SA mining production for September surprises economists on upside, led by iron ore

Iron ore pellets

SOUTH African mining production grew 1.5% in September compared to August led by iron ore production which was 8.2% higher, said Statistics SA data. Mining production was 0.2% higher year-on-year.

Citing economists polled by Bloomberg News, BusinessLive said production had been expected contract 2.4% year-on-year in September. Mining accounts for about 8% of GDP.

Diamond production fell 15.7% in August reflecting the poor state of that market. De Beers, the Anglo American-owned company, cut 2019 production guidance to 31 million carats, the lower end of its 33 to 31 million carat guidance for the year. This was a consequence of poor demand for rough diamonds and a retraction in diamond pricing.

Mineral sales rose 15% year-on-year, with gold sales rising 94.9%, or 8.7 percentage points of the headline figure. Platinum group metal sales rose 22.4%, contributing 5.5 percentage points.

Economists had expected the mining industry to be under pressure, due to an uncertain global trade outlook, as well as rising operational costs locally. Uncertain electricity supply has also been cited as a headwind for the sector.