Min­ing pro­duc­tion springs sur­prise with strong growth

The Herald (South Africa) - - BUSINESS - Su­nita Menon

MIN­ING sur­prised on the up­side in Au­gust with ex­cep­tion­ally strong growth‚ in­di­cat­ing that GDP growth may be stronger in the third quar­ter.

Min­ing pro­duc­tion in­creased by a sig­nif­i­cant 6.9% year-on-year in Au­gust af­ter in­creas­ing by 0.9% year-onyear in June.

The big­gest pos­i­tive con­trib­u­tors were iron ore‚ which con­trib­uted 1.3 per­cent­age points, di­a­monds with 1.2 points, and gold with 1.1 points.

Sea­son­ally ad­justed min­ing pro­duc­tion in­creased by 5.3% in Au­gust com­pared with July and in­creased by 1.4% in the three months ended Au­gust com­pared with the pre­vi­ous three months.

Many econ­o­mists had been ex­pect­ing a con­trac­tion in the sec­tor.

FNB econ­o­mist Mamello Matik­inca had ex­pected a year-on-year con­trac­tion for the first time this year, pri­mar­ily due to the higher base of Au­gust last year.

“The global over­sup­ply of iron ore has pushed the price of the com­mod­ity lower‚ and out­put of the ore‚ which ac­counts for nearly 15% of min­ing pro­duc­tion‚ should have soft­ened‚” she said.

In­vestec econ­o­mist Kamilla Ka­plan said she had ex­pected min­ing to con­tract by 2% year-on-year, while macro­eco­nomics web­site Trad­ing Eco­nomics had pro­jected min­ing out­put to have risen 0.3% from July last year. – Busi­nessLIVE

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