THE stronger currency in the last quarter of 2009 impacted negatively on the performance of South Africa's mining sector, economists said.
They were responding to the November mining production data released by Statistics SA yesterday.
The figures showed a decline of 1,6percent year-on-year in November from -8,5percent in October. This was the slowest pace of contraction since May 2008.
Gold output fell again in November, the Stats SA data showed, after a study confirmed this week that the nation had fallen to third among the ranks of gold-producing nations. Gold output declined by 4,9percent in November on a 12-month comparison.
Once the largest gold producer in the world, South Africa has fallen behind China and Australia after its gold production sank by 5percent last year, London-based research consultancy GFMS said in a report on Wednesday.
Global gold production, meanwhile, increased by 6percent to a six-year high point last year.
Investment Solutions economist Chris Hart said there was some evidence that the mining industry was turning the corner.
"There was a huge fall in commodity prices by mid- 2008 and the commodity prices recovery in 2009 was offset the strengthening of the rand, hence mining companies were not able to reap benefits."
He said the debate on nationalisation of mines in SA would kill the mining industry very quickly. "The state doesn't have resources, managerial and technical expertise for managing mines, and there isn't a single example in the whole world were nationalisation has boosted the mining sector."
Mike Schussler of Economist.co.za said even though the year-on-year performance was still low; there were positive signs on the month-on-month figures. He said the January 2010 figures were likely come out in positive territory unlike the previous months which were affected by the strong rand.
Schussler said SA was "unlikely to get new investors" if "noises" would continue to be caused about the nationalisation of mines. "If these debates intensify or we move closer to the reality of nationalisation, no one will invest in South African mining."
Encouraging the spirit of more engagements and debate, general secretary of the National Union of Mineworkers Frans Baleni said both sides of the coin needed to be assessed. - Additional reporting byReuters
Strong currency hits SA mining
THE stronger currency in the last quarter of 2009 impacted negatively on the performance of South Africa's mining sector, economists said.
They were responding to the November mining production data released by Statistics SA yesterday.
The figures showed a decline of 1,6percent year-on-year in November from -8,5percent in October. This was the slowest pace of contraction since May 2008.
Gold output fell again in November, the Stats SA data showed, after a study confirmed this week that the nation had fallen to third among the ranks of gold-producing nations. Gold output declined by 4,9percent in November on a 12-month comparison.
Once the largest gold producer in the world, South Africa has fallen behind China and Australia after its gold production sank by 5percent last year, London-based research consultancy GFMS said in a report on Wednesday.
Global gold production, meanwhile, increased by 6percent to a six-year high point last year.
Investment Solutions economist Chris Hart said there was some evidence that the mining industry was turning the corner.
"There was a huge fall in commodity prices by mid- 2008 and the commodity prices recovery in 2009 was offset the strengthening of the rand, hence mining companies were not able to reap benefits."
He said the debate on nationalisation of mines in SA would kill the mining industry very quickly. "The state doesn't have resources, managerial and technical expertise for managing mines, and there isn't a single example in the whole world were nationalisation has boosted the mining sector."
Mike Schussler of Economist.co.za said even though the year-on-year performance was still low; there were positive signs on the month-on-month figures. He said the January 2010 figures were likely come out in positive territory unlike the previous months which were affected by the strong rand.
Schussler said SA was "unlikely to get new investors" if "noises" would continue to be caused about the nationalisation of mines. "If these debates intensify or we move closer to the reality of nationalisation, no one will invest in South African mining."
Encouraging the spirit of more engagements and debate, general secretary of the National Union of Mineworkers Frans Baleni said both sides of the coin needed to be assessed. - Additional reporting byReuters
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