Johannesburg - South Africa’s mining production grew by 3.3 percent last year compared with 2014 according to data released by Statistics SA yesterday, but the industry is not yet out of the woods.
The agency said improved production data was not enough to lift the mining industry out of the doldrums as underlying fundamentals remained weak.
Read: Hard lessons on the horizon for miners
Even this week as global and domestic investors met in Cape Town for the Investing in African Mining Indaba, which ended yesterday, it was predicted that the industry would continue operating under strain and austerity was needed. Mark Bristow, the chief executive of Randgold, laid the blame on the industry on Wednesday.
“Because of its failure to invest in exploration, the industry was caught flat-footed by the boom and in its rush to catch up, in which it was spurred on by equally short-sighted fund managers and overzealous investment banks, it recklessly raised enormous amounts of equity and debt to fund M&A (mergers and acquisitions) and fund old marginal projects at a premium,” Bristow told the Indaba.
The World Bank predicted that iron ore would be the biggest loser among commodities this year as low cost supply continued to outstrip supply since its 2011 peak owing to lower Chinese growth.
Kamilla Kaplan, an Investec analyst, said that the higher production was linked to the 28.1 percent contraction in platinum group metals (PGMs) production in 2014, impacted by the five-month strike in the sector in the first half of 2014.
BUSINESS REPORT