South Africa’s Mining Sector Faces Productivity Slump Amid Local Challenges

South Africa’s mining sector is facing a challenging 2025 after an unexpected slump in productivity at the end of 2024.

According to Statistics South Africa (Stats SA), mining production fell by 2.4% year-on-year in December, following a 0.9% decline in November. Platinum group metals (PGMs) and gold were the biggest negative contributors.

Local & Global Pressures on the Mining Industry

Hugo Pienaar, chief economist for the Minerals Council, noted that the real level of production was 2.4% lower in December 2024 than a year prior.

“In 2025, mining recovery depends on improvements in electricity supply, rail and port logistics, and local government efficiency. These are major challenges that won’t be fixed overnight,” he said.

The mining industry contributed negatively to Q4 GDP despite a 0.4% increase in overall mining output for 2024 compared to 2023.

Key Sector Performance in December 2024:

• Platinum Group Metals (PGMs): -7.1% year-on-year, despite a 1.4% growth for the full year.
• Gold: -8.4% year-on-year, due to high operating costs, deep mining challenges, and lower ore grades.
• Coal: +2.5% year-on-year, rebounding from a -1.6% dip in November.
• Manganese Ore: +8.7% year-on-year, accelerating from 1.6% in November.
• Iron Ore: +1.1% year-on-year, though monthly output dropped 16% due to logistics issues.

Transnet & Load-Shedding: Impact on Mining

The Minerals Council expects Transnet rail volumes to rise from 160–165 million tons in 2024/25 to beyond 170 million tons, which could ease some logistical constraints.

Meanwhile, FNB senior economist Thanda Sithole noted that mining production faces a volatile trade environment, weak global commodity prices, and slowing Chinese demand.

“The suspension of load-shedding and improving logistics should help recovery, but risks remain,” he said.

Despite elevated gold prices, structural challenges in South Africa’s mining sector—ranging from logistics bottlenecks to ageing mines—continue to undermine potential growth.

The mining sector remains vital for South Africa’s economy, but without urgent infrastructure improvements and policy interventions, productivity could remain under threat throughout 2025.

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