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Power cuts to lead to drop in mining output

Friday, May 10th, 2019

Mining production was hit hard by power cuts and strikes at gold mines in recent months. 
Image: Gallo Images

Power cuts in the first quarter of the year have delivered a blow to the mining and manufacturing sectors.

There were 26 days of power cuts up to the end of March. Mining production was also hit hard in recent months by strikes at gold mines led by the Association of Mineworkers and Construction Union, where about 15,000 workers downed tools for almost five months at the Driefontein, Kloof and Beatrix mines.

Workers returned to work at the end of last month, which could see a recovery in gold production levels.

Mining production fell 1.1% year in March and was down 3.4% in the first quarter.

Manufacturing production grew 1.2% in March but decreased 2.4% in the first quarter. Mining contributes about 8% to SA’s gross domestic product while manufacturing contributes 13%.

The data will increase pressure on President Cyril Ramaphosa to push through economic reforms.

Analysts expect that after the vote Ramaphosa will have more room to implement structural reforms that encourage investment to spur growth.

“After a weak first quarter we think that conditions will improve later in 2019 and that economic growth will pick up a bit,” Capital Economics economist John Ashbourne said. “More timely data do, at least, suggest that conditions improved in April.”
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