China and India’s growth to boost demand for commodities as logistics bottlenecks affect coal and iron

Economic growth prospects in China and India is expected to boost demand for South African commodity exports this year although resurgent logistical constraints impacted coal and iron ore in November, with the Minerals Council calling for the government to speedily transport infrastructure for bulk commodities.

South Africa’s mining production fell in November 2025 by 2.7% on a year-on-year basis after six consecutive months of year-on-year growth, dragged down by steep drops in coal, iron ore, gold, and platinum group metals (PGMs).

However, Bongani Motsa, an economist with the Minerals Council of SA, said this production drop for the month of November was not due to weak demand for shipments from South Africa. Demand for minerals exported from South Africa is likely to remain stronger inspite of geopolitical upheavals sparked off by United States President Donald Trump’s tariff and trade wars with other global players.

Growth prospects in other international economic hubs such as China and India were set to play a key role for South Africa’s mineral export and production dynamics.

“Real economic growth in key export markets such as China and India will help sustain demand for South Africa’s minerals and metals exports,” said Motsa.

China had notched up a 5% growth in 2025 while India is expected to grow by 7.5%. Further economic upswings, albeit on a moderate and modest note, has also been forecast for the two economic powerhouses that have exhibited strong appetite for mineral and related products.

But to fully benefit from these growth prospects and from uptake from traditional hotspot markets such as Europe and the United States, South Africa has to fix its logistics sector to enable miners of bulk commodities such as coal and iron ore to move stock for export.

“The November 2025 decline in total mining production was not to the result of a broad collapse in commodity demand but rather stemmed from logistical constraints especially for coal and iron ore and sector-specific structural weaknesses in gold. For policymakers,(this) underscores the urgency of fixing transport infrastructure for bulk Commodities,” explained Motsa.

In December, the Minerals Council said an upward trend in intermediate input costs for South African miners was emerging, even though overall input costs remain historically subdued. The emerging trend of rising mining input costs had been driven by “higher prices for intermediate mining inputs, including iron ore—which is performing stronger” especially for the month of October compared to the same month a year earlier.

“These increases are putting pressure on costs where these and other minerals are used in intermediate processes. Additionally, there has been a notable rise in sawmilling and wood costs, electricity and water tariffs, and significant increases in road transportation costs,” said the Minerals Council.

These factors, it explained, were collectively driving the upward trend in mining input costs that has been recorded over the past three months. Although electricity supply from Eskom has improved, the South African mining industry has been reeling under high costs of energy, with smelters shutting down.

The industry also expects the Government of National Unity to speedily fix port and rail bottlenecks that could contribute to stockpiles at mines. With prices of some commodities currently elevated, South Africa could benefit from higher earnings potential if miners can move large volumes for export.

BUSINESS REPORT