GOLD PRODUCTION PICKS UP ON M-O-M
BASIS IN APRIL
One can draw some encouragement
from the fact that m-o-m seasonally adjusted growth in gold production turned positive in
April, at 4.0%. This was not enough to reverse the trend of negative y-o-y growth. Y-o-y
growth in gold production, of -5.1% in April, was barely better than the -5.8% recorded in
March and the -6.9% recorded for 2003 as a whole. Nevertheless, the fact that positive
m-o-m growth was recorded suggests at least a blip in the downward trend of gold production. This blip
may not be coincidental. The Dollar price of gold began recovering in April after a significant decline in March. Furthermore,
the Rand/Dollar exchange-rate recorded a sudden sharp depreciation on the second of April.
The combination of these two developments may have encouraged the mining of lower grade
ore. Nevertheless, this improvement was insufficient to neutralise the fact that
for the first four months of the year as a whole, gold production fell by -5.0% compared
with the corresponding period of 2003.
EXCEPTIONALLY STRONG GROWTH IN
PRODUCTION OF PGM'S IN APRIL
In contrast with the upward blip in gold production,
production of PGM's picked up strongly in April. For the month of April alone, m-o-m
seasonally adjusted growth of PGM production was 9.7% and on a y-o-y basis 32.6%. This
brought the year to date growth in PGM production up to 32.0%, reflecting the coming to
fruition of the expansion of production arising out of a number of years' of large-scale
investment in the industry aimed at expanding production substantially. The pickup in PGM
production in April contrasted with m-o-m declines of -3.1% in respect of gold, -12.9% for
diamonds, -2.6% for other nonmetallic minerals, -4.2% for iron ore and -1.6% for copper.
Not surprisingly, given the pickup in PGM production, production of nickel, which is often
a byproduct of the PGM production process, recorded m-o-m seasonally adjusted growth of
24.3% in April. Year to date growth in nickel has been 9.1%. Production of manganese ore
was also strong, at 12.2% in April m-o-m, contributing to year to date growth in manganese
ore production, of 16.1%.The total effect of all these individual trends is that non-gold
mineral production
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grew by a healthy 2.2%
m-o-m seasonally adjusted in April, translating into 14.2% y-o-y growth for the month.
This was only marginally down on the year to date growth in non-gold mineral production,
of 15.5%.
STRONG GROWTH IN TOTAL MINING PRODUCTION
SHOULD CONTRIBUTE TOWARDS HIGHER GDP GROWTH
Adding the stabilising trend of gold production to the
strongly rising growth of non-gold mineral production, one arrives at a conclusion that
total mining production grew by a significant 1.8% m-o-m in April, and by 11.0% y-o-y for
the month. Importantly, this helped to generate year to date growth in total mineral
production of 10.0%. The strength of such growth should make an important contribution
towards lifting overall GDP growth in 2004, especially when one compares it to the 4.4%
growth recorded for total mining production in 2003 and the miniscule 0.8% positive growth
recorded in 2002. DECLINE
IN GROWTH IN VALUE OF MINERAL SALES ARRESTED IN MARCH
For the first time in over a year, positive growth was
recorded for the value of mineral sales for March. On a y-o-y basis, growth of 4.8% was
recorded, compared with -5.5% in February and -14.9% in 2003. This is not altogether
surprising. One is now reaching a stage whereby the sharp appreciation of the Rand between
late 2002 and early 2003 is now in the historical base against which one is comparing in
order to measure y-o-y growth. This is particularly noticeable in the case of non-gold
mineral sales, where positive growth of 6.7% was recorded for March, compared with -4.3%
for February and - 13.1% for 2003 as a whole. In respect of such mineral sales, however,
growth was also clearly helped by the sharp appreciation in the Dollar price of the
relevant commodities on the back of higher global economic growth. Most important amongst
these commodities were PGM's, where the platinum prices gained sharply over the course of
the past year and where production increased substantially. Even in respect of gold sales,
growth improved significantly and was only just negative in March, at -0.1%, compared with
-8.9% in February and -19.4% in 2003. |
