South Africa’s mining sector is preparing for a tough year ahead, as recent data reveals an unexpected slump in productivity towards the end of 2024.
According to Statistics South Africa (Stats SA), mining production declined by 2.4% year-on-year in December, following a 0.9% drop in November. The decline was driven by weaker platinum group metals (PGMs) and gold output, which saw significant contractions.
Stats SA principal service statistician Jean-Pierre Terblanche confirmed that PGMs and gold were the biggest contributors to the decline. Meanwhile, seasonally adjusted mining production for Q4 2024 was down 0.3% compared to Q3, mainly due to weak manganese ore and iron ore output.
Despite mining output increasing by 0.4% for the 2024 calendar year, the weak end to the year means the sector will negatively impact South Africa’s Q4 real GDP.
Minerals Council Chief Economist Hugo Pienaar described December’s production figures as disappointing, noting that the mining industry’s hopes for a stronger 2025 hinge on improved electricity supply, efficient rail and port logistics, better water provision, and local government performance.
South Africa’s Palladium, Rhodium, and Platinum production suffered a 7.1% year-on-year decline in December, yet PGM output for the full year rose by 1.4%, marking an improvement from 1.1% in 2023, according to FNB senior economist Thanda Sithole.
Despite elevated gold prices, gold output fell by 8.4% year-on-year, reflecting high operational costs, ageing mines, and declining ore grades.
Coal production, however, showed a positive turnaround, growing 2.5% year-on-year in December after a 1.6% decline in November. Seasonally adjusted coal output also rose by 2.9% month-on-month, continuing a steady recovery from 2.4% growth in November.
Manganese ore production saw a significant 8.7% increase, compared to 1.6% growth in November, while iron ore output grew by a modest 1.1% year-on-year, recovering from a 4.4% drop in November.
However, iron ore production plummeted by 16.0% month-on-month, with Kumba Iron Ore citing ongoing logistics issues as a major hurdle.
While the absence of load-shedding and improved freight rail logistics could aid recovery, global economic uncertainty, subdued commodity prices, and China’s slowing growth present significant risks for the mining industry.
Sithole warned that the fragile global trade environment and inflation concerns could further dampen South Africa’s mining recovery efforts.
