Skip to main content
Invest Now
012 012 5270
Copyright © Aluma Capital (Pty) Ltd. All rights reserved.
Aluma Capital (Pty) Ltd is a registered Financial Services Provider (FSP 46449) in terms of The Financial Advisory and Intermediary Services Act (37 of 2002)
Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
March 27, 2025

Mining Production and Sales

January 2025

In January 2025, mining activities in South Africa experienced a 2.7% decline, following a 2.4% decrease in December.

The primary factors contributing to this downturn included:

  • Platinum Group Metals (PGMs): down 3.8%, which accounted for a decline of 1.1 percentage points.
  • Coal: decreased by 4.4%, contributing a further 1.0 percentage point to the overall drop.
  • Iron Ore: contracted by 15.1%, which added 2.7 percentage points to the decrease in mining production.

On a positive note, manganese ore production rose by 21.2%, adding 1.2 percentage points to growth and helping to mitigate some of the overall decline recorded in January 2025.

On an annual basis, mineral sales fell by 5.9% in January 2025, following a 9.4% contraction in December. Significant decreases in sales included:

  • Chromium Ore: down by 26.8%, contributing -1.7 percentage points.
  • Gold: decreased by 21.1%, accounting for -5.8 percentage points.

The most significant contributor to mining sales growth for January 2025 was coal, which saw a 14.2% increase, adding 3.1 percentage points to offset the lower sales in other mining categories.

The mining sector is crucial to South Africa’s economy, generating foreign exchange and directly employing approximately 484,000 individuals, according to StatsSA. However, the recent news regarding the potential closure of ArcelorMittal (AMSA) poses challenges for iron ore production and sales in the South African market. The government is working to intervene and prevent such a key player from exiting the market due to rising production costs and infrastructure bottlenecks, including port and rail challenges that have worsened cost issues. Timely and urgent action is required to ensure AMSA continues to operate within the mining and steel industry.

As of early 2025, plans for the closure of ArcelorMittal have been paused due to ongoing government negotiations. The government is committed to “keeping the doors open,” recognising that such a closure would be detrimental to South Africa at this critical juncture.

Back to News

More Coverage

The Fuel Shock Dilemma: Why the SARB’s Inflation Medicine May Hurt a Fragile Economy

For South African businesses and households already managing a tight financial squeeze, the South African Reserve Bank’s (SARB) recent decision to hike the repo rate to 7.0% felt less like economic medicine and more like a handbrake. While central banks traditionally raise interest rates to cool down an overheating economy, South Africa’s current reality is vastly different. Our recent inflation spike isn’t driven by a wild shopping spree, but by global supply shocks and an imported energy crisis. This begs the crucial question: is the SARB using the wrong tool for the job, and at what cost to our fragile economic growth?

The Core Dilemma: Demand vs. Supply and Interest Rates

The case for holding interest rates is strong, as South Africa’s current inflation is being driven by global supply-side pressures like fuel prices, not excessive local spending. Raising rates now would place additional strain on already struggling consumers and businesses without addressing the real cause of inflation. With the Rand strengthening, oil prices stabilising, and diesel costs expected to decline, natural inflation relief is already emerging. Since inflation remains within the SARB’s target range, increasing borrowing costs could unnecessarily slow economic growth and job creation.

A view on Demand in the Economy: Retail Sales performance – March 2026 Data

Amid a turbulent economic backdrop, South Africa’s retail sales surged by an unexpected 2.6% in March 2026, outpacing forecasts and signalling a fragile yet persistent recovery in the consumer market. While interest rate cuts have bolstered household spending, challenges such as rising inflation, potential interest rate hikes, and geopolitical tensions loom large. Despite these hurdles, sectors like “other retailers” and general dealers have notably contributed to this growth spurt, raising questions about the sustainability of this recovery. With business and consumer confidence indices displaying mixed signals, the future of South Africa’s retail strength hinges on international relations, fuel costs, and policy decisions. Explore the dynamics and implications of these developments in our detailed report.

Consumer Inflation Rate – 2026

In an insightful analysis of South Africa’s economic landscape in April 2026, the report delves into the notable 4.0% year-on-year increase in the Consumer Price Index, accentuated by surging costs in housing, utilities, transport, and financial services. Amid rising inflationary pressures fuelled by global uncertainties, including the Middle East conflict and climbing oil prices, the South African Reserve Bank faces critical decisions on interest rates to balance inflation and economic growth. As households grapple with diminished purchasing power, the precarity of reliance on short-term credit looms large, while international factors such as US-imposed tariffs and potential BRICS trade tensions threaten market stability. The report provides a comprehensive look at the delicate dance South Africa must perform to maintain price stability and safeguard the Rand amidst a challenging global backdrop.

The SARB’s High-Stakes Tightrope: Balancing an Inflation Breach Against a Jobless Crisis

Next week’s SARB decision could define South Africa’s economic trajectory: facing an external oil shock and runaway electricity tariffs that threaten to push April inflation past the central bank’s 4.0% ceiling, policymakers must weigh a technical inflation breach against a staggering surge in unemployment and collapsing investment, a choice between credibility and survival. With joblessness spiking and GDP growth stagnant, aggressive rate hikes would risk choking off the private investment the country urgently needs, while inaction could dent the new inflation-targeting framework. Read the full report for a detailed breakdown of the shocks driving this dilemma, the likely “hold” outcome from the May 28 MPC meeting, and what it means for businesses, households, and markets.