Statistics South Africa (Stats SA) said on Thursday that it was unable to publish monthly mining production and sales data for June because the Department of Mineral Resources and Energy (DMRE) had not provided the numbers on time. These are crucial statistics and the department’s failure on this front underscores its mounting capacity woes.
Business Maverick understands that the last time this happened was in June 2010, when the DMRE moved offices. This makes it an almost unprecedented failure from a department that already has clear capacity issues.
The DMRE said it would revert soon to Business Maverick when asked for comment, but had not done so by the time of publication.
The Minerals Council South Africa, the main industry body, said it was not aware of any issues on its side.
“Mining companies respond directly to the DMRE’s surveys on a monthly basis and have done so for many years. The DMRE collates the information submitted and then submits industry statistics to Stats SA. It is the DMRE’s responsibility to carry out the monthly surveys and to follow up directly with their respondents should they encounter any delays in returns,” the Minerals Council said in response to queries from Business Maverick.
“The Minerals Council is not aware of any challenges experienced by mining companies to submit the required data on time,” it said.
The data is published around the middle of each month at 11.30am sharp. On Thursday, Stats SA put out the following announcement:
“Delay in June 2021 mining statistics (statistical release P2041) Statistics South Africa (Stats SA) publishes monthly statistics on mining production (indices) and sales (rand values). The source data are provided by the Department of Mineral Resources and Energy (DMRE). The source data for June 2021 will not be received from the DMRE in time for the forthcoming statistical release, which had been scheduled for Thursday, 12 August 2021. A new publication date will be announced as soon as possible.”
This data is crucial for the likes of economists, the South African Reserve Bank (SARB), the National Treasury, investors, traders and, of course, the mining sector. Economists, the SARB and the Treasury need it to construct their forecasts for gross domestic product performance (GDP) – in this case, June mining data is critical for completing GDP estimates for the second quarter, as well as for forecasts on the trade balance. Investors will mine it as they weigh up decisions about committing capital to the sector.
For the mining industry, it provides a snapshot of how peers and competitors are likely faring. Commodities traders closely watch the data to make pricing decisions. There is a reason why major financial news services flash the data immediately to clients.
And failure to get the data on time to Stats SA provides an indication of how the DMRE is faring.
The DMRE has also not provided data for two years to the Joint Oil Data Exercise (JODI), a global initiative that seeks to provide transparency to oil markets. South Africa’s last submission was in July 2019 (https://www.jodidata.org/gas/). In fairness, South Africa is not the only laggard on this front, but it points to wider problems.
“It’s a signal that the administration is not up to scratch,” Mike Schussler of Economists.co.za told Business Maverick.
The DMRE’s capacity issues have been evident for some time, notably the backlog of over 5,000 applications for mining rights, prospecting rights, mining permits, renewals and cessions or the sale of rights.
There is also the opaque manner in which many mining rights have been issued, raising concerns, notably around obscure coal projects. (Government pledges to tackle serious mining application… and Murky new world of South African coal). This is a key reason why the DMRE needs an efficient and transparent mining cadastre to replace the shambolic Samrad system for logging and tracking mining-related applications.
In the case of the data delay with StatsSA, one suspects that it is a technical/IT issue. But if it stems from an IT problem, what does that say about the service provider or the DMRE’s ability to quickly respond to such an urgent matter? The DMRE finally has a tender out to replace Samrad. One would hope that the winning service provider will be held to a higher standard. DM/BM