Mining woes add to wider trade deficit

2012-10-25 15:05 - Sapa

Parliament - The unrest in the mining sector has contributed to a decline in exports and a widening trade balance, Finance Minister Pravin Gordhan said on Thursday.

Export volumes fell by 6.3% in the second quarter, while imports grew by 20% in the same period, he said in his Medium-Term Budget Policy Statement, tabled in Parliament.

Gordhan said exports to the European Union and Japan declined, while those to the United States remained flat. On the other hand, exports to China, India and the Southern African Development Community improved.

"Disruptions to platinum output affected trade with Germany, Japan and the US, while China's higher demand for coal offset lower steel imports. There was a notable decline in export of motor vehicles to Germany."

Exports to the SADC bloc, currently South Africa's second-biggest export market, had increased rapidly in recent years, due to purchases of steel, chemical products and mining equipment.

Gordhan forecast that SADC could "soon" become the country's biggest market for manufactured goods.

He said export growth was expected to improve over the medium term as mining production stabilised, and trade with emerging African economies became a larger share of total exports.

The Treasury chief confirmed that the weaker rand, also in part due to the protracted spate of wildcat strikes at mines, had failed to boost manufacturing export growth.

According to Treasury estimates, the total value of production lost to platinum and gold mine strikes came to R10.1bn so far.

Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.