Mining production in South Africa rose by 9.6 per cent year-on-year in November, according to recently-released data from Statistics South Africa.

Seasonally adjusted production rose by 2.6 per cent for the three-month period ending in November compared with the preceding three months, driven by pgm mining which contributed 1.8 percentage points.

The figures are welcome evidence of the recovery of South Africa's mining production, which suffered a major contraction in the second quarter of 2010.

Speaking to Mining Weekly Online, Investec economist Kgotso Radira forecast a positive outlook for mid-2011, attributed to rising commodity prices and the general economic recovery.

However, he warned that it remains to be seen whether South Africa will manage to take advantage of the "favourable environment" and stressed that inhibitors to mining production will continue this year.

"Electricity prices increased in excess of 20 per cent in the past two years and similar increases are expected in July, putting further pressure on profit margins," he told the publication.

"Any electricity supply shortages would affect the economy more than in previous years as economic activity has not fully recovered from the recession."

He went on to say that pgms will remain a primary driver to production, boosted by steps taken by the world's economies to decarbonise.

According to the Statistics South Africa figures, the seasonally adjusted value of mineral sales for the three months ending in October 2010 indicate an increase of 7.1 per cent, compared with the preceding three months.

This increase, equating to R5.3 billion (£476 million), was again largely spurred on by the rising sales value of pgms, contributing R2.4 billion (£216 million).

Meanwhile, gold output in South Africa increased by 2.5 per cent month-on-month in November, following a 6.7 per cent jump in October, partly as a result of its higher commodity value.

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November mine output up 9.6% (18/01/11)
SA mining production shows continued recovery in November (18/01/11)

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