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Mining production levels dropped 4.2% year-on-year in June 2019, with the largest negative contributors to the decline being gold, diamonds and platinum group metals.
According to data from Stats SA, gold production dropped by 16% year-on-year, diamond production dropped 33.2% year-on-year and platinum group metals dropped 6.3% year-on-year. These mineral groups combined account for 43.6% weighting in the mining index, Investec Economist Lara Hodes said.
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Seasonally adjusted mining production increased by 3.3% in June 2019 compared with May 2019. “This followed month-on-month changes of 3.1% in May 2019 and -1.7% in April 2019,” the Stats SA report read.
On a quarterly basis, the mining sector rose by 14.6% in the second quarter, Hodes noted.
“This implies that the mining and quarrying sector will make a positive contribution to the quarter’s GDP outcome,” she said. The sector had improved from the first quarter’s “dismal performance”, she added.
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As for mineral sales, they increased 6.5% year-on-year in June. The largest contributors to this was iron ore sales (up 76.6%), platinum group metals sales (up 9.9%) and other metallic minerals sales (up 70.7%).
“Overall, the domestic mining sector continues to be plagued by a myriad of regulatory and operational challenges,” Hodes said.
Citing a previous statement by Minerals Council SA, Hodes said that the “focus on improving competitiveness, productivity growth, ensuring predictable and competitive policies and regulations, modernising the sector and most of all working collaboratively to grow and transform the sector” is essential.