Global mining output in February hits three–year low; Asia continues to hold the greatest rewards


Rio Tinto - Autonomous Haulage Trucks, West Angelas minesite; credit Christian Sprogoe Photography

Mining production globally registered its fourth consecutive contraction, falling 7.5 per cent year-on-year in February compared to a 3.3 per cent fall the previous month, Statistics South Africa said in a report. This registers as the largest fall in production since March 2016 when output fell 17.4 per cent year-on-year. 

Diamonds, iron ore and gold production detracted a combined 9.1 percentage points from overall production volumes, falling 48.3 per cent, 20.7 per cent and 20.6 per cent year-on-year respectively.

Platinum group metals (PGMs), however, made the largest positive contributor and continued to make steady gains rising 17.8 per cent year-on-year in February, adding 2.8 per centage points to overall production volumes. A relative robust global demand for palladium in the automobile market continues to support the sector. 

Overall, the mining sector has been plagued with slowing global growth, particularly in China, added to strikes, sluggish commodity prices and rotational load-shedding.

On the sales front, mineral sales increased by 10.6 per cent year-on-year in February 2019, with the largest positive contributors being PGMs, manganese ore, iron ore, and “‘other” metallic minerals.

Meanwhile Asia’s mining sector continues to hold the greatest rewards globally, with positive business environments, rich mineral deposits, supportive infrastructure and political stability in countries holding the top positions in Fitch Solutions’ Asia Mining Risk/Reward Index.

Fitch’s latest report revealed that Australia continues to reign at the top, while Myanmar and the Philippines, in an emerging Asian market, remain the regional laggards.

Factors enabling Australia’s outperformance include positive business environment, robust mineral deposits and solid infrastructure. Mongolia emerged as an investment hot spot for untapped reserves, and the availability of rich reserves will continue to attract investors.

Asia also has the second greatest vulnerability to commodity price volatility globally, after the Middle East and North Africa (MENA), which measures the relative vulnerability to price volatility by country according to the three largest mining commodities produced locally. Emerging markets including Myanmar and the Philippines will continue to underperform, Fitch predicts. The two countries are characterised by weak mining reserves, poor regulatory framework, corruption and increasing resource nationalism.

Shekhar Ghosh is consulting editor, He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at

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