Business Maverick


SA’s annual mining output falls for sixth consecutive month in July

SA’s annual mining output falls for sixth consecutive month in July
Platinum-rich rock sits inside a freight wagon in a mine shaft outside Rustenburg, South Africa. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

South African mining production fell 8.4% in the year to July, Statistics South Africa said on Tuesday. It was the sixth month on the trot that mining output fell on an annual basis, underscoring the sobering fact that the sun is fast setting on the industry in South Africa.

Gold production declined almost 20% in the 12 months to July, while output for platinum group metals (PGMs) fell 12.2%. Iron ore production was down more than 20%. It all adds up to a decline of 8.4%, considerably worse than market expectations of a 5% contraction. 

South Africa’s mining industry has long been in a state of decay and decline, and the data so far this year confirm that trajectory. 

Still, it has not all been doom and gloom. On a monthly basis, production in the sector rose 2.3% in July. And mineral sales rose 4.3% in the year to July. Coal led the way with sales soaring 84.3% – prices for the fossil fuel have sizzled this year, defying predictions that the commodity is on its way to becoming a fossilised relic of our economic past. 

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The data come in the wake of a shock deterioration in South Africa’s trade balance, which unexpectedly fell into a deficit of R87-billion in the second quarter (Q2). 

An outflow of capital stemming from a surge in dividend payments to foreign investors was one of the causes, as well as cooling commodity prices and declining mining production. You can’t export the stuff if you don’t extract it.

SA’s current account balance falls into the red, bad news for the rand

None of this is good news for the rand, which remains on the ropes near two-year lows above 17/dollar. 

“Looking ahead, power outages and ongoing logistical constraints will continue to undermine the mining industry. Moreover, regulatory uncertainty, infrastructure inefficiencies and theft sullies South Africa’s attractiveness for mining exploration investment,” Jee-A van der Linde, an economist at Oxford Economics Africa, wrote in a note about the data. 

“South Africa has not been able to boost mining production in recent years, which implies the industry is unable to fully exploit favourable price developments. 

“Between 2016 and 2021, annual mining output dropped by an average rate of 0.4% per annum.” DM/BM


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