Johannesburg - The decline in South African platinum production overtook that of gold in July, with Statistics South Africa reporting that platinum group metals (PGM) production dived 32.8% during the month.

PGM producers attributed the large decrease in actual production mainly to deferred maintenance, which would normally have occurred in the first half of the year.

Actual total mining production for July 2008 decreased by 12.6% compared with July 2007, with gold production and non-gold minerals decreasing by 16.4% and 12.0% respectively.

The decline in production was less severe over the three months to end July 2008, decreasing by 6.6% compared with the three months ended July 2007.

By comparison, total mining production for the three months after seasonal adjustment increased by 1.3% compared with the previous three months.

Statistics South Africa said this was mainly driven by an increase of 2.2% in the production of gold, followed by an increase of 1.2% in the production of non-gold minerals.

The division that made the highest contribution to the seasonally adjusted increase was diamonds, which contributed 1.2 percentage points, followed by iron ore contributing 0.6 of a percentage point.

Strong demand

In the face of strong demand, coal was the only significant negative contributor (-0.9 of a percentage point) to the mining production for the three months ended July 2008.

But despite production declines reported over the last six months, higher commodity prices have helped lift mineral sales.

The total seasonally adjusted value of mineral sales at current prices for the second quarter of 2008 reflected an increase of 17.0% compared with the first quarter of 2008.

This increase of R11.7bn was attributed to increases of 18.0% or R10.5bn in the sale of non-gold minerals and 11.2% or R1.2bn in the sale of gold.

Actual estimated total value of mineral sales at current prices for the second quarter of 2008 increased by 44.6% compared with the second quarter of 2007.

The major contributors to this year-on-year increase was PGMs (13.0 percentage points or R7.3bn), coal (12.7 percentage points or R7.2bn), manganese ore (9.1 percentage points or R5.0bn and and iron ore (3.9 percentage points or R2.2bn).

- I-Net Bridge