Mining production sees modest increase amid mixed commodity trends

Mining production rose by 0.6% month-on-month in April 2025, following a larger increase of 3.6% in March, according to Minerals Council Senior Economist Bongani Motsa.

While coal production grew by 4%, other bulk commodities experienced declines.

Iron ore fell by 2.8%, manganese by 7.5%, and chrome by 4.2%. Base metals also saw significant drops, with nickel down by 23.3% and copper by 16.5%.

Motsa noted that the performance of precious metals was mixed, as gold increased by 9.1% and diamonds by 0.2%, while platinum group metals contracted by 0.4%.

The steep decline in nickel production is likely due to supply outpacing demand, a trend expected to continue throughout 2025.

Nickel in South Africa primarily comes from platinum group metal mines. If production levels in May and June remain consistent with April, a quarter-on-quarter increase of 1.6% in Q2 2025 is anticipated, marking an improvement from the 4.1% decline in Q1 2025.

Year-on-year, total mining production fell by 7.7% in April 2025, marking the fourth consecutive decline. This drop was driven by significant decreases in major commodities, including platinum group metals down by 24.1%, coal by 1.7%, and gold by 2.5%, which together account for over 60% of South Africa’s mining output.

Notable declines were also seen in nickel by 21.9% and copper by 9.5%. However, iron ore, chrome, and diamonds posted year-on-year growth of 5.3%, 2.3%, and 10.1%, respectively.

In the first four months of 2025, production decreased by 5.4% compared to the same period last year. Despite this, nominal mineral sales earnings rose by 0.7% year-on-year in April 2025, largely driven by increased sales values of gold, copper, and manganese.

Total mineral sales reached R68.1 billion in April, up from R62.9 billion the previous month, with gold sales contributing over R7.2 billion to this increase.

Motsa highlighted that commodity prices are mixed in the short term. Precious metals prices are encouraging, with gold prices up 38.1% year-on-year at $3,222 per ounce in April 2025, while platinum saw a slight increase of 1.9% at $1,021 per ounce. In contrast, major commodities like coal, iron ore, and palladium experienced price declines of 16.8%, 10.1%, and 7.1%, respectively.

The impact of US trade policy, particularly the introduction of tariffs on imports, looms large over the sector.

Domestically, Motsa pointed out ongoing challenges affecting the sector’s global competitiveness include double-digit electricity tariff increases, which hinder deep-level mining and local beneficiation, as well as inefficient rail and port logistics.