South African mining sees year-end production rebound

South African mining production rebounded in the final three months of last year, a bright spot for the industry, which saw overall output in 2023 drop on an annualized basis.

Production grew 2.5% in the fourth quarter after a 0.9% slump in the prior period, according to data released by Statistics South Africa on Tuesday. 

Output increased just 0.6% year-on-year in December, well below the 4.9% median estimate of five economists surveyed by Bloomberg.

The largest positive contributors were platinum-group metals, coal and chromium ore. Gold production fell 3.4%. 

Total mining production was 0.4% lower in 2023 compared with a year earlier. 

The relatively upbeat data in the three months through December is a positive sign for the sector that buckled under the weight of mixed commodity prices, strike action and major operational headaches due to logistical and energy-supply constraints.

The mining industry suffered “unprecedented electricity load curtailment, debilitating rail and port failures, and pervasive criminal activities” last year, Minerals Council South Africa CEO Mzila Mthenjane said in a statement last week, noting a drop in the sector’s direct contribution to gross domestic product from 7.3% to 6.2%. 

The advocacy group added that trucks were used to move an estimated 26 million tons of coal to various ports due to logistical challenges – the highest level of road transport in the sector to date.

Overall, mining exports declined 11%, he said.

Separate data last week showed manufacturing – whose share of the economy is more than twice that of mining – saw production rise just 0.1% in the fourth quarter after a sharper-than-expected slump in December offset gains in the prior two months.