, with labour unions having declared disputes with some mining houses, does not bode well for activity in the coming months,” they said, adding that some moderation in mining output could be experienced during the second half of the year, due to a high base established in 2010 and some loss in growth momentum internationally.
“Although commodity prices remain supportive, there are indications of a slowdown in global demand. The strength of the rand, which hampers export competitiveness, as well as transport and energy capacity are also hurting the sector,” Isaac Matshego and Dennis Dykes, from the group’s economic unit, said in a note on the latest mining production data released by Statistics SA.