According to MiningWeekly, South Africa's mining output in 2024 is expected to grow by 0.4% compared to 2023, exceeding the 0.1% increase in 2023, while it declined by 7.8% in 2022.
In December, it decreased by 2.4%, with platinum group metals and gold being the largest drags. Platinum group metals fell 7.1% YoY, dragging down 2.7 percentage points; gold dropped 8.4%, dragging down 1.1 percentage points.
Manganese ore grew by 8.7%, contributing 0.5 percentage points; coal increased by 2.5%, also contributing 0.5 percentage points. Manganese and coal were the largest contributors.
Seasonally adjusted mining output in December fell by 3.9% MoM. It remained flat in November and declined by 2.8% in October.
The Minerals Council South Africa (MCSA) stated that on a MoM basis, 8 out of 12 major minerals showed growth, but the output of platinum group metals, chromite, nickel, and iron ore "declined significantly."
"Iron ore saw the largest decline, with output down 16% MoM. After Transnet closed for annual maintenance in October, the Ore Export Channel (OEC) between Sishen in the Northern Cape and Saldanha Bay reopened, but multiple derailments occurred," it said.
"As a result, to maintain stable production, iron ore producers had to rely on selling finished product inventories from mines to meet demand. This led to a decline in iron ore production," MCSA stated.
MCSA noted that while annual production improved compared to 2023, there is still a long way to go to recover from the 7.8% decline in 2022.
"In fact, actual mining production in December was 9% lower than pre-COVID-19 levels in 2019. This highlights the severe domestic and international operating challenges faced by the mining sector, including the continued decline in platinum group metal prices," MCSA said.
MCSA Chief Economist Hugo Pienaar believes that whether the mining sector can recover strongly this year will depend on the stability of electricity and rail-port logistics infrastructure, as well as water supply and local government management levels.
"It is very challenging to address these issues in the short term. Nevertheless, we remain confident that with the introduction of new-generation power units by Eskom, power supply cuts to the mining sector will not occur," he said.
"Although progress is slow, we expect further improvements in freight rail performance. Transnet's rail freight volume is projected to increase from 160-165 million mt in the 2024/25 fiscal year to over 170 million mt," he added.
He also noted that the South African mining industry is looking forward to the launch of a new mining rights system in H2 this year.
"While this will not impact mining production in 2025, it will lay a better foundation for mining production in the years to come."
Pienaar stated that in the foreseeable future, water supply constraints and local government management levels will remain limiting factors for the development of the mining sector.
"Although some domestic obstacles are about to be resolved, Trump's tariff war has further complicated international factors that could affect the domestic mining sector."
"Apart from gold prices continuing to benefit from rising uncertainty, if Trump's policies suppress global trade/world GDP growth and hinder the easing of global inflation, industrial metal prices will also be impacted," he noted.
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