South Africa’s mining industry recorded a surge in output in February as tight platinum group metal (PGM) markets and record gold prices fuel optimism in the sector.
Mining production during the month was 9.7% higher than February last year, outperforming economists’ forecasts by more than two percentage points.
The main driver was PGM output, which jumped by more than 50% year on year, according to Statistics South Africa’s latest data published on Tuesday.
Production in the PGM sector has been buoyed by a wave of optimism around platinum prices, which soared more than 130% in 2025 after years of subdued demand.
Added to this are base effects, with flooding in Limpopo having significantly dented major PGM operations such as Valterra Platinum’s Amandelbult mine in February last year.
Chromium ore, often extracted in tandem with PGMs in South Africa’s Bushveld Igneous Complex, added to the headline production increase, with production up nearly 30% year on year.
Further support came from manganese production (up 17.8%) and gold (up 12.8%).
The surge in South Africa’s mining production comes as geopolitical uncertainty continues to buoy precious metal prices, spurring hopes mining profits will continue to support the fiscus.
The National Treasury’s latest budget review showed tax collections from the local mining sector rose 29% in 2025 on record gold and PGM prices — providing much-needed funding for the country’s debt stabilisation ambitions.
According to Statistics South Africa’s data, sales from the mining sector jumped by nearly 60% (58.3%) in February, putting the industry on track for a lucrative first quarter.
Gold sales were up nearly fivefold, contributing around a third of the increase, while PGM sales shot up by 132%, adding another 26 percentage points. Sales of chromium ore were also up more than 50% year on year.
A gradual easing of input cost inflation also put miners in good stead in February, with the Minerals Council South Africa’s composite cost index contracting from 1.6% to 1.2% year on year in the first two months of 2026.
Notably, however, February’s data does not reflect the full impact of the recent increase in local fuel prices brought on by the Iran war.
The energy shock which began in March and continues to keep oil prices above $100 a barrel could put pressure on miners’ costs in the coming months, threatening to offset price headwinds.
Investec economist Lara Hodes said input costs are likely to have risen notably in March and April, weighing on profitability and operational effectiveness.
“The trajectory of global growth in the near term remains uncertain and could accordingly weigh heavily on demand for a number of commodities,” she said.
In a note, FNB senior economist Thanda Sithole said volatile commodity prices and heightened global uncertainty in the wake of the war have clouded the mining sector’s outlook heading into 2026.
“Prior to the escalation in Middle East tensions, we expected mining activity to accelerate modestly this year, supported by prevailing commodity prices, but prices have since become more volatile amid heightened global uncertainty.
“Easing domestic energy and logistics constraints should provide support to mining sector activity over the medium term,” he said.
• This article has been updated with new information.
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