SOUTH African mining production increased in February bringing to an end 11 months of consecutive year-on-year declines, largely owing to Covid-19 related lockdowns last year.
Output at South Africa’s mines rose an annual 0.8% in February, up from a downwardly revised 8.4% decline the previous month, the publication said. The consensus among economists polled by Bloomberg News was for a 3% contraction in February, it added.
Seasonally adjusted mining production increased 3.8% in February compared with the previous month.
Iron ore output rose 65.7% in February, contributing 5.9 percentage points to the overall mining output number for the month, while manganese ore rose 21.6% and contributed 1.7 percentage points. Production of other non-metallic minerals rose 12.6% in February, contributing 0.7 of a percentage point.
Coal and gold were significant negative contributors, with output falling 19.3% and 8.7% respectively, said BusinessLive.
“The overall improvement in mining production volumes is encouraging,” said BusinessLive which cited an emailed response to questions from Nedbank’s group economics unit. “Considering base-effect in March, the sector will probably contribute positively to the first-quarter GDP,” the bank said.
Nedbank added that the South African mining sector yet faced potential headwinds owing to both local and international factors.
“On the international front, improving industrial activity and firmer commodity prices will support higher production,” Nedbank said.
“Domestically, however, an uncertain legislative framework and unreliable power supply pose significant downside risks. Furthermore, new waves of Covid-19 infections and the associated restrictions on economic activity remain a threat to the pace of recovery.”