Re­bound good for GDP

But sec­tor re­mains vul­ner­a­ble

Finweek English Edition - - Economic Trends & Analysis - GRETA STEYN gre­tas@fin­

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.

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