South Africa’s mining activity experienced a tough start to the year with output unexpectedly contracting in January, the Bureau for Economic Research (BER) noted in its weekly report on Friday.
According to Statistics SA, mining production slumped by 3.3% y-o-y, marking the first annual contraction since September, following a downwardly revised 0.2% y-o-y increase in December.
“This was the steepest decline since July 2023, led by marked declines in manganese ore (down 27.1% y-o-y), gold (-2.7%) and diamonds (-41.2%). This was outweighed by a solid 9.8% increase in the relatively big iron ore subsector,” BER noted in its report.
Seasonally adjusted mining production fell by 0.8% month-on-month in January after an upwardly revised 4.6% m-o-m slump in December.
In step with record-high gold prices and high iron ore prices at the time, mineral sales increased 5.7% y-o-y in January with gold sales soaring 113.3% and iron ore sales rising by 11.9%.
Manufacturing activity fared better in January as production rose by 2.6% annually, higher than an upwardly revised 1.3% y-o-y increase in December, according to the data.
“The headline reading handsomely exceeded the market consensus for modest annual growth of 0.9%, with virtually all gains coming from petroleum, chemical, rubber and plastic products (up 13.6%),” the BER said.
“This was mainly due to a double-digit rise in coke, petroleum products and nuclear fuel (up 25.9% annually). This subsector has been a major driver of annual production growth, likely lifted by the return in production of a refinery.”
In contrast, food and beverages weighed the most on output, declining 4.1% annually in January.
