SA’s mining sector delivered an unexpected improvement in May, despite widespread forecasts of a renewed contraction, with production edging up 0.2% year on year after April’s steep 7.7% contraction.
The better-than-expected performance offered a modest reprieve for an industry grappling with persistent headwinds including weak demand and logistics bottlenecks.
Iron ore emerged as the main pillar of strength, with output rising 12.5% and contributing 1.7 percentage points to the headline reading. In contrast, manganese ore and coal continued to weigh on overall performance, recording declines of 13% and 4.6%, respectively.
“Following a poor start to 2025, the mining sector is slowly regaining lost ground, with output volumes trending higher in [the second quarter of] 2025. That said, the increase stems from a low base,” said Jee-A van der Linde, senior economist at Oxford Economics.
Mining was the first quarter’s worst performer, contracting 4.1%, subtracting 0.2 of a percentage point from GDP. This marked a further deterioration from the revised 0.1% contraction in the previous quarter, with platinum group metals (PGMs) the main drag on output.
The industry is a pillar of the economy, vital for creating jobs, driving foreign income and supporting industrial expansion.
On a seasonally adjusted basis, mining production climbed 3.7% in May compared to April, marking the third consecutive month without a decline.
Over the three months ended May, output increased 2.6% relative to the previous three-month period, reflecting sustained gains in iron ore and smaller improvements across a range of commodities.
PGMs, which make up more than 30% of the mining basket, staged a notable recovery from April’s steep decline of 24.1%, with production volumes nearly flat year on year.
“Bulk mineral exports continue to be impacted by the country’s logistical challenges, including port and rail inefficiencies, leading to billions of rand in lost revenue. Creating a world-class logistics system to drive export growth remains a key priority of government,” Investec economist Lara Hodes said.
Sales data painted a brighter picture, underpinned by a remarkable surge in gold revenues.
Mineral sales at current prices jumped 18.8% year on year in May, with gold alone soaring 338.7% and contributing more than 25 percentage points to the headline number.
PGMs, however, posted a 15.6% decline in sales, underscoring pressure from weaker global automotive demand and volatile pricing.
Seasonally adjusted sales increased 6.3% month on month. Over the latest three-month period, mineral sales grew 4.1% compared with the preceding quarter, offering a glimmer of support to export earnings despite lingering logistics challenges.
Van der Linde said sectoral growth is projected to stagnate. “Second-quarter economic data releases thus far align with our base case that economic momentum remained sluggish in the second quarter, with the economy forecast to grow by 0.8% in 2025.”
Bongani Motsa, Minerals Council SA senior economist, said continued volatility in global markets emanating from the US tariff regime continue to affect demand for minerals, impacting prices. “In such an environment the gold price should remain well supported. Gold is viewed as a safe-haven investment instrument.”
Most of SA’s mineral exports to the US are exempt from the tariffs, except for diamonds and iron ore.
“The tariffs are likely to increase auto prices in the US, resulting in risking lower total demand. If realised, the decline in demand for autos in the US will likely affect PGMs’ production in the short to medium term via a reduced demand for autocatalytic converters,” Motsa said.
Update July 15 2025
This story has been updated with economists’ comments and more information.
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