South Africa’s October platinum group metals production declined sharply by 27 %

World’s largest Platinum producer, South Africa’s October platinum group metals (PGM) production declined sharply by 27 % compared to October 2010. Overall mining output contracted by 12.7 % y/y, led by the drop in PMGs, which make up the biggest slice of the country’s mining industry.

A statement from Nedbank, one of the largest banks in South Africa, said: “The outlook for the mining sector remains weak, constrained by poor global growth prospects, as well as domestic constraints. The rand remains firm despite its recent bout of weakness and it is not likely to boost export competitiveness considerably, while logistical problems, particularly with transport and energy capacity continue to hurt the sector.”

The drop was the highest percentage drop in October in recent years according to Statistics South Africa, statistical service of S A, which claimed that historical data shows that output usually falls in October. The yearly drop in PMG output was accompanied by an 18.9 per cent fall in production from September, according to the data from Statistics South Africa.

In October 2010, PGM output fell almost 22 percent. Also the overall mining production fell by 3.1 per cent during the three months to the end of October against the preceding quarter. The main contributor to the decrease was PMGs, which contributed 1.5 percentage points.

JP Morgan Cazenove called October’s fall in output “an unprecedented slump” and attributed it to a jump in Section 54-related disruptions in a research note last week.

“The potential impact of ongoing disruptions of this nature must not be underestimated. The impact on mine profitability would be profound,” the note said. – Commodity Online

Posted by admin on Dec 15 2011. Filed under Platinum. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry