Mining sector steadily coming out of stagnation

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The mining sector is slowly but surely recovering out of the doldrums. Mining production output increased by 6.5 % year on year in November 2017.

The largest positive contributors were Iron Ore which is up by 20.7 % and contributed 2 point 5 percentage points.

Coal increased by 8.5 %, whereas Platinum Group metals increased by 12.3 %.

Economists are optimistic that this will contribute positively to the country’s Gross Domestic Product.

Ian Cruickshanks,  Chief economist at the South African Institute of Race Relations says: “It means that worldwide there is demand for the mining commodities which we produce, it’s also going to help us with our exports – they will have higher value.”

But a negative significant contributor was Gold which decreased by 8.3 %.

Cruickshanks says this was caused by a reduction in Gold commodities globally.

“Perhaps what that shows is that there is less demand on gold as a hedge against inflation, and as we know worldwide inflation is relatively low especially in developed market economy.”

With the world economy continuing to grow its expected that this will help boost the demand for South African mining export commodities.