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South African mining production grew by 3.3% in 2015
February 11, 2016, 12:19 pm

Despite load shedding, low commodity prices and policy uncertainty, South African mining production grew by 3.3 per cent in 2015 after a 1.4 per cent drop in 2014, according to data released by Statistics South Africa (Stats SA).

[Image: TBP]

[Image: TBP]

Stats SA noted that in December 2015 there was a mixed picture as the platinum group metals (PGM) continued their recovery from the strike-hit 2014, while other mining production saw declines in response to low prices that have hurt profits and resulted in job losses as mining companies cut costs.

Although PGM production rose by 19.0 per cent year-on-year (y/y) in December, followed by a 15.9 per cent y/y gain in nickel production and a 13.4 per cent increase in chromium production, this was offset by y/y declines in iron ore (-17.1 per cent), copper (-15.0 per cent), manganese ore (-8.7 per cent), diamonds (-8.5 per cent) and gold (-4.9 per cent).

The country has the world’s biggest reserves of platinum, third-largest of gold, is the biggest manganese producer and is Africa’s largest source of iron ore and coal.

With infrastructure critical to any mining project, delays in the government’s multi-billion rand infrastructure investment plans have cost the economy dearly as investment in steel-intensive railway corridors such as links to Swaziland and the Waterberg coalfields, remain plans, not projects.

South Africa ranks as one of the richest countries in natural resources from gold to iron ore [Image: Archives]

South Africa ranks as one of the richest countries in natural resources from gold to iron ore [Image: Archives]

South Africa’s mining sector was in “trouble” due to job losses caused by lower commodity prices and rising input costs, Minister of Economic Development Ebrahim Patel said in August 2015.

Economist Elna Moolman of Macquari Securities agreed with Patel’s assessment that the mining sector is in a very difficult space.

“This increases the urgency to implement the growth-supportive aspects of the National Development Plan. How policymakers respond to the mining crisis will be very important,” Moolman told The BRICS Post.

President Jacob Zuma on Tuesday announced that a task team between Business Unity and the National Treasury would be set up to address constraints on growth such as the lack of electricity, which caused load shedding in the first half of 2015.

This constrained both mining and manufacturing production.

Other growth-supportive measures could also be announced in the State of the Nation Address on Thursday evening.

South Africa ranks as one of the richest countries in natural resources from gold to iron ore.

 

Helmo Preuss in Pretoria, South Africa for The BRICS Post

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