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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
June 13, 2025

Mining Production and Sales

April 2025

In April 2025, mining activities in South Africa experienced a 7.7% decline, following a revised 2.5% decrease in March 2025.

Key factors contributing to this downturn include:

  • Platinum Group Metals (PGMs): Down 24.1%, contributing to a 8.0 percentage point decline.
  • Gold: Decreased by 2.5%, adding a further 0.3 percentage point to the overall decline and
  • Coal: Contracting by 1.7% and subtracting a further 0.3 percentage point from total mining activity within South Africa.

However, iron ore production increased by 5.3% and added 0.7 percentage points in April 2025, partially offsetting the overall decline in mining activity.
Mining sales rose by 0.7% in April due to increases in key areas:

  • Manganese ore: Up 6.0%, contributing a 1.6 percentage point increase.
  • Gold: Rose by 56.6%, contributing an additional 9.4 percentage points.

Despite these increases, Platinum Group Metals (PGMs) sales, the largest negative sector, decreased by 20.1%, providing a 4.7 percentage point offset against the gains in other categories followed by Iron Ore sales that decreased by 25.9% and subtracted 3.5 percentage points from overall growth in mining sales.

The mining sector is crucial to South Africa’s economy, providing foreign exchange and directly employing approximately 431,000 people, according to StatsSA labour statistics. Nonetheless, there are significant challenges ahead, particularly concerning the potential closure of ArcelorMittal South Africa (AMSA) as seen in sales of iron ore that decrease notably during April 2025. The government is still battling to prevent AMSA’s exit from the market due to rising production costs and infrastructure issues, especially in ports and railways. Prompt action is essential to ensure AMSA’s continued presence in the mining and steel industry, amid concerns about access to the US market.

Globally, ongoing geopolitical tensions between the US and China, alongside their trade conflicts and tariff wars, have unsettled markets, reducing international trade. Fortunately, high tariffs have been temporarily reduced for 90 days following a “constructive but tense” trade meeting between the US and China regarding market access. The reduced tariffs announced by the Trump administration is set to expire by the 9th of July and trade deals with the US will have to be finalised before that to ensure reduced tariffs rates and access to the US market going forward. This development might positively influence production and sales volumes worldwide for both mining and manufactured goods if trade deals are finalised and agreed upon.

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More Coverage

Producer Price Inflation

October 2025
In October 2025, producer price inflation rose to 2.9%, an increase from 2.3% in September. However, on a monthly basis, there was a slight decline in producer prices, down by 0.1%.

Retail Sales Performance

September 2025
Retail sales in South Africa rose by 3.1% in September, slightly exceeding market expectations of 3.0%, as anticipated by analysts for that month. This growth indicates a continuing recovery in consumer demand within the economy.

SARB Lowers Interest Rates as Stability Improves

The South African Reserve Bank (SARB) has taken a prudent and measured step by reducing its base interest rate from 7.0% to 6.75%, marking a significant moment in the country’s monetary policy trajectory. This decision, made by the Monetary Policy Committee (MPC), underscores the bank’s cautious optimism about South Africa’s economic outlook amidst a complex global backdrop.

Consumer Inflation

October 2025
In September 2025, the Consumer Price Index (CPI) saw a modest rise to 3.4%, slightly up from 3.3% in August, yet just below the analysts’ forecast of 3.5%.

Why Aluma does not Force an Interest Cut

Cautious Optimism Amidst Inflation and Reform Momentum
As the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) prepares to announce its interest rate decision later this week, market watchers are closely divided between expectations of a modest cut and maintaining the status quo. With approximately 70% of economists foreseeing a 25-basis point reduction from 7.00% to 6.75%, the prevailing sentiment reflects confidence in economic stabilization. However, a significant proportion remain cautious, suggesting that the SARB may choose to hold interest rates unchanged for another month, given the current inflation trajectory and recent developments in fiscal discipline.
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