Decline in mining output in August an economic setback - economists

Economists at FNB said the decline in mining output in August is a setback amid weak economic growth and elevated global trade uncertainty.

Mining production dropped by 0.2% year-on-year in August, after expanding by an upwardly revised 5.1% in July.

Platinum group metals and gold were the biggest drag in the latest data released by Statistics South Africa (Stats SA) on Tuesday.

Seven of the twelve mining divisions recorded lower production in August, with mixed results across key divisions.

In addition to platinum group metals and gold, manganese ore also dropped.

Prior to the latest data, mining output had shown encouraging signs of recovery over the past three months, even contributing positively to the second quarter GDP growth.

While favourable terms of trade and United States (US) tariff exemptions on certain critical minerals may offer some support, FNB economists said subdued external demand and persistent uncertainty are likely to keep global growth sluggish.

Adding to already pronounced calls, FNB said structural reforms to improve port and rail logistics will be vital to boosting medium- to long-term mining activity.

On the positive side, output gains were recorded in the iron ore and coal divisions.