WATCH: Gold has finally climbed out of its 25-month black hole

FILE PHOTO: An employee holds a 1kg gold bar at AGR (African Gold Refinery) in Entebbe
JOHANNESBURG – Coal, Gold and the platinum group of metals (PGMs) were the largest contributors to mining production, dipping 3.1percent year-on-year in November, though gold on its own inexplicably turned into a positive 5.2percent increase in output after 25 consecutive months of being in a black hole.

Mining production figures from Statistics South Africa (StatsSA) released yesterday indicated that platinum’s by-products palladium and rhodium, which make up 23.7percent of the mining basket, fell sharply by 13.5percent year-on-year, contributing a negative 3.6percentage points to overall production. Iron ore was at a negative 7.5percent output and accounted for -0.7points, similar to coal’s negative 2.8percent decline.

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This all accounted for a seasonally adjusted mining production decline of 0.9percent in the three months ended November 2019, compared with the previous three months.

Investec Economist Lara Hodes in a note said November’s reading was notably below consensus expectations of a negative 0.2percent year-on-year, reflecting an increasingly strained mining sector, facing a myriad of challenges.

Hodes pointed out that specifically, unpredictable electricity supply continues to undermine operational efficacy, while the constrained global demand for industrial metals weighs on South Africa’s export potential.

Source: iol.co.za