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Eskom knocks gold production by 17%

By unknown | Mar 14, 2008 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

How severely Eskom knocked the mining industry in January by shutting it down for five days was revealed by Statistics South Africa's data yesterday.

Fanie Joubert, an economist at Efficient Group, said: "The dismal mining production figures are worse than we expected and indicate the direct negative impact of the electricity crisis on the production capacity of the economy."

January's gold production plummeted by 17percent and platinum group metals by 16percent from January 2007.

The data showed coal production fell by 13percent despite Eskom's claim that it spared collieries power ration-ing to avoid worsening the coal shortages at its power stations.

January's electricity crisis caused overall year-on-year mining production to fall by 11percent.

How badly power outages hit mines financially in January will only be seen in next month's mining data from Stats SA because sales figures lag production figures.

Yesterday's data included the annual sales figures for 2007, showing that rising commodity prices pushed the mining industry's revenue up by 16,6percent to R226billion.

This marked a slowdown from the 35,5percent sales increase in 2006.

Last year's platinum group metals sales came in at just under R80billion, up 22percent from 2006. Coal sales grew by 14percent to R43billion and gold sales grew by 7percent to R39billion.

Rising commodity sales helped the gold industry grow in monetary terms despite a decline in the volume of gold produced last year.

The Chamber of Mines reported this week that South Africa's gold production was 254685kilograms last year. This was 7,4percent lower than in 2006, and the country's gold production has fallen by an average of 6,3percent a year over the past decade.

China overtook South Africa as the world's biggest gold producer last year.

Stats SA's mining production index, which was set to 100 in 2000, fell 23,5points from December to 88 in January, taking it to its lowest level in five years. The seasonally adjusted drop was 10,3points from December to 98,5.

Joubert said: "The seasonal adjusted contraction of -10,4percent year on year recorded for mining production is among the weakest figures on record since 1976. Only during August 1987, when it was -10,6percent, could we find a larger contraction."


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