SA mineral sales jump almost 47% on commodity bull run
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JOHANNESBURG - MINERAL sales had jumped by an astounding 46.9 percent year-on-year in March to R75 billion, Statistics SA (StatsSA) reported yesterday, boosted by the wave of record commodity prices and on expectations of an increase in global economic growth.
StatsSA said production was 21.3 percent higher, the first annual growth since last February.
StatsSA said that platinum group metal sales were the biggest contributor to the windfall after surging 76 percent and contributing 26.1 percentage points.
Gold sales jumped 61.3 percent, contributing 7.2 percentage points, and iron ore sales increased by 48.3 percent and contributed 6.9 percentage points.
StatsSA said “other” non-metallic minerals were up 72 percent and contributed 2.2 percentage points.
Seasonally adjusted mineral sales at current prices increased by 15.7 percent in March following -9.5 percent in February and 31.9 percent in January.
The Nedbank Group Economic Unit said sales continued to benefit from increased global demand, higher commodity prices and improved operations at major ports.
“Coal sales switched following five months of decline. Sales soared 22.3 percent for the first quarter,” said the Nedbank Group Economic Unit.
StatsSA said mining output had grown by 21.3 percent year-on-year in March, up from a downwardly revised contraction of 2.3 percent year-on-year in February, with PGMs up 68.8 percent and contributing 11.6 percentage points.
Iron ore production was 47.9 percent higher and contributed 4.1 percentage points, manganese ore was 29.9 percent higher, contributing 2.4 percentage points, and gold output was 10.5 percent higher, contributing 1.5 percentage points.
First National Bank economist Thanda Sithole said sustained higher commodity prices and rising external demand remained supportive of mining activity. “However, the more robust growth in mining output could largely be attributed to reduced output levels from last year’s supply chain disruptions and lockdown restrictions - that is, the lower base effect in 2020,” Sithole said.
Sithole said the near-term outlook for the mining sector remained intact. “We expect mining activity to be supported by the sustained higher commodity prices from last year and the anticipated robust economic growth rebound, mainly from South Africa’s major trading partners,” said Sithole.
Sithole said the near-term potential risks included the slow roll-out of vaccines and the disruptions to the supply of electricity, both of which could limit production even as the global economy recovers.