SADC Mining activity improves

Timo Shihepo

Windhoek – Mining activity in southern Africa is gradually improving according to the latest data from various chambers of Mines in the region, this despite the commodity prices continuing to tumble around the world. 

There is no doubt that these are tough times for the SADC region, with commodity prices declining and other external shocks slowing down growth. As a result the SADC region faces significant challenges, as real GDP growth declined from 4.3% in 2010 to 1.8% by 2016 and it’s only expected to recover to 2.6% this year.

Mining activities in Namibia, South Africa and Botswana have however shown progressively improvement with Namibia recording an impressive 16.8% increase in 2017 while South Africa recorded 6.9% increase according to latest statistics.

Namibia’s recent mining activity surge is driven by the slight improvement in the output of diamonds, special high-high grade zinc and gold bullion, according to Namibia’s Chamber of Mines chief executive officer, Veston Malango.

“Half-year production results show improvement mostly because of the diamond outputs, which is consistent with price improvements for these minerals and continuous rebound of the gold price. Despite the improvement in some sectors, the uranium sub-sector however remains strained, with prices persistently hovering around $20 per litre barrel after its fall to record lows of $18,75 per litre barrel towards the end of 2016,” he said.

According to Statistics South Africa, the country’s surge in production was supported by a strong performance of the iron ore sector, while platinum group metals (PGMs) were a significant negative contributor in the period under review.

Mining ore production came in at 29.9% recorded in April and 28.6% in May; the iron ore mineral group comprises 14.9% of the mining production index. Statistics also shows that South Africa’s mining production increased by 3.6% year on year.

In Botswana, although mineral production has remained subdued, diamond sales rebounded as conditions in the global market begun to improve. Non-mining activities also expanded, supported by accommodative fiscal and monetary policies and reforms in the electricity                                                                 sector.

Botswana Chamber of Mines chief executive officer, Charles Siwawa said exploration for minerals in diamond- dependent Botswana will continue even in the latter part of this year despite the tough economic conditions its mining industry faces.

Mining, he notes, contributes 34% to the country’s gross domestic product (GDP) and 50% of its taxes.

Zambia’s mining activity is however continuing to decline due to local and international factors. It recorded a decrease of 5.2% so far in 2017.

Zambia’s copper production is also expected to inch lower this year mainly due to lower output from Konkola Copper Mines, a subsidiary of London-listed Vedanta Resource, the ministry of mines said this week.

According to its ministry, total copper production is forecast to fall to 774,290 tonnes from 753,992 in 2016. Production at Konkola Copper Mines will fall by 40 percent while output at Lumwana Mine, should decline by 15 percent.

Mining is an industry of strategic importance in southern Africa. Roughly half of the world’s vanadium, platinum, and diamonds originate in the region, along with 36% of gold and 20% of cobalt.

These minerals contribute greatly to several Southern African Development Community (SADC) Member State gross national product and employment, and many of them depend on mineral exports for their foreign exchange earnings.

September 2017
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