In the dol­drums

Range of fac­tors hit in­dus­try

Finweek English Edition - - Economic Trends & Analysis - GRETA STEYN gre­tas@fin­week.co.za

MIN­ING OUT­PUT had a par­tic­u­larly dis­mal 2008, with vol­umes con­tract­ing 7,5% over the year as a whole com­pared with de­creases of 0,9% and 1,5% dur­ing 2006 and 2007 re­spec­tively. An anal­y­sis by Ef­fi­cient Group econ­o­mist Fanie Jou­bert shows the main con­trib­u­tors to the “dread­ful” per­for­mance were platinum group met­als, where out­put fell by 8,3% year-on-year, gold (-16,2%) and di­a­monds (-15,1%).

Pro­vid­ing a lim­ited amount of counter was iron ore pro­duc­tion, which in­creased by 14,6% over 2008 but con­trib­uted only 3% to to­tal min­ing pro­duc­tion.

Fac­tors af­fect­ing the min­ing in­dus­try dur­ing 2008 in­cluded the se­ri­ous elec­tric­ity short­ages ex­pe­ri­enced at the start of the year, nu­mer­ous strikes by or­gan­ised labour as well as re­ports of flood­ing of shafts. “That took place against the back­drop of the so-called com­mod­ity prices boom/bust, which saw prices record­ing high US dol­lar val­ues dur­ing the first half of the year but then plung­ing dur­ing the sec­ond half, with the cat­a­lyst be­ing the sud­den de­te­ri­o­ra­tion in the global eco­nomic growth fore­cast,” Jou­bert says.

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