SA mining production fell by 3.5% y/y

South Africa's mining sector faced a challenging year in 2022, with a significant decline in production across various key minerals. According to Hlabi Morudu, Chief Director for Business Cycle Indicators at Statistics South Africa, mining output dropped by 3.5% year-on-year in December, with notable decreases in iron ore, diamonds, and platinum group metals (PGMs). These declines had a substantial impact on the overall industry performance for the year. In a recent interview with CNBC Africa, Morudu highlighted the key findings of the report, emphasizing the struggles faced by the mining sector. He noted that while there was a marginal increase of about 0.1% year-on-year in sales, driven primarily by coal and chromium ore, the year as a whole saw a 7.2% decrease in production. The decline in production was particularly evident in sectors such as coal, PGMs, and gold, which experienced significant drops in output. Coal, with a weight of 27.85, declined by approximately 1.4%, while PGMs and gold saw declines of 12.2% and 15.4% respectively. Only a few sectors, including chromium, other non-metallic minerals, and other minerals, reported positive growth for the year. On the sales side, total mineral sales were up 2.8% in 2022, with coal, chromium ore, and other metallic minerals among the major contributors. However, gold, PGMs, and iron ore experienced poor sales, with a notable decline of 22.6%. The challenging conditions in the mining sector reflect broader economic challenges facing South Africa. While the country has recently seen an increase in the value of total mineral production, the numbers reported for 2022 indicate a concerning trend. The impact of external factors such as exchange rates on production levels remains unclear, with Morudu highlighting the need for further analysis to understand the full extent of the challenges. As South Africa navigates these difficulties in the mining sector, stakeholders will need to collaborate on strategies to address the underlying issues and drive sustainable growth in the industry. The year ahead presents opportunities for innovation and strategic interventions to revitalize the mining sector and contribute to the country's economic resilience and development.