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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
October 10, 2024

Mining Production and Sales

August 2024

Mining South Africa rose by 0.3% in August 2024, led by increases in manganese, PGMs, and chromium ore. However, declines in iron ore and gold production tempered the growth. Mineral sales fell by 9.9% annually, driven by a sharp drop in gold sales. The sector remains crucial for the economy, employing around 457,000 people.

Mining production in South Africa increased by 0.3% in August 2024 after a contraction in July. The primary contributors to this growth were significant increases in specific sectors: manganese mining rose 16.0% annually, contributing 1.2 percentage points to overall growth; Platinum Group Metals (PGMs) increased by 4.7%, adding another 1.2 percentage points; and chromium ore production grew by 24.8%, contributing 1.1 percentage points.

However, these gains were tempered by declines in other areas. Iron ore production contracted by 15.2%, detracting 2.1 percentage points, while gold mining fell by 4.6%, further reducing growth by 0.7 percentage points. Seasonally adjusted, mining production expanded by 2.9% from July to August 2024.

Mineral sales showed a 9.9% annual decline in August 2024, following a growth of 25.4% in July. The most significant drop was in gold sales, which plummeted by 80.5%, reducing total mineral sales value by 13.9 percentage points. Additionally, non-metallic minerals saw a 38.3% contraction, subtracting 2.3 percentage points, and PGMs decreased by 5.4%, contributing another 1.5 percentage points to the decline.

Despite these declines, some categories experienced increased sales. Manganese ore sales surged by 65.1%, boosting overall performance by 3.6 percentage points. Chromium ore sales grew by 28.2%, adding 2.1 percentage points, and coal sales increased by 5.9%, contributing 1.5 percentage points to the total sales volume.

The mining sector remains essential to the South African economy, serving as a key driver for foreign exchange and employing approximately 457,000 people directly, not including those in related industries. The sector faced severe challenges from late 2022 to 2023 due to electricity supply constraints and infrastructure bottlenecks, particularly at ports. However, production volumes have increased in early 2024 as the sector rebounds from a low base, bolstered by improved economic confidence following the general election and enhanced electricity availability.

Looking ahead, it appears that mining production may stabilize at current levels, as companies adopt a cautious wait-and-see approach regarding the government’s announced market reforms. Mining firms remain optimistically vigilant about consistent electricity supply and the resolution of infrastructure issues in the medium term, as promised by the Government of National Unity.

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