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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
March 27, 2025

Mining Production and Sales

January 2025

In January 2025, mining activities in South Africa experienced a 2.7% decline, following a 2.4% decrease in December.

The primary factors contributing to this downturn included:

  • Platinum Group Metals (PGMs): down 3.8%, which accounted for a decline of 1.1 percentage points.
  • Coal: decreased by 4.4%, contributing a further 1.0 percentage point to the overall drop.
  • Iron Ore: contracted by 15.1%, which added 2.7 percentage points to the decrease in mining production.

On a positive note, manganese ore production rose by 21.2%, adding 1.2 percentage points to growth and helping to mitigate some of the overall decline recorded in January 2025.

On an annual basis, mineral sales fell by 5.9% in January 2025, following a 9.4% contraction in December. Significant decreases in sales included:

  • Chromium Ore: down by 26.8%, contributing -1.7 percentage points.
  • Gold: decreased by 21.1%, accounting for -5.8 percentage points.

The most significant contributor to mining sales growth for January 2025 was coal, which saw a 14.2% increase, adding 3.1 percentage points to offset the lower sales in other mining categories.

The mining sector is crucial to South Africa’s economy, generating foreign exchange and directly employing approximately 484,000 individuals, according to StatsSA. However, the recent news regarding the potential closure of ArcelorMittal (AMSA) poses challenges for iron ore production and sales in the South African market. The government is working to intervene and prevent such a key player from exiting the market due to rising production costs and infrastructure bottlenecks, including port and rail challenges that have worsened cost issues. Timely and urgent action is required to ensure AMSA continues to operate within the mining and steel industry.

As of early 2025, plans for the closure of ArcelorMittal have been paused due to ongoing government negotiations. The government is committed to “keeping the doors open,” recognising that such a closure would be detrimental to South Africa at this critical juncture.

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