Mine closures weigh on mining output
Isaac Pinielo | Thursday July 6, 2017 17:30
Last year, state-owned mining company BCL Mine closed its loss-making copper and nickel operation together with Tati Nickel Mining Company (TNMC) and Mowana Mine. Data from the statistics office shows that the index of mining production stood at 77.1 in the first quarter of 2017, showing a year-on-year decline of 14.4% from 90.1 during the 2016 first quarter.
The quarter-on-quarter changes in the mining production reflect a 6.4% decline from 82.4 during the fourth quarter of 2016. Statistician General, Anna Majelantle said the closure of the three copper-nickel mines as well as unstable world commodity prices for all minerals are the major factors that contributed negatively to the growth of mining production during the first quarter of 2017.
“The main contributors to the decline in the year-on-year percentage change in the physical volume of mining production during the first quarter of 2017 were copper-nickel-cobalt matte contributing negative 11.3 percentage points followed by diamonds and soda ash with 2.4 percentage points and 0.5 of a percentage point respectively,” she said. Even though coal production had a positive year-on-year percentage change, Majelantle said this was not able to make a positive contribution to the overall year-on-year percentage change in the volume of mining production due to its insignificant weight in the index.
Diamond production recorded a decrease of 2.7% during the first quarter of 2017 as compared to the first quarter of 2016. The decline was largely attributed to the mining of lower grades diamonds at Jwaneng mine as well as maintaining business strategy to align production to trading conditions. The quarter-on-quarter analysis shows that diamond production decreased by five percent during the first quarter of 2017 when compared with production during the last quarter of 2016.
Gold production declined by 26% in the first quarter of 2017 when compared to the same quarter of 2016. Majelantle said this decline was as a result of unstable commodity prices. The quarter-on-quarter production comparison shows a decrease of 37.2% during the quarter under review when compared to the 2016 fourth quarter production. According to the data office, a decrease of 39% in soda ash production was registered during the first quarter of 2017 when compared to the same quarter of 2016.
The quarter-on-quarter comparisons reflect a decrease of 52.4% during the period under review as compared to the last quarter of 2016. Salt production recorded a decrease of 31.7% in the first quarter of 2017 when compared to the first quarter of 2016. The quarter-on-quarter comparison shows a decrease of 52.1% in production during the first quarter of 2017 as compared to production during the last quarter of 2016. Coal is the only commodity that recorded positive growth in production.
However, the comparison of the first quarter of 2017 and the fourth quarter of 2016 shows a decline of 9.6%. Majelantle further stated that it is important to note that though the Morupule power plant demand for coal resulted in the year-on-year increased demand for the commodity, the closure of the BCL Mine in the last quarter of 2016 negatively affected the coal production leading to low coal production in the first quarter of 2017.
She said copper-nickel-cobalt matte, silver and copper in concentrates recorded zero production during the period under review. “The instability and uncertainty of commodity prices had negatively affected the mines, leading to the provisional liquidation of the concerned companies,” said the statistician general.