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South Africa sees economy shrink | |
(about 2 hours later) | |
South Africa's economy has shrunk for the first time in 10 years, official figures have shown. | |
Gross domestic product (GDP) fell by 1.8% in the last three months of 2008 from the previous quarter. | |
It came as Lonmin, the world's third-biggest platinum producer, said it was cutting up to 5,500 jobs at two South African mines. | |
A worldwide commodities slump has seen dramatic falls in demand and prices of metals and other mined products. | A worldwide commodities slump has seen dramatic falls in demand and prices of metals and other mined products. |
UK-listed Lonmin said a deal to cut 4,000 jobs at the Marikana mine in North West province and 1,500 in Limpopo province had been agreed with unions. | |
It has been hit by tumbling demand from the car sector which uses platinum to manufacture catalytic converters. | |
"With the current backdrop of challenging economic conditions, these agreements are an important milestone in our objective of restructuring the company," said Lonmin chief executive Ian Farmer. | "With the current backdrop of challenging economic conditions, these agreements are an important milestone in our objective of restructuring the company," said Lonmin chief executive Ian Farmer. |
Diamond decline | Diamond decline |
Overall, South Africa's economy grew by 3.1% in 2008, official figures showed. | |
This was well below the government forecast of 3.7% and the previous year's 5.1%. | |
Construction ahead of the 2010 World Cup is expected to continue giving the country an economic boost. | Construction ahead of the 2010 World Cup is expected to continue giving the country an economic boost. |
However, Southern African economies which rely heavily on commodities such as diamonds, gold and industrial metals have been particularly badly affected. | However, Southern African economies which rely heavily on commodities such as diamonds, gold and industrial metals have been particularly badly affected. |
Gold production dipped 13.6% to the lowest level since 1922, according to the Chamber of Mines - meaning it is now only the third largest gold-producing nation behind China and the US. | |
Last week, mining giant Anglo American said it would cut 19,000 jobs this year after a 29% fall in profits. | Last week, mining giant Anglo American said it would cut 19,000 jobs this year after a 29% fall in profits. |
It blamed the fall in earnings on sliding demand for raw materials. | It blamed the fall in earnings on sliding demand for raw materials. |
And earlier this week Debswana, a diamond producing firm jointly owned by Botswana's government and De Beers, said it would close two mines for the rest of the year because of falling demand. | And earlier this week Debswana, a diamond producing firm jointly owned by Botswana's government and De Beers, said it would close two mines for the rest of the year because of falling demand. |
Debswana's four diamond mines will close on 25 February, but two of them will resume work on 14 April. | Debswana's four diamond mines will close on 25 February, but two of them will resume work on 14 April. |
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