Rédaction Africa Links 24 with Ed Stoddard
Published on 2024-03-14 20:49:26
South Africa’s mining sector faced a challenging start in 2024, as production fell by 3.3% year-on-year in January and 0.8% on a monthly basis. The diamond sector was particularly hard hit, with output plummeting by over 41% compared to the previous year. Despite these setbacks, there are indications of a potential rebound in the diamond trade in the coming months.
Oxford Economics Africa highlighted that the diamond trade had been under pressure due to global supply issues and uncertainty over stricter bans on Russian diamonds. However, the worst of the diamond price slump may be over, as southern African producers are expected to either maintain or slightly reduce production levels. The phased implementation of broader sanctions and a tentative recovery in global diamond demand are also factors contributing to this cautious optimism.
In contrast to the struggling diamond sector, gold production saw a significant decline of 12.7% year-on-year. Despite this decrease, the red-hot prices of gold led to a remarkable 113% increase in gold sales on an annual basis. The platinum group metals (PGM) sector also experienced a sales slump of 25.3%, reflecting the ongoing price volatility in the industry.
On a more positive note, manufacturing output in January showed a 2.6% year-on-year increase and a 0.8% monthly growth. The petroleum, chemical products, rubber, and plastic sub-sector led the way with a 13.6% rise in output, indicating a strong performance within this segment.
Overall, South Africa’s industrial sector has had a mixed start to the year, following a sluggish GDP growth of 0.6% in 2023. The mining sector’s performance has been a drag on the economy, while manufacturing has provided some uplift. However, both sectors continue to face challenges such as power and logistics crises, as well as a lack of significant new investments to boost production and create employment opportunities.
Looking ahead, the mining sector may see further contractions and potential job losses, while the manufacturing industry is unlikely to experience a significant turnaround. Despite these challenges, there is hope for a gradual recovery in the diamond trade and continued growth in certain manufacturing sub-sectors.
In conclusion, South Africa’s industrial sector is navigating through a complex landscape in 2024, with both opportunities and challenges on the horizon. It will require strategic interventions and targeted investments to overcome the current hurdles and set the path for sustainable growth in the future.
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