Mining production declined in June, even as the mining industry ramped up to full capacity under alert level 3, according to Stats SA data released on Thursday.
Mining production declined 28.2% year-on year in June, somewhat worse than the revised 27.6% contraction recorded in May, At the start of June, the state eased lockdown restrictions that allowed the industry, including deep-level mines, to open up full production.onth-on-month, seasonally adjusted basis, production fell 1.4% in June. Meanwhile production fell 30.2% in the second quarter of 2020 compared with the first quarter of 2020 — suggesting the sector will continue to be a drag on growth.
This is due to a number of factors, including declining global competitiveness due to SA’s increasingly deeper ore reserves that are more expensive to extract. Electricity supply, regulatory uncertainty, and logistical bottle necks due to a lack of adequate railway networks and port infrastructure are also likely to weigh on the industry.