Mining production sees 3.7% boost in May 2025

Image credit: Marjan Taghipour on Pexels

This follows a flat performance in April. Five of the nine major mineral segments registered production increases, with nickel surging by 55.6%, followed by the PGMs (+10.1%), iron ore (+6.6%), diamonds (+3.9%) and chrome (+2.9%).

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Increasing output

The surge in nickel production is a result of an increase in output in one of the five major mines. The increase in PGMs output in May is more a base effect, following production disruptions in April.

The other four major sub-sectors recorded the following declines in production: copper (-5.9%), coal (-2.6%), gold (-0.2%) and manganese (-0.2%).

The positive overall mining growth performance in May bodes well for the quarterly production of the mining sector.

Compared to Q1 2025, which contracted by 4%, Q2 production looks set to increase by more than 3%, resulting in a positive contribution by the sector to overall real GDP performance.

Total mining production

Year-on-year, total mining production increased slightly by 0.2%. This breaks a streak of six months where annual mining production declined. Six of the major industries recorded increases in May.

These include gold (+1.5%), iron ore (+12.5%), chrome (+3.7%), nickel (+19.1%), and diamonds (+7.7%). Together, these sub-sectors represent just under 36% of total mining production.

Compared to 12 months ago, production contracted for manganese (-13%), coal (-4.6%), and the PGMs (-0.6%). Year-to-date (January to May 2025), production was down by 4.2% compared to the same period last year.

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Earnings

Minerals sales earnings (measured in current prices) soared by 18.8% in May compared to 12 months ago. Leading the surge was gold sales, which increased by a mammoth 338.7%. This is explained by a 40% increase in the gold price when compared to a year ago.

There were also increases in chrome (5.2%), copper (+10.8%) and nickel (+70.2%). Declines in minerals sales year-on-year were recorded in the iron ore (-10.5%), manganese (-9.1%), PGMs (- 15.6%), and coal (-4.2%) sub-sectors.

There was a slight increase of 1.1% in total minerals sales – R321bn in 2025 compared to R317bn (2024). Month-on-month (April to May 2025), gold sales increased by almost R4bn, the biggest increase by far of all the sub-sectors.

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Gold is the safe haven

Continued volatility in global markets resulting from the US tariff regime continues to affect demand for minerals, impacting prices.

In such an environment, the gold price should remain well supported as gold is viewed as a safe haven investment instrument.

Most of South Africa’s mineral exports to the US are currently exempt from the tariffs, except for diamonds and iron ore. The tariffs are likely to increase auto prices in the US, which could result in lower total demand.

If realised, the decline in demand for autos in the US will likely affect PGMs production in the short- to medium-term via a reduced demand for autocatalytic converters.