Chamber of Mines of South Africa chief economist Henk Langenhoven
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Mining production data released by Statistics South Africa on Thursday revealed a second consecutive month of production contraction.
The -0.2% contraction and the -1.4% contraction in April are viewed as concerning by Chamber of Mines of South Africa chief economist Henk Langenhoven, owing to their erosion of the 5% production improvement of the first five months of this year.
Production is now stuck at 2016 levels, which were 5% down on 2015, with the decline largely attributable to a combination of commodity price uncertainty and a nigh-17% stronger rand.
The local currency has strengthened 5%-plus since January.
Although the average prices of the four important export commodities were higher in the six months compared with a year ago, January 2017 seemed to indicate a turning point, with production starting to falter shortly thereafter.
The rand commodity price index has fallen 12% in the last six months, when the rand landed-price for coal and iron-ore fell by 13.5% and 32% respectively.
The gold price remained steady and the platinum price fell 9%, commodities that constitute 86% of exported minerals, the chamber said in a release to Creamer Media’s Mining Weekly Online.