SA’s mining production rose 1.2% in September compared with a year prior, outperforming consensus expectations and pushing the mining sector into expansionary territory in the third quarter.
After a 5.1% gain in July and a flat reading in August, mining production grew 2.5% in the third quarter compared with the second, with platinum group metals (PGMs) contributing the biggest share.
Domestic PGM production jumped 6.7% year on year in September, contributing 1.7% points to the headline increase.
PGM sales at present prices skyrocketed 53.8% year on year while a 60% increase in gold sales, underscored by the metal’s record price level, resulted in a 16.6% increase in the country’s mineral sales overall.
Further support came from manganese production, which gained 6.8%, and coal production, which added another 1% in the third quarter.
The rise in PGM production mirrors a strong pricing environment after a surge in prices in recent months. PGM miners rejoiced in June, when three consecutive years of market deficits finally worked their way into the price.
Platinum surged 36% in the second quarter, its biggest quarterly gain in decades. This run has continued into the final quarter, culminating in a more than 12-year peak of $1,745/oz in mid-October. The metal is now on track for its best year on record, up more than 80% this year.
The latest results and trading updates for PGM miners point to a much-improved sales outlook. Impala Platinum in August declared its first dividend payout in nearly two years, signalling the board’s confidence in the market.
In a similar move, Northam Platinum declared a final dividend in June nearly triple that of the previous financial year, while Sibanye Stillwater’s latest results show the miner strengthening its bottom line in the six months to end-June.
Overall, seasonally adjusted mineral sales at present prices rose 8.2% in the third quarter compared with the three months to end-June.
The mining sector’s stronger performance comes as soaring precious metal prices work in tandem with waning cost pressures, with input cost inflation falling to historical lows in August before rising slightly in September, according to the Minerals Council SA’s latest data.
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