Mining gloom feeds into grim data
The impact of the series of unprotected strikes in the mining sector is now feeding into official data.
Statistics SA said yesterday that mining production fell 7.7 percent year on year in October, after shrinking 7.2 percent in September and growing less than 2 percent in August.
Manufacturing returned to positive territory in October, with year-on-year growth of 2.5 percent, after falling 1.7 percent in September. But Citi analyst Gina Schoeman warned that the negative impact of mining strikes on the manufacturing supply chain would continue to filter through, dampening manufacturing expansion over coming months.
She identified headwinds for the sector: weak global growth, low local business confidence and the high probability of local strike action next year.
In the mining sector, the damage was widespread. Production of platinum group metals (PGMs) fell 11.2 percent for the three months from August – when the industrial unrest started at Lonmin’s Marikana mine – to October, compared with the July quarter. PGMs have the biggest weighting in the basket – 24.6 percent. Production in the gold sector, with a 17.7 percent weighting, fell by 20.3 percent.
Copper fell 53.6 percent. Marc Ground, a commodities strategist at Standard Bank, said the metal was a by-product of both platinum and gold.
Other losses in the three-month period were: chromium ore falling 15.3 percent; building materials losing 6.5 percent; diamonds dipping 4.2 percent; coal receding 4.2 percent; and manganese ore slipping 3.9 percent. – Ethel Hazelhurst