The decrease in mining production will affect the country’s gross domestic product, while economic growth is already down.
Mining production disappointed again in March, although the statistics for March showed an increase compared to February.
According to the latest release from Statistics SA, mining production decreased by 2.8% in March compared to March 2024. However, seasonally adjusted mining production increased by 3.5% in March compared to February 2025 after month-on-month changes of -4.1% in February and 0.2% in January.
The largest negative contributors were platinum group metals (PGMs), which decreased by -9,9% and gold which decreased by -11.1%. The largest positive contributor was iron ore, which increased by 7.5%.
In addition, seasonally adjusted mining production decreased by 4.5% in the first quarter of 2025 compared to the fourth quarter of 2024.
The largest negative contributor was platinum group metals, which decreased by 13.7%, while the largest positive contributor was iron ore, which increased by 8.0%.
Mineral sales at current prices increased by 1.6% in March compared to March 2024. The largest positive contributors were gold, which increased by 13.9%, iron ore, which increased by 15.9% and coal, which increased by 6,0%. Platinum group metals were the largest negative contributor, decreasing by 13.9%.
Seasonally adjusted mineral sales at current prices increased by 0,5% in March compared to February, after month-on-month changes of -9.6% in February and 1.4% in January. Seasonally adjusted mineral sales at current prices decreased by 10.1% in the first quarter of 2025 compared to the fourth quarter of 2024.
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Mining production still disappointed in first quarter
Jee-A van der Linde, senior economist at Oxford Economics Africa, says, although South Africa’s mining sector shone a little brighter in March, output volumes for the first quarter of the year still disappointed.
“In addition, the current mood and outlook do not bode well for an upturn in momentum over the near term.”
He says the latest outturn was somewhat worse than their forecast of -2.0% and marks the fifth consecutive annual decrease.
This graph shows that mining output remains lower in annual terms despite the sharp rise in monthly production:
[Insert Graph-mining-production]
Source: Statistics SA
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Mining production down despite more stable electricity grid
Van der Linde says mining production has trended downwards since the start of the fourth quarter of 2024 despite a more stable national electricity grid. “However, several supply-side impediments to growth remain, and these are not expected to be adequately addressed in the near term. The recent uptick in seasonally adjusted mining production only partially reverses the sharp decline in February.”
Moreover, he says, first-quarter industry data indicate that the mining and manufacturing sectors will detract from real gross domestic product (GDP). “With all the economic data for the first quarter yet to be released, our base case is for real GDP to have expanded by 0.2% compared to the fourth quarter at the start of 2025.
“However, the odds of a quarterly contraction have increased. We forecast the South African economy will grow by 1.0%, which is below consensus and only somewhat higher than the 0.6% growth recorded in 2024.”
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Declining mining production poses downside risk to GDP
Thanda Sithole, senior economist at FNB, says the decrease in mining production during the first quarter of 2025, together with the quarterly weakness recorded in the manufacturing and electricity sectors, poses a downside risk to the GDP growth estimate for the first quarter.
“The remaining high-frequency data to be published over the next two weeks will give a clearer picture of how the economy performed in the first quarter. At this stage, we pencil in 0.2% quarterly GDP growth, which is lower than the 0.6% quarterly growth recorded in the fourth quarter of 2024.
“Near-term mining activity is still challenged by slowing global growth and lingering global uncertainty. While output increased slightly by 0.4% in 2024, the year-to-date performance has been disappointing, with output down by 4.7% in the first three months compared to the corresponding period last year.
“This suggests that the mining sector’s contribution to 2025 GDP growth will be negligible or even negative. The medium-term outlook should be underpinned by ongoing infrastructure reforms, particularly in energy and logistics.”
