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Johannesburg – Platinum production is continuing on its path of recovery, being one of the major contributors to overall mining production for the second consecutive month.
According to production and sales data released by Statistics South Africa (Stats SA), total mining production was up 3.7% in March and 15.5% from the previous year. Platinum group metals production increased 30%, contributing 6.1 percentage points to the sector’s production.
In February, platinum made a comeback with increased production by 47.2%. This contrasts with the production slump experienced in the fourth quarter of 2016. Platinum was the main negative contributor to mining production in December, with production levels down 15.1%. It similarly was the biggest negative contributor for the months October (-12%) and November (-10.8%).
Other major contributors include iron ore which was up 24.4% and diamonds (53.8%).
READ: Coal drags but mining production still on the up
Coal was also one of the major contributors, up 8.1%. The mineral made a turnaround in March after being a major negative contributor in January, down -5.5% and in February (-9.4%).
Gold production declined 8.8%. The metal was the biggest negative contributor to mining production, taking off 1.2 percentage points. In February gold was also one of the major negative contributors, with production down 16.8%.
Sales results for February 2017 show an increase by 10% from the previous year. The largest contributors included iron ore which was up more than three quarters at 76.2%, manganese ore (151.5%), coal (16.7%) and chromium ore (98.4%).
US and Chinese demand driving growth
FNB economist Jason Muscat explained that the uptick in mining data was driven by growing demand from China and expected infrastructure investment in the US. “Commodity prices have, for the most part, been trading in anticipation of growing US demand but may ultimately begin to soften unless evidence of traction emerges,” he explained.
FNB expects mining GDP to grow by 15% for the quarter. This would contribute 1.4% to total GDP. “[This] should be a strong enough performance to help the economy avert a recession,” said Muscat.
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