According to data released by Statistics South Africa (StatsSA), mining production increased by 2.5% year-on-year in March, slower than February’s revised 9.7% surge and below market forecasts of a 4.1% rise.
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South Africa’s mining sector lost momentum in March as production growth came in below market expectations, highlighting growing pressure on the industry from weaker global demand, rising input costs and persistent operational challenges.
According to data released by Statistics South Africa (StatsSA), mining production increased by 2.5% year-on-year in March, slower than February’s revised 9.7% surge and below market forecasts of a 4.1% rise.
The latest reading marked the weakest expansion in four months and reflected softer activity across several key mineral categories, including platinum group metals (PGMs), manganese ore and nickel.
Jean-Pierre Terblanche, principal service statistician at StatsSA, said the latest figures conclude mining performance for the first quarter of the year, which showed only modest growth overall.
“Mining production increased by 0.6% in the first quarter of 2026 compared with the fourth quarter of 2025. Platinum group metals was the largest positive contributor, growing by 8.5% and contributing 2.3 percentage points to overall growth,” Terblanche said.
He added that the mining industry also recorded higher output for diamonds, gold and chromium ore during the quarter, while production declined for manganese ore, coal, iron ore, nickel and copper.
On a monthly basis, seasonally adjusted mining production fell sharply by 5.1% in March after rising by a revised 3% in February.
Despite the slowdown, PGMs remained the largest contributor to annual growth in March, increasing by 10.5% year-on-year, although this was significantly lower than February’s 52.3% increase.
Gold production also strengthened, rising 17.1% in March after increasing 12.8% in February.
Investec economist Lara Hodes said the gains in PGMs and gold were heavily influenced by favourable base effects following production disruptions recorded in early 2025.
“The increase was not broad based however and was largely underpinned by PGMs and gold, which contributed 2.6% and 1.6% respectively, to the topline reading,” Hodes said.
She noted that PGMs, which account for more than a quarter of South Africa’s mining basket, benefited from comparisons with last year’s weather-related production disruptions.
“Gold production grew by 17.1% year-on-year in March, following a 12.8% year-on-year increase in February. Base effects also played a part with notable contractions recorded in February and March last year,” Hodes added.
While gold prices have eased from peaks reached earlier in the year, they remain historically elevated amid global geopolitical tensions.
According to the World Bank Group, gold prices rose by 17% quarter-on-quarter during the first quarter of 2026 as investors sought safe-haven assets amid escalating global uncertainty.
However, Hodes warned that the broader outlook for mining remains fragile as geopolitical instability and slowing global trade threaten commodity demand.
She said ongoing conflict in the Middle East could significantly impact global economic growth and mining profitability.
“The trajectory of global growth in the near-term remains uncertain due to the ongoing war in the Middle East and could accordingly weigh heavily on demand for a number of commodities,” she said.
She pointed to slowing global manufacturing activity, noting that the March JPMorgan Chase Global Manufacturing PMI showed weaker output and slowing new orders as international trade flows stagnated.
At the same time, she said mining companies are facing rising operational costs linked to global supply chain disruptions and higher energy prices.
Hodes said the Minerals Council South Africa Mining Composite Input Cost Index climbed sharply to 2.3% year-on-year in March from 1.2% in February.
“These trends did not reverse in April and remain evident in May, as the conflict in Iran and the disruptions to shipping and oil supplies through the Strait of Hormuz continue,” the Minerals Council warned.
Hodes added that miners remain under pressure from domestic constraints including failing water infrastructure, logistics bottlenecks and ongoing policy uncertainty.
“Depending on the length and severity of the war, profitability of miners could remain under notable pressure, while they continue to contend with domestic specific challenges,” she said.
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