Rebound good for GDP
But sector remains vulnerable
FINANCE MINISTER Trevor Manuel is counting on a rebound in mining production to boost gross domestic product figures in the second quarter. Latest Statistics SA figures for mining show evidence of the expected rebound. Mining production in May rose 0,8% year-on-year after declining 1% in April. Efficient Group economist Fanie Joubert notes that’s a huge improvement on the average monthly contraction of 11,4% year-on-year recorded during first quarter 2008. The dramatic contraction in the first quarter was the result of electricity cuts. The dire situation in the first quarter slashed 1,1 percentage points off SA’s GDP growth rate.
Among the heavyweight mining subsectors, platinum group metals managed to record a rise of 2,4% year-on-year in May after contracting on average 12% year-onyear over the first four months of 2008. However, gold production growth is still heavily in negative territory.
The Chamber of Mines says the average rise in electricity tariffs for the mining sector over 2008/2009 will be 29% – an additional cost of R1,6bn for the sector.