Mining production increased by 21.3% year-on-year in March, led by an increase in platinum group metals (PGMs), as companies moved into full capacity following the easing of Covid-19 lockdowns which impacted activity in the past year.
The data, released by Statistics South Africa, showed that PGMs production ticked up by 68.6%, contributing 11.6% to the mining production numbers. Gold increased by 10.5% while iron ore and manganese shot up 47% and 30% respectively.
On 26 March 2020, South Africa entered its first 21-day hard lockdown in a bid to prevent the spread of Covid-19. Government in March instructed mining houses to idle underground operations while coal mining, which was considered an essential service, continued operating.
Companies were eventually allowed to resume production at reduced capacity, with clusters of infections discovered at some operations affecting activity.
Mineral sales increased by 46.9% year-on-year in March 2021, with PGMs also being the largest driver, followed by gold, iron ore and non-metallic minerals.
Seasonally adjusted mining production increased by 4.5% in March 2021 compared with February 2021. This followed month-on-month changes of 0.9% in February 2021 and 4.2% in January 2021.
Commenting on the improved numbers, the Nedbank economic unit noted that the rebound in the global economy and boost to commodity prices had strongly supported the country's mining sector. The bank's economists noted that the numbers provided by the official statistics agency indicate the sector was year-to-date up 3.1%, something they said will be a positive for the first-quarter GDP.
They warned that looking ahead, the sector still faces "counter-balancing factors" - including the threat of the news waves of Covid-19.
"On the international front, improving industrial activity and firmer commodity prices will support higher production. Domestically, however, an uncertain legislative framework and unreliable power supply pose imminent downside risks."
The monthly mining production and sales survey is conducted by the Department of Mineral Resources and Energy and covers all mining sectors operating in the local economy. The figures collected calculate the volume of mining production indices in order to estimate the GDP and its components, which in turn are used to develop and monitor government policy, according to Statistics South Africa.