Manganese, Diamonds, PGMs Lift S. African Mining

Mining Weekly, Mariaan Webb

South Africa's mining production rose 9.6% year-over-year in May, boosted by a 50% increase in manganese ore output and a 30% increase in diamond production, Statistics South Africa (Stats SA) reported on Thursday.

Platinum group metals and nickel also showed year-over-year double-digit growth in May, while gold production declined by 5.8% over the same period. However, production growth slowed from the 12% reported in April, with month-over-month output falling 5.9%.

A representative from Nedbank said that the outlook for the mining sector has worsened in recent weeks. "Although commodity prices remain supportive there are indications of a slowdown in global demand. The strength of the rand, which hampers export competitiveness, as well as transport and energy capacity are also hurting the sector."

The threat of labor strikes also did not bode well for activity in the coming months, with labor unions declaring disputes in the gold, coal and platinum sectors. "Some moderation in mining output could be experienced during the second half of the year due to a high base established in 2010 and some loss in growth momentum internationally," the representative said.

Meanwhile, Stats SA reported that the value of mineral sales jumped 16% to R27.64B in April, compared with the same month a year earlier. The actual value of mineral sales at current prices for the three months ended April increased by 28%, compared with the three months ended April 2010. The major contributors to the higher sales value were iron-ore, coal, PGMs and gold, the agency said.