The mining sector is expected to detract from SA’s first-quarter economic growth, due to three successive months of declining mineral production.
According to the latest Stats SA data, seasonally adjusted mining production shrank 4.5% in the first quarter compared to the last three months of 2024.
The sector’s declining output will result in a diminished contribution to the country’s fiscus with SA’s mineral sales falling more than 10% in the first quarter.
The weaker performance was primarily driven by SA’s platinum group metals (PGM) sector, which posted a 13.7% drop in output for the first three months of the year.
The past year has seen PGM producers cutting back on production in response to an uncertain demand environment and low prices as the growth of electric vehicles weighs on the automotive demand for platinum.
This year, US tariffs, including a 25% duty on all automotive imports, added more volatility to PGM markets by spurring fears that rising car prices would weigh on automotive demand further.
While PGMs shaved 4.3% points off the country’s headline reading, first-quarter mining production was higher in the iron ore sector.
Iron ore output rose 7.5% year on year in March, largely thanks to improvements in Transnet’s rail performance. Kumba, the country’s biggest iron ore exporter, reported a 6% increase in sales to 9-million tonnes for the three months under review.
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