SA’s mineral output recovered in the second quarter thanks to an uptick in gold and platinum group metals (PGMs), Stats SA’s latest mining production data showed.
Stats SA said SA mining production rose 3.9% in the second quarter after posting a 2.4% year-on-year gain in June, in line with expectations from Investec and Nedbank.
The PGM sector was the main driver of the improvement in overall output, with production up 9% and contributing 2.5% to the headline figure.
Gold production climbed 4.7% from the first quarter, while chromium ore output was up 8.5%.
During the quarter, gold miners were supported by a 5.73% uptick in gold prices. Geopolitical uncertainty stemming from war in Europe and the Middle East, and US tariffs, has fuelled the risk-off sentiment supporting the metal’s rally.
SA PGM miners also enjoyed a price rally during the three months to end-June, with platinum prices surging more than 36% during the quarter.
SA’s shrinking supply of the metal and the growing demand for hybrid electric vehicles pushed platinum to its highest level in more than a decade last month, providing a lifeline to SA’s embattled miners.
Despite the improvement in output, SA’s mineral sales at current prices plunged by 14.4% year on year in June.
This was primarily driven by the gold sector, where sales fell 54% from a previous prior, and the manganese industry, where ore sales dropped by nearly 34%.
Sales of coal also slumped in June, down 5.5%, partly owing to the drop in coal prices, which have declined by more than 24% in the past 12 months, according to Trading Economics data.
Large coal producers reported weaker financial performances for the six months to end-June amid declining prices.
Thungela Resources has warned of a plunge in earnings as a result of weak market conditions and restructuring costs associated with winding down ageing coal mining operations.
Glencore reported a 14% drop in adjusted earnings before interest, tax, depreciation and amortisation (ebitda) to $5.43bn, while its balance sheet showed it was $3.5bn deeper in debt than at end-December.
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