Statistics South Africa (Stats SA) reports that mining production increased by 0.3% year-on-year in August, with the largest positive contributors having been manganese, platinum group metals (PGMs) and chrome.

PGM output was 4.7% higher year-on-year, contributing 1.2 percentage points, while manganese production was 16% higher year-on-year, contributing 1.2 percentage points.

Chromium ore production grew by 24.8% year-on-year in August, contributing 1.1 percentage points.

Iron-ore, which contracted by 15.2% in August, contributed -2.1 percentage points to the headline figure, while gold output was 4.6% lower year-on-year and contributed -0.7 of a percentage point.

Seasonally adjusted mining production increased by 2.9% in August compared with July, and followed month-on-month changes of -0.8% in July and -1.8% in June.

Seasonally adjusted mining production decreased by 1.4% in the three months ended August 31, compared with the previous three months, with the largest negative contributors having been iron-ore, gold and PGMs, which contracted by 5.9%, 4.3% and 1.5%, respectively.

Manganese ore, with growth of 10.5%, was the largest positive contributor in the three months ended August 31, on a seasonally adjusted basis.

In terms of sales, mineral sales at current prices decreased by 9.9% year-on-year in August.

The largest negative contributors were gold, with 80.5% lower sales and a contribution of -13.9 percentage points, PGMs with 5.4% lower sales and a contribution of -1.1 percentage points, as well as ‘other’ non-metallic minerals, which contracted by 38.3% and contributed -2.3 percentage points.

The largest positive contributors to mineral sales in August were manganese ore, chromium ore and coal, which grew by 65.1%, 28.2% and 5.9%, respectively, year-on-year.

Stats SA reports seasonally adjusted mineral sales decreased by 20.7% in August compared with July, which followed month-on-month changes of -1.8% in July and 21.4% in June.

In the three months ended August 31, seasonally adjusted mineral sales increased by 10.6%.

Minerals Council South Africa comments an 80% plunge in gold sales in August is perplexing given the elevated gold prices, altough it does indicate the detrimental impact of lower gold production on sales.

Commenting on the mining production figures, Minerals Council says given volatility in monthly production and in some sense also quarterly gyrations, it is prudent to look at the mining output trends over a longer period.

In the first eight months of the year, total real mining production increased by 0.3% year-on-year. This follows contractions of 7.2% in 2022 and 0.2% during 2023. At this stage, mining output is expected to increase by about 0.5% in 2024. Albeit modest, this would be the first increase for an entire calendar year since the post-lockdown bounce in 2021.

Despite the welcome rise in mining output in August, the full-year number will only be modestly higher than last year, but recent and forthcoming policy interest rate reductions from major central banks should support precious metal prices.