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South African Gold Production Surges the Most in Four Years

South African gold output surged the most in four years in December, providing an unexpected boost for the country’s mining production.

Gold output rose by 24.9% from a year earlier, compared with a revised 4.5% in November, Pretoria-based Statistics South Africa said Thursday in a statement on its website. That was the biggest increase since January 2016 and helped total mining production to grow by 1.8%, the first expansion in five months. The median estimate of five economists in a Bloomberg survey was for total output to contract by 3.5%.

Key Insights

  • The gold price that’s near a seven-year high prompted companies to boost production, even amid the deepest power cuts yet in December. The surge in the year-on-year number also reflects a slump in output in November and December 2018 due to a strike by members of the Association of Mineworkers and Construction Union.
  • South Africa was overtaken by Ghana as the continent’s largest gold producer last year as the country’s deeper mines, making it more difficult and expensive to extract the metal.
  • Rolling blackouts affected operations at many platinum mines causing output of platinum-group metals to contract by 3.9% from a year earlier.
  • Total mining production for the year was 1.3% lower than in 2018.

Source