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In this article we take a look at the latest mining production and sales numbers as published by Statistics South Africa and focus on the year on year growth rates of various commodities mined both in terms of volume of goods mined as well as the latest sales of values of these commodities. We will focus on:
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Mining production and sales numbers
The bar chart below takes a look at the year on year growth rates in both the volume of commodities mined as well as the sales values of these commodities for the month of January 2019. So are we mining more coal, gold, iron ore or platinum than what we did a year ago? And more importantly is the total value of sales of our commodities mined higher or lower than last year?
So lets start with coal, while the volume of coal mined during January 2019 is almost 6% lower than a year ago, the sales values are up almost 12%, indicative of rising prices fetched for coal. Perhaps ESKOM paying more? Or demand internationally is leading to more coal being exported to more lucrative off shore markets.
Iron ore showed a massive decline in terms of the volumes mined, but a very sharp increase in the sales values fetched. This is largely due to sharp increases in the international iron ore prices after one of the biggest Iron ore mines, which belongs to Vale in Brazil had to stop operations after one of their dam walls broke and caused massive damage, flooding and lead to the death of numerous people in Brazil. Government there ordered the halt of operations at the relevant which lead to supply shortages fears and saw the price of Iron ore sky rocket. A big benefactor of this is Kumba Iron Ore.
Those living and working in or at the platinum mines in the North West will be happy with the performance of PGM's. Volumes mined increased just over 20% while sales values were up almost 46% compared to last year January. So a very strong recovery in a mining sector that has been struggling for years on end now.
Lastly we take a look at Gold. Volumes of gold mined declined by -18.73% in January 2019 compared to January 2018. A little bit of good news for gold miners in SA is the fact that sales values were up 7.98%. But we maintain that the Gold mining industry in South Africa is currently in its sunset years and we do not see a bright future for the industry ahead in South Africa. Lack of a stable power grid, ever deeper and more dangerous mines, continued work interruptions due to strike action, illegal mining taking place inside mine shafts and a lower demand internationally, especially from younger generation Indian families who are breaking away from the traditional Gold buying for wedding parties etc. All of these factors have a negative impact on not only the gold prices internationally but also the viability of current gold mines in South Africa. At some point the break even cost to mine gold will be well above the international gold price, and gold mining firms will have to shut their doors.
Taking a look at the total sales values of the four commodities looked at in this article we saw the following sales numbers for these commodities in January 2019:
Coal sales where 40% higher than PGM sales in January 2019, 75% higher than Gold sales in Janaury 2019 and it was 268% higher than the sales achieved by Iron Ore miners in South Africa. Coal truly is South Africa's "Black Gold" and its taking the shine away from all of South Africa's other commodities and minerals. It truly is the king of the commodity roost in South Africa.
Iron ore showed a massive decline in terms of the volumes mined, but a very sharp increase in the sales values fetched. This is largely due to sharp increases in the international iron ore prices after one of the biggest Iron ore mines, which belongs to Vale in Brazil had to stop operations after one of their dam walls broke and caused massive damage, flooding and lead to the death of numerous people in Brazil. Government there ordered the halt of operations at the relevant which lead to supply shortages fears and saw the price of Iron ore sky rocket. A big benefactor of this is Kumba Iron Ore.
Those living and working in or at the platinum mines in the North West will be happy with the performance of PGM's. Volumes mined increased just over 20% while sales values were up almost 46% compared to last year January. So a very strong recovery in a mining sector that has been struggling for years on end now.
Lastly we take a look at Gold. Volumes of gold mined declined by -18.73% in January 2019 compared to January 2018. A little bit of good news for gold miners in SA is the fact that sales values were up 7.98%. But we maintain that the Gold mining industry in South Africa is currently in its sunset years and we do not see a bright future for the industry ahead in South Africa. Lack of a stable power grid, ever deeper and more dangerous mines, continued work interruptions due to strike action, illegal mining taking place inside mine shafts and a lower demand internationally, especially from younger generation Indian families who are breaking away from the traditional Gold buying for wedding parties etc. All of these factors have a negative impact on not only the gold prices internationally but also the viability of current gold mines in South Africa. At some point the break even cost to mine gold will be well above the international gold price, and gold mining firms will have to shut their doors.
Taking a look at the total sales values of the four commodities looked at in this article we saw the following sales numbers for these commodities in January 2019:
- Coal: R12 295 900 000
- PGMs : R8 723 200 000
- Gold: R7 015 200 000
- Iron ore: R4 579 600 000
Coal sales where 40% higher than PGM sales in January 2019, 75% higher than Gold sales in Janaury 2019 and it was 268% higher than the sales achieved by Iron Ore miners in South Africa. Coal truly is South Africa's "Black Gold" and its taking the shine away from all of South Africa's other commodities and minerals. It truly is the king of the commodity roost in South Africa.