According to MininWeekly, South Africa’s mining production surged 116.5% in April following a 22.5% year-on-year increase in March.
　　Platinum group metals (PGM) contributed the most to growth, with a year-on-year increase of 276%; followed by gold, with an increase of 177%; manganese ore, with an increase of 208%; and iron ore, with an increase of 149%.
　　 The First National Bank of South Africa (FNB), a financial service provider, believes that the surge in April is not unexpected, mainly because the second quarter of 2020 resulted in a lower base due to the blockade. Therefore, there may also be a double-digit year-on-year increase in May.
　　 Despite the strong growth in April, according to the official GDP calculation method, the quarter-on-quarter increase in April was only 0.3%, while the average monthly increase from January to March was 3.2%.
　　 The strong growth in the first quarter was reflected in the industry’s real GDP. The annualized quarter-on-quarter growth rate was 18.1%, which contributed 1.2 percentage points to the real GDP growth rate.
　　 Continuous monthly growth in mining production is critical to GDP growth in the second quarter, FNB said.
　　 The bank remains optimistic about the short-term prospects of mining. Mining activities are still expected to be supported by rising mineral prices and strong economic growth in South Africa’s main trading partners.
　　Nedbank agrees that there is no point in conducting a regular year-on-year analysis, but instead focuses on discussing seasonally adjusted monthly changes and the previous year’s figures.
　　 The 0.3% month-on-month growth in April was mainly driven by PGM, which increased by 6.8%; manganese increased by 5.9% and coal increased by 4.6%.
　　 However, the output of copper, chromium and gold decreased by 49.6%, 10.9% and 9.6% respectively from the previous reporting period.
　　 Three-year average data shows that the total production level in April rose by 4.9%.
　　Nedley Bank said that mineral sales in April showed an upward trend, with an increase of 3.2% from the previous month after 17.2% in March. Sales also benefited from growing global demand, strong commodity prices and improved operations at major ports.
　　 From a three-year average, sales unexpectedly increased by 100.8%, mainly driven by platinum group metals and iron ore, and their sales increased by 334% and 135%, respectively. In contrast, sales of chromite and manganese ore declined.
　　Nedley Bank stated that despite the low statistical base, the mining industry performed well in April, driven by the growth of global demand.
　　 Looking forward to the future, the development of the mining industry is facing unfavorable factors.
　　 From an international perspective, improvements in industrial activities and rising commodity prices support the mining industry; but from a domestic perspective, the downside risks brought about by electricity restrictions and uncertain legislative systems are imminent.
　　 In addition, the bank reminded that the worsening of the Covid-19 epidemic and the restrictions on the economy brought about by it are still a threat to the pace of recovery. (Mineral Material Network)