SA gold output soars

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LonminMine

Independent Newspapers.

Picture: Boxer Ngwenya.

Johannesburg - South Africa's gold output soared almost 75 percent in October compared with the same month last year, underscoring the impact on production of a wave of crippling wildcat strikes that hit the industry late in 2012.

Bullion production rose 74.4 percent on a year-on-year basis in October, Statistics South Africa said on Tuesday, driving total mining output 22 percent higher.

Platinum group output in the world's top producer of the precious metals was over 16 percent higher.

However, the data was not seen doing too much for the wider economy including a worrying current account deficit, now around 6.8 percent of gross domestic product and putting pressure on the rand, which hit 4-1/2 year lows against the dollar last week.

“The only reason it looks good is because production was so bad last year because of the strikes,” said Christie Viljoen, an economist with NKC Independent Economists.

“It won't improve the current account situation much because it's just one month. Maybe cautious optimism is in order for mining growth in the fourth quarter but we need the next two months to see what that entails,” he said.

South Africa's current account deficit widened in the third quarter to its biggest in five years, data showed earlier this month, despite positive revisions to trade numbers, increasing the economy's vulnerability to external shocks.

The country's mining sector has this year mostly managed to avoid the often violent strikes that rocked it in 2012, killing dozens of people and triggering credit downgrades for Africa's largest economy.

But the world's top three platinum producers, Anglo American Platinum (Amplats), Impala Platinum and Lonmin are all locked in tough wage talks with the hardline Association of Mineworkers and Construction Union, which could call a strike against the three companies in the New Year.

Last year's strikes hit all three hard and pushed Amplats into the red. They also hammered the margins of gold companies such as AngloGold Ashanti, Africa's top producer. - Reuters


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