(Bloomberg) -- Mining output in South Africa, the world’s biggest platinum producer, contracted the most in two years in March.
Production shrank 8.4 percent from a year earlier, Pretoria-based Statistics South Africa said in a statement Thursday. That’s the biggest contraction since March 2016 and compares with a revised 2 percent expansion in February, it said. The median estimate in a Bloomberg survey was for a 0.2 percent increase.
Platinum output contracted 6.1 percent compared with a revised 13 percent drop in February, while gold production plummeted 18 percent, the most since January 2015 and a sixth straight month of contraction.
Aging infrastructure, reserve depletion and accidents have raised costs and curbed output in South Africa, once the world’s biggest gold producer. Mining companies came under added pressure late last year and in the start of 2018 from the stronger rand and have responded by closing shafts and cutting thousands of jobs in a labor-intensive industry.
“The story of recovery in the sector remains a fairy tale; it’s wishful thinking,” Peter Major, a mining analyst at Cadiz Specialized Asset Management in Cape Town, said by phone. “We are going to continue down on this path in platinum and gold mining.”
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