The last time South Africa’s mines produced this little the country was still ruled by the Queen of England
A report from Statistics South Africa paints a bleak picture of the mining industry’s productivity.
In its February production and sales report, Statistics South Africa said total mining output retreated 14.5% from a year earlier, the greatest rate of decline since March 2008 when the world was gripped by the financial crisis.
More dramatically the overall output and sales from the resources industry in the African nation is now the lowest since 1961, according to a graph from Mike Schussler—that was the year South Africa left the British Commonwealth and declared itself a republic; the start of a long period of isolation that only ended with the election of Nelson Mandela as president in 1994.
Platinum mines were worst hit, producing 48% less due to a three-month strike at Impala Platinum’s Rustenburg mine- the world’s largest platinum mine- along with safety-related shaft closures. Gold production slumped 11.5% compared to the same period a year ago. Copper and diamonds were off a respective 15.1% and 8.8%. Nickel production fell 33.6%.
Bloomberg quoted an analyst at BMO Capital Markets saying that the significant decline in platinum in South Africa, which produces 75% of the metal used in autocatalysts and jewellery, could support PGM prices in the short term.
On the bright side, iron ore, chromium and manganese all showed production increases in February, with manganese the largest at 29.3%.
Mineweb quotes Nedbank’s economic unit saying that the mining sector is likely to remain weak over the next few months and may come in negative for the quarter in South Africa’s GDP figures:
“Mining production will remain under pressure in the short term. Weaker global growth prospects will be a drag on activity. China’s import growth weakened sharply in the first quarter, reflecting a slowdown in commodity imports and this trend will impact domestic mining activity negatively. In addition, domestic constraints, related to both infrastructure and the regulatory environment, will also continue to hurt the sector.”