August 30, 2019 / 1:03 PM / 17 days ago

UPDATE 1-South Africa's trade balance swings to surprise deficit in July

(Adds details, background)

JOHANNESBURG, Aug 30 (Reuters) - South Africa’s trade balance swung to a 2.9 billion rand ($190 million) deficit in July after a revised 5.5 billion rand surplus in June, data from the revenue service showed on Friday.

A Reuters poll had forecast a 2.7 billion rand trade surplus.

The trade war between China and the United States and its impact on global trade demand are expected to begin hurting the country’s exports sales, especially of commodities.

Exports rose 3.4% on a month-on-month basis to 112.9 billion rand in July, but were outpaced by a steep climb in imports, which were up 11.7% to 115.8 billion rand, the South African Revenue Service (SARS) said.

Sales of base metals fell 10%, mineral product sales fell 8%, and precious metal sales dipped 5%, data from SARS showed.

Mining production in South Africa has been in free fall since 2018, hit by uncertainty over local ownership and by sluggish international demand for commodities with economic growth in China slowing.

Mining companies are also fighting to have a 2018 mining charter aimed at increasing black ownership reviewed, with uncertainty over the outcome of the move leading to reduced capital investment.

The charter, which was delayed for years amid wrangling with the industry, among other stipulations raised the level of black ownership to 30 percent from 26 percent for new mining rights while companies that have met the 26 percent threshold do not have to increase it. ($1 = 15.2369 rand) (Reporting by Mfuneko Toyana; Editing by Alexander Winning and Hugh Lawson)

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