South Africa’s mining output slumps 12.7% as rising costs add to industry pressures

South Africa's mining industry has experienced a significant 12.7% year-on-year decline in production in August, following a revised 7.0% slump in July. The decline was largely driven by a 6.1% drop in platinum group metals (PGMs), as well as 3% and 2.4% reductions in coal and iron ore production, respectively. In contrast, chromium and manganese contributed positively to the overall outcome, with their combined increase of 0.9% outperforming other bulk commodities hampered by logistical difficulties and reduced global demand.

Energy-intensive mining continues to face challenges due to rising input costs stemming from the war in the Middle East, which has led to a sharp increase in fuel prices throughout the year. This resulted in the Mining Composite Input Cost Index (MCI) rising by 3.7% year-on-year in August, slightly down from the July reading of 3.8%.

Other domestic issues include logistical bottlenecks, poor infrastructure, and the exorbitant cost of electricity, which has surged by approximately 1,185% between 2003 and 2025. The Minerals Council South Africa noted that few businesses, especially energy-intensive industries like smelters, can endure such substantial cost hikes while remaining globally competitive.

However, mining has been recognized as one of three key economic sectors in the Government-Business Partnership's third phase.