JOHANNESBURG (miningweekly.com) – Data released on Monday by Statistics South Africa (Stats SA) statistician-general Pali Lehohla has revealed that output from South Africa’s mining and quarrying industry had contracted by 24.7% in the first quarter of 2014, as the sector battled subdued commodity prices, low productivity and a prolonged standoff with labour.

Reviewing figures from prior to the onset of the economic recession in 2009 to March 2014, Stat SA reported, unsurprisingly, that mining production saw its first significant dip in early 2009, when the sector’s production index fell to around 92.

The index used a base figure of 100 index points – last seen in 2010.

This was followed by a more dramatic output slump in late 2012, when strikes in the domestic iron-ore and gold sectors pushed production volumes down to just below 85 on the index.

The volume of gold mining production saw a general decline between 2008 and 2014, dropping to its lowest ebb of some 50 index points in October 2012, as wildcat strikes battered the sector.

The gold industry settled at 80 index points by March 2014.

In contrast, iron-ore volumes showed a general production increase between 2008 and 2014, remaining more resilient through labour contests and increasing from around 70 index points in January 2008 to above 140 index points in March 2014.

Interestingly, Lehohla revealed that production from the platinum-group metals (PGM) sector, which had been hardest hit by recent labour tensions, had remained largely flat between January 2008 and January 2014, despite being characterised by both periods of high productivity and periods of depressed output.

“Rather than declining rapidly, as was the case in the gold and iron-ore industries, output from the PGM sector remained largely flat between 2008 and 2014, dipping suddenly in February 2014,” he commented.

PGM production in March, however, fell to a subdued 52 index points, from 95 in January 2008.

Employment levels in the mining and quarrying sector retreated between June 2012 and March 2014, with the industry shedding 48 000 workers, or 9% of its total workforce.

While reluctant to make any firm predictions for the coming quarter, Stats SA deputy director-general of economic statistics Joe de Beer said the 0.6% dip in South Africa’s gross domestic product (GDP) in the first quarter did not necessarily point to a coming recession.

“The effect of the first-quarter contraction has yet to be determined, but we will be surprised if there isn’t an improvement in the mining sector after the recent resolution of the mining strike.

“However, it won’t be an overnight recovery, as the end of the strike is not an on/off switch. We must be conscious of the lag effects,” he commented.

Stats SA would release a report on South Africa’s GDP, which would reveal whether or not the country was entering a recession, on August 26.