Gold pour
SA September mining output tumbles
Sapa | Thu, 12 Nov 2009 17:16[miningmx.com] -- SOUTH African mining production declined in September, Statistics SA said on Thursday. Total mining production fell by 15.9 percent year-on-year in September against a drop of 8.4 percent year-on-year in August. The Pretoria-based agency said the major contributor to the decline was production of platinum group metals (PGM), which fell by 20 percent on the month. PGM production during the third quarter was hit by strike action as well as shaft closures following mine accidents. Statistics SA said the value of minerals sales declined by 30.2 percent year-on-year in August against a drop of 31.3 percent year-on-year in July. This was due to lower sales value of PGMs and gold. Despite the rise in the dollar price of commodities, rand strength since the beginning of the year has lowered the rand price of commodities. Investec economist Kgotso Radira said that as the global economy slowly moved out of recession, global demand and prices should start to recover, which bade well for South Africas mining sector. "If rand strength is sustained, then the recovery might be slower than expected. "Furthermore, Eskoms proposed electricity tariff increases will result in higher production costs for mining companies which could affect production," he said. Radira added that the outlook remained uncertain and largely dependent on the pace and trend of the global economic recovery. "The destocking process is at, or approaching, an end which will result in demand for commodities starting to pick up. "An improvement in household financial positions and confidence will be key for the recovery in demand for gold and platinum." He said he only expected a recovery in the sector in the latter part of the first half of 2010.
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