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Saturday, April 11, 2009

SA's February mining output down 12,8%, gold production up

Friday, 10 April 2009

South Africa's total mining production fell by 12,8% in February, when compared with a year earlier, official data showed on Thursday. Statistics South Africa (Stats SA), which released the mining production statistics, said that the lower output could largely be attributed to negative contributions from diamonds, which fell by 6,7%, coal which dropped by 4%, and chromium, which dropped by 1,1%.
On a seasonal adjustment basis, the total mining output for the three months ended February 2009, fell by 11,9%, compared with the previous three months.
Johannesburg-based fund manager Vestact director Sasha Naryshkine noted that investors had to bear in mind that January and February were traditionally the worst months in the production cycle. “Although, on a seasonally adjusted basis, we are still lagging behind, but I think that is to be expected.”
While total output dropped 12,8% in February, figures from Stats SA showed that gold production had increased 2,7% year-on-year. Between January and February, gold output increased by 0,4%.
Naryshkine stated that gold companies were likely sweating their assets to increase production, on the back of a higher gold price and the weaker rand during that month.
However, he noted that South Africa should no longer be solely focused on gold production. “We should align more focus with platinum production. South Africa has this historical linkage to gold, but it is platinum we should be focusing on.”
Stats SA said that the total seasonally adjusted value of mineral sales, at current prices, for the three months ended January 2009, reflected a decrease of 20%, compared with the previous three months.
This decrease of an estimated R15,92-billion, could be largely attributed to a decrease of 23% in nongold mineral sales.
The actual estimated total value of mineral sales, at current prices, for the three months ended January 2009 increased by 2,5% compared with the three months ended January 2008.
The most significant contributors to this increase were coal, with 10,4% or R6,22-billion, iron-ore at 4,9%, or R2,95-billion, gold at 3,3% or R1,99-billion, and manganese ore at 2,6% or R1,56-billion.
Naryshkine noted that there has been a recent upswing in commodity prices, which could likely be attributed to green shoots appearing as the credit freeze was coming to an end.
“I think that the most pleasing thing for me, is that you are starting to see a pick-up in commodity prices, and you will probably see that March will be much better than the previous two months, just on price.”
Source: Mining Weekly