In August 2025, South Africa’s mining production fell by 1.2% on a seasonally adjusted, month-on-month basis. The decline was mainly driven by lower output in key minerals such as iron ore and gold, which outweighed notable increases in copper and nickel production.
According to the Minerals Council South Africa, the month’s downturn was largely attributed to reduced production in several major commodities, including gold (-3.6%), iron ore (-5%), chrome (-2.3%), manganese (-2.1%), platinum group metals (PGMs) (-1%), and diamonds (-6.1%). Collectively, these minerals represent 70.6% of the country’s mining production portfolio, underlining their significant influence on overall sector performance.
This drop follows a 1.2% rise in July and highlights the mining industry’s continued vulnerability to fluctuations in global commodity prices and operational challenges. Interestingly, the decline occurred even as input costs remained relatively steady during the period – suggesting that the primary pressures were more operational and market-driven rather than cost-related.
On the upside, copper, nickel, and coal saw month-on-month production increases of 24.7%, 13.8%, and 2.7%, respectively. However, these gains – representing a combined 23.6% of the mining production basket – were insufficient to offset the broader sector decline.
Looking at year-on-year performance, total mining output slipped by 0.2% in August. The contraction was primarily due to a sharp 21.7% drop in PGM production. Gold output also decreased by 3.6% compared to the same period last year, marking a second straight monthly decline, driven by rising operational expenses and regulatory pressures – despite a 36.4% surge in gold prices to an average of $3,387 per ounce.
Further y-o-y declines in manganese (-3.4%), nickel (-21.7%), copper (-19.7%), and chrome (-1.6%) added to the sector’s overall weakness. These reductions occurred even as mining cost inflation remained subdued, with overall costs – labour included – rising just 1.3% in August compared to the previous year.
The Council said the mixed performance underscores the sector’s vulnerability to commodity-specific dynamics and global economic uncertainty. And while input costs remain low on average, electricity, water and labour costs continue to exert pressure on the sector.
Acting Chief Economist Bongani Motsa said while South Africa possesses a comparative advantage in mineral endowment, this does not automatically translate into competitive advantage – an outcome largely shaped by government policy. It is the government that enacts investment-friendly policies and is responsible for creating an enabling environment.
“Developing efficient, affordable, world-class infrastructure is also central to converting comparative advantage into competitive strength. The latter is not innate – it must be created,” he said.
