Business

SA Mining Slumps Again as Global Uncertainty and Local Crises Take Their Toll

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3 months ago

June 13, 2025

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Plunging platinum, strained railways, and tariff jitters add pressure to SA’s already fragile economy

South Africa’s once-mighty mining industry is in the throes of a serious slowdown and the numbers out this week confirm just how deep the rut has become.

Mining output dropped a sharp 7.7% year-on-year in April, according to Statistics South Africa. That’s the sixth consecutive month of decline and significantly worse than the 4.3% dip economists had anticipated. While a few mineral categories managed modest gains, the overall picture was grim, casting yet another shadow over South Africa’s economic outlook for 2025.

Platinum Group Metals Lead the Slide

Stats SA pointed to a major slump in platinum group metals (PGM) production down a staggering 24.1%, up from a 9.9% dip in March. Other key minerals including nickel, copper, gold, and coal also faltered. Combined, coal and gold alone shaved off nearly 0.6 percentage points from the topline production figure.

On the brighter side, diamonds, iron ore, chromium, and manganese recorded gains, though not nearly enough to drag the sector out of the red.

Jean-Pierre Terblanche from Stats SA described the sector’s performance as “worrying,” especially given its importance to GDP, exports, and employment.

Mining and Manufacturing Slump Together

The mining crash comes hot on the heels of a similarly gloomy performance from the manufacturing sector, which saw a 6.3% drop in April. This twin decline spells early trouble for second-quarter GDP figures, with fears mounting that South Africa may struggle to post any meaningful growth.

Thanda Sithole, senior economist at FNB, said the year-to-date mining output is already 5.4% lower than the same period in 2024 a blow to hopes that 2025 would bring a recovery. “We now expect either a negligible or even negative contribution from mining to GDP this year,” she warned.

Local Troubles Weigh Heavy

At home, the mining sector continues to be battered by issues that have become frustratingly familiar to South Africans: soaring electricity tariffs, poor rail infrastructure, and clogged ports.

“The energy crisis hasn’t gone anywhere, and logistics bottlenecks continue to eat away at competitiveness,” said Bongani Motsa of the Minerals Council.

Mining houses are also wrestling with high input costs, labour unrest, and the ever-growing threat of illegal mining, which has not only economic but also security implications. Despite record-high gold prices driven by global uncertainty, local production hasn’t been able to capitalise due to these domestic hurdles.

Tariff Wars and Trade Tensions

Globally, things aren’t looking much better. A sudden surge in trade protectionism, particularly from the US is making life harder for exporters.

On April 2, US President Donald Trump slapped a 10% base tariff on nearly all imports into the country. Some minerals like iron ore and diamonds from South Africa are facing an even steeper 30% tariff, albeit temporarily suspended for 90 days. Though PGMs, gold, coal, and manganese were spared for now, the uncertainty has already rattled investors.

“The mining industry thrives on long-term certainty,” said Investec’s Lara Hodes. “And right now, there’s very little of that on offer.”

The US is South Africa’s second-largest trading partner, so any deterioration in this relationship could hammer not just mining, but also agriculture and manufacturing.

A Global Chill in Demand

Meanwhile, a broader slump in global industrial demand is dragging down prices and orders. According to the JP Morgan Global Manufacturing PMI, export orders fell at their fastest rate since August 2023 a worrying sign for commodity-dependent economies like South Africa.

This points to a double squeeze: global buyers are pulling back, just as South African producers struggle to get goods out the gate.

Can Reforms Save the Day?

There is a sliver of hope in the form of infrastructure reforms, particularly in energy and logistics. These could offer medium-term relief, but economists agree that any rebound will depend on how the global economy evolves in the coming months.

The mining sector is often described as the canary in South Africa’s economic coal mine. Right now, that canary is coughing — and unless the country addresses both its internal inefficiencies and external vulnerabilities, the road ahead will be long and rocky.