South Africa’s mining industry is producing less even as the value of the minerals it sells rises sharply, highlighting a striking divergence in one of the country’s most important economic sectors.
Mining production decreased by 4.0% year on year in June 2026, Statistics South Africa said on Thursday, with declines in platinum group metals (PGMs), coal and iron ore driving the fall.
The largest negative contributors were PGMs, which fell 8.4% and contributed 2.4 percentage points to the decline; coal, down 6.6% and contributing 1.7 percentage points; and iron ore, down 10.2% and contributing 1.5 percentage points.
Lara Hodes, Investec economist, said mining production declined by a further 4.0% year on year at the end of the second quarter, from 5.1% in May, weaker than the Bloomberg consensus expectation of a 3.4% decline.
“Mining production declined in June as lower output, primarily of PGMs, coal and iron ore, and occurred alongside elevated mining input costs and a less supportive global demand environment.”
On a seasonally adjusted basis, mining production increased by 0.3% in June compared with May. This followed month-on-month changes of -5.2% in May and 3.0% in April.
The quarterly picture was weaker.
Seasonally adjusted mining production decreased by 2.7% in the second quarter of 2026 compared with the first quarter, with PGMs, manganese ore, gold and iron ore among the largest negative contributors.
Hodes said that, when measured on a quarter-on-quarter seasonally adjusted basis — the measure used to calculate GDP, production was down 2.7% in the second quarter and is likely to have detracted from the quarter’s headline GDP reading.
PGMs, which make up 27.1% of the mining basket, fell 8.4% year on year in June following a 4.3% contraction in May.
Hodes said the decline in coal production reflected weak demand from Eskom amid declining electricity generation and consumption, while the dip in iron ore output was largely owing to persistent rail constraints.
“While there has been notable improvement on the logistics front domestically, it remains a key impediment to optimal export potential.”
Mineral sales tell a different story
While mining volumes declined, the value of mineral sales increased sharply.
Mineral sales at current prices increased by 27.2% year on year in June, with gold, PGMs and chromium ore the largest positive contributors.
Gold sales increased by 125.7%, contributing 17.1 percentage points to the overall increase. PGM sales rose 27.0%, contributing 7.3 percentage points, while chromium ore sales increased 49.0%, contributing 3.7 percentage points.
Seasonally adjusted mineral sales at current prices increased by 2.7% in June compared with May, although they decreased by 1.6% in the second quarter compared with the first quarter.
The contrast between production and sales means that higher commodity prices are supporting the value of South Africa’s mineral sales even as physical production remains under pressure.
Hodes said some cost pressures eased modestly during the month, but ongoing uncertainty around global growth and trade continued to weigh on the sector.
“Indeed, the energy-intensive mining sector has faced increased input costs as a result of the war in the Middle East.”
The Mining Composite Input (MCI) Cost Index, published by the Minerals Council SA, grew by 4.8% year on year in June. Although this was a moderation from May’s reading, Hodes said it remained notably above pre-war levels, placing pressure on profits.
PGMs, coal and iron ore drag on output
Hodes said PGMs, coal and iron ore detracted 2.4%, 1.7% and 1.5% respectively from the topline reading.
She said that demand for chromium and manganese ore had been supported by stockpiling in China, with consumers seeking to secure supply amid heightened global supply uncertainty.
Chromium and manganese ore production added a combined 1.4 percentage points to the headline outcome.
But those gains were not enough to offset the declines in PGMs, coal and iron ore.
The latest figures matter for the wider economy because mining production feeds into South Africa’s GDP performance, while the sector is also an important source of mineral exports.
With mining production down 2.7% in the second quarter, Hodes said the sector was likely to have detracted from the quarter’s headline GDP reading.
The June figures therefore leave South Africa with a mixed picture: the value of mineral sales has risen sharply, led by gold and other commodities, while the physical volume of mining production remains under pressure from weaker output, elevated input costs and infrastructure constraints.
For an economy seeking stronger growth, the distinction is important: higher commodity prices can increase the value of what South Africa sells, but weaker production means the mining sector is contributing less to economic activity than the headline rise in mineral sales might suggest.
yogashen.pillay@nationalmg.co.za
THE NATIONAL