South Africa’s mining and quarrying sector appears to be shedding off its losses record of 2016 and is reporting positive growth for 2017 a development that is likely to trigger an expansion of the country’s metallurgy industries, one of the key drivers in growth of the corrosion protection coatings and acid proof linings market.

Analysts and government reports say despite labor-related disputes in South Africa and instability of the international commodity prices, the mining sector has shown signs of recovery and could contribute largely to the growth of the corrosion protection coatings and acid proof linings market that was estimated at slightly more than $313 million last year.

In the first quarter of 2017, market consultancy Deloitte said South Africa’s mining & quarrying went up by 3.5% quarter on quarter basis defying earlier fears that the sector’s sluggish performance could eat into the market gains by the corrosion protection coatings and acid proof linings.

“The mining sector posted an impressive 12.8% quarter on quarter for the first quarter of 2017,” said Deloitte. “Going forward, the mining sector is expected to be the other, key driver of South Africa’s economic expansion in 2017,” said the consultancy.

Statistics South Africa (SSA), the national statistical service of South Africa, also said the 2016 production in 11 of 12 mining sub-sectors declined, led by iron ore, manganese and copper.

“High operating costs, a large number of enforced production stoppages associated with safety regulations, weak commodity prices and soft global demand contributed to a difficult operating environment” for the mining sector according to SSA.

Because of this not-so-promising performance by the sector, market consultancy Future Market Insights (FMI) predicted last year the growth of the South Africa corrosion protection coatings and acid proof linings market “is curbed due to the recent downfall of the region’s mining and quarrying industry, which has been recognized to be the foremost end-user industry for corrosion protection coatings and acid proof linings.”

Additional demand for corrosion protective coatings would come from South Africa’s steel industry which is experiencing a turnaround in growth after the 2016 downturn in the country.

“In South Africa, steel production picked up in the second half of the year due to a rebound in construction demand,” said the 35-member country Organisation for Economic Co-operation and Development (OECD).

“This recovery continued during the first month of 2017, with steel production in the African region increasing by 11.1% year-on-year,” said OECD.

According to OECD, South Africa’s future steel production, be it Carbon Steel, Alloy Steel, Stainless Steel or Tool Steel, “could be supported by plans to boost public sector infrastructure spending, particularly for the steel-intensive transport and logistics sector.”

Last year, South Africa’s corrosion protective coatings and durable acid proof linings market expanded to $313.1 million which was 4.3% higher than 2015 “driven mainly growing need for safeguarding the operational performance in the country’s end-use industries according to a 2016 market analysis report by FMI.

The report said several end-user industries in South Africa were under pressure to mitigate the effects of “undue exposure to chemical and mechanical abrasion on their operational efficiency triggering a rise in demand for effective corrosion protection coatings and durable acid proof linings.”

“The rising trend of adopting technologically-advanced corrosion coatings has induced the need for developing materials that can sustain highly-volatile deterioration,” said FMI.

Apart from the mining and quarry sector, the FMI report singled out South Africa’s automotive and chemical manufacturing segments as the other key drivers in the demand growth for “corrosion protective coatings in the market as investors in these two sectors focus more on automation of their production processes.”

South Africa’s automotive industry is the other largest end user industry of automation equipment, largely made of steel, due to the use of highly automated machinery in the production of vehicle components and assembling processes.

For example, Volkswagen South Africa, which recently invested $318 million at its Uitenhage plant, said part of its investment plan included the setting up of deployed 14 Fujitsu RX2530 rack servers each running 25 VMware virtual machines. This investment the company said: “Increased body production automation to 70% making the manufacture process significantly more agile.”

The company makes an estimated 120,000 cars and holds 65% of the country’s vehicle export market.

This investment in automation of automobile manufacturing “has resulted in the demand for enhanced coatings that provide a permanent solution to mechanical as well as chemical corrosion,” according to FMI.

Currently, South Africa’s automotive industry contributes up to 7.5% of the country’s gross domestic product (GDP) with an annual production of 500,000 vehicles under licence of prominent foreign brands such as Nissan, Ford and Volkswagen, in partnership with local companies.