SA’s mining industry, a drag on economic growth in the first quarter, extended its bad run to the second quarter of the year with output contracting 7.7% in April.
April’s year-on-year print was worse than market consensus of a 4.3% contraction — setting the scene for another negative contribution to GDP figures.
Elevated input costs, low metal prices and logistics bottlenecks continue to limit the sector’s export potential.
The industry recorded its sixth consecutive month of downturn in April.
This comes after seasonally adjusted mining production shrank 4.5% in the first quarter compared to the last three months of 2024, with the sector entering “technical recession” in March after two consecutive quarters of decline.
Mining remains a central component in the economy, accounting for 6.1% of GDP last year, and the sector’s weak economic contribution was one of the main culprits behind SA’s sluggish growth in the first quarter.
SA’s economy expanded just 0.1% in the first three months of 2025, marking a slowdown from the revised 0.4% growth recorded in the fourth quarter, with mining the worst-performing sector in the first quarter.
“Domestically, ongoing challenges that affect the sector’s global competitiveness include double-digit electricity tariff escalation which has constrained deep-level mining and local beneficiation, as well as inefficient rail and port logistics,” Minerals Council SA senior economist Bongani Motsa said.
Despite the slow start, the council expects second-quarter production to increase by 1.6% quarter on quarter, provided that the level of output in May and June remains at comparable levels to that of April.
“If realised, that would be a notable improvement given the large first- quarter 2025 decline of 4.1%,” Motsa said.
Primary driver
The primary driver behind SA’s falling mineral output this year has been the platinum group metals (PGM) sector. PGM production plunged by more than 24% year on year in April, shaving 8 percentage points off the headline figure.
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.
Additionally, the domestic sector’s efforts to cut back on supply were accelerated by unusually intense rainfall in the first three months of the year, with major producers reporting lower output as a result.
Tharisa blamed rainfall for a slump in its second-quarter earnings, while heavy flooding in Limpopo forced Amplats to suspend operations at its Amandelbult mines, resulting in an 8% drop in the firm’s first-quarter PGM output.
Impala Platinum also reported a 6% drop in production for the quarter to end-March, while Sibanye-Stillwater’s SA PGM operations produced 389,313oz, down from 436,548oz in the previous quarter.
In its latest annual results, Sibanye-Stillwater said it might close unprofitable shafts this year if prices do not recover, while Implats CEO Nico Muller has urged platinum producers to keep the doors open for further cuts.
However, with above-ground stocks falling to only three months of demand cover, investors flocked to the precious metal in recent weeks in anticipation of a looming uptick in prices.
Outside the PGM sector, further pressure came from the gold and coal mining sectors, where production shrank 2.5% and 1.7% respectively in April.
“Despite the surge in the gold price as a safe-haven investment, amid a highly uncertain global environment, production domestically faces a myriad challenges,” said Investec economist Lara Hodes, citing input cost inflation, labour challenges and the growth of illegal mining.
The decline was somewhat offset by an increase in iron ore production, reflecting improvements in SA’s logistics. In its latest annual results, Kumba, the continent’s largest iron ore producer, said it was encouraged by early signs of progress made by Transnet, which helped boost its sales volumes in the quarter ended March.
Additionally, amid record gold prices, SA’s mineral sales at current prices increased by 0.7% year on year in April. Sales of gold soared 57.6% year on year, adding 9.4 percentage points to the overall number, while manganese sales were up by two thirds compared to April last year.
Update: June 12 2025
This story has been updated with new information.
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