By Thanda Sithole
Mining production, not seasonally adjusted, unexpectedly contracted by 1.4% y/y in July, following a 3.6% y/y decline in June. This outturn fell short of the Reuters consensus of a 1.3% increase. Seasonally adjusted mining output also fell by 0.9% m/m, compared to a 1.7% decline in June, signalling sustained weakness into 3Q24. Year-to-date (January to July), mining output is up marginally by 0.2%, compared to a 1.7% decline over the same period last year. Excluding gold, output has risen by 1.4% so far this year.
Outlook
Despite easing energy constraints and a stable global growth environment, recovery in mining activity is expected to remain moderate in the near term. The ongoing inefficiencies in the port and rail industries continue to hinder productivity and profitability.
Selected sector analysis
The sustained weakness into 3Q24 reflected declines in seven out of twelve mining divisions. Zoning into the five major divisions, which account for over 85% of total output:
On the positive side, manganese ore output surged by 27.0% y/y, following a 5.2% increase in June, while coal production increased by 0.3% after a 3.6% decline in the previous month, mitigating the broader decline in output.