IGO to record impairment against nickel assets in strategy shift
IGO has been undertaking a strategic review in an attempt to revaluate its resources.
South African mining output rebounded strongly in April, rising by 12.4% year-on-year, after contracting 1.4% in the previous month, a report by Statistics South Africa showed on Thursday.
Year-to-date production increased by 5.2%, on the back of surging output of nickel, manganese, platinum group metals and copper but gold production continued to lag, only managing a 1.5% increase. Analysts warned that the outlook for the rest of year was clouded by scheduled wage negotiations across the industry that could lead to strikes and a strong currency which hampers competitiveness.
However, Investec analyst Kgotso Radira warned that mining production during the second half of the year could be disrupted by industrial action in the coal, gold, diamond and platinum sectors, as trade unions were demanding wage increases in excess of 10%.
Absa Capital pointed out that despite the more positive outlook for the mining sector, production remained around 3% below the pre-recession peak, proving that the sector has some way to go before full recovery could be attained.
