| In 2019, South Africa was the sixth largest producer of iron ore, at 72 million mt. Likewise, in 2019, they were the third largest exporter of iron ore, at 67 million mt. Thus approximately 93% of South Africa’s production was exported. |
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| Despite the pandemic, exports have been steady. Relative to history, the pandemic has had no meaningful impact on exports. |
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In 2020, South Africa was the world’s largest producer of platinum. Although platinum is a precious metal, it has extensive industrial applications, specifically in the automotive sector. |
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South Africa has also consistently been one of the world's top producers of gold in recent years. Like platinum, gold is a precious metal yet has many industrial uses. |
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However, its gold production has been declining since 2014. |
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AEGIS Thoughts:It is still early too early to determine if the newly found Omicron variant will have a meaningful impact on South African metals production or exports. As of this writing, there are no reported slowdowns or shutdowns in mining or port activities. A potential shutdown or slowdown in mining or shipping of iron ore, platinum or gold could rally prices for these metals. Industrial demand for these metals has been strong and is expected to increase. For instance, the World Platinum Investment Council expects platinum demand in the automotive sector to rebound in 2022 as it is a cheaper alternative to palladium. The group expects automotive sector demand to be 3.24 million ounces in 2022, up by 20% from 2021. Even prior to the Omicron COVID variant, the mining sector has been very proactive in keeping COVID’s impact to a minimum. According to Minerals Council South Africa, nearly two-thirds of mine workers have been vaccinated as of November 29. This may keep prices from rising. |