Tariffs And Weak Demand Cast Shadow Over South African Mining Prospects For 2025

Image credit: Maksim Romashkin on Pexels

“The United States tariffs continue to be the elephant in the room, and it is increasingly used as a foreign policy instrument. Thus far, based on exemptions published by the White House in April, South African iron ore and diamond exports to the US will be directly affected by current tariffs,” said the Minerals Council South Africa in a statement.

“The tariffs imposed by the US on key South African trading partners – including China, the European Union, and India – along with any retaliatory measures they may adopt, will largely influence the demand for South African mineral exports,” it added.

Production figures

In terms of the individual commodities, coal production (m-o-m, +3.4%), manganese (+3.2%), chrome (+2.4%), diamonds (+1.1%), as well as the platinum group metals (PGMs) (+3.5%) all saw increases compared to May.

A decline in production was registered in nickel (-5.9%), copper (-14.3%), iron ore (-9.9%), and gold (-2.5%).

On a quarter-on-quarter (q-o-q) basis, mining production is expected to increase by 3.9% in Q2 2025, reflecting a notable improvement in output over the previous quarter.

Of course, this is mainly a base effect, noting that in Q1 2025, mining production contracted by 4.1%.

Year-on-year (y-o-y) total mining production increased by 2.4% in June 2025. Accounting for the increase in production were PGMs (+3%), coal (+3.7%), gold (+3.1%), chrome (+9%), diamonds (+3.7%) and nickel (+14.5%).

A drop in production was observed in copper (-33.7%), iron ore (-1.7%) and manganese (-7.7%).

In the first half of 2025, year-to-date mining production declined by 3% compared to the same period in the previous year.

Unless there is a significant improvement in operating conditions and a strong recovery in commodity prices that boosts production by a significant margin, the sector’s production growth outlook for the 2025 calendar year remains weak and unpromising.

Sales figures

Total mineral sales dropped to R67.3bn in June 2025 from R76.8bn the previous month, representing a 12.4% decline.

On a y-o-y basis, total mineral sales declined by 14.4% with gold minerals sales leading the decline, with a drop in sales of 53.7% to R9.2bn.

This was a surprise considering that on a year-over-year basis, the gold price was 44% higher in June 2025 compared to 12 months prior.

The mineral sales performance (y-o-y) of the major commodities were as follows: PGM (+23.4% to R18.4bn in June), iron ore (+0.7% to R7bn), gold (-53.7% to R9.2bn), nickel (-36.4% to R785m), manganese (-33.7% to R4.2bn), copper (-31.7% to R566.7m), chrome (-13.9% to R5.1bn), and coal (-5.5% to R16.6bn).