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Thanda Sithole | Mining production and sales November 2024 data analysis

Thanda Sithole | Mining production and sales November 2024 data analysis
21-01-25 / Thanda Sithole

Thanda Sithole | Mining production and sales November 2024 data analysis

Mining production (not seasonally adjusted) contracted by 0.9% y/y in November 2024, after expanding by a downwardly revised 1.1% (previously 1.4%) in October (Figure 1). Excluding gold, mining output expanded by 0.7% y/y over the same period. Monthly seasonally adjusted output, which is critical for quarterly GDP calculations, declined by 0.2% after contracting by 2.8% (previously -3.0%) in October (Figure 2). In the three months to November, mining output was up by 4.0% - suggesting a potential boost to 4Q24 GDP growth, pending the December data print.  

Outlook

Mining output increased by close to 1% between January and November last year, reflecting a better performance compared to 0% growth in 2023. However, last year’s performance has been mixed, with mining divisions such as platinum group metals (PGMs), chromium ore, coal and manganese ore supporting growth (Figure 4). Meanwhile, gold, other metallic minerals and iron ore have been a drag.

We expect the continued suspension of load-shedding and gradually stabilising logistic systems to support production over the near-to-medium term. However, slowing growth in China, a generally subdued external demand environment, and weak prices for South Africa’s major commodity exports could limit the upside.   

Selected sector analysis

The weakness in November’s mining output was broad-based with nine out of 12 divisions experiencing declines (Figure 3). Amongst the major divisions:

  • Iron Ore output declined by 3.8% y/y, shaving off 0.5 percentage points (ppts), but expanded by 10.4% m/m.
  • Gold output contracted sharply by 11.5% y/y (and by 9.2% m/m), shaving off 1.5ppts and marking the 13th successive month of annual decline. The continued decline in gold production is partly attributed to higher operating costs due to aging and ultra-deep mines as well declining ore grades.
  • Coal output contracted by 1.6% y/y dragging total mining growth by 0.3ppts. Seasonally adjusted output increased by 2.2% m/m.
  • Manganese ore output declined slightly by 0.1% (and by 0.7% m/m, seasonally adjusted) after declining by 4.0% y/y (-8.9% m/m) in October 2024.

On the upside:

  • PGMs increased by 4.0% y/y, marking the fourth consecutive month of annual increase. Seasonally adjusted PGMs output has also maintained monthly momentum, having increased by 3.2% on average over the past four successive months. Year-to-date (January to November 2024), PGMs output is up by 2.3%, reflecting an acceleration from 1.1% growth in 2023.

*Thanda Sithole is FNB Senior Economist.

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