The US midterm elections saw the Democrats win the Senate and the House, taking control of Congress for the rest of Donald Trump’s presidency.
Interest rates are the second channel through which the midterms could affect mining input costs.
While the rand-US dollar exchange rate has remained stable since the elections, changes in US interest rates may influence it.
Rand depreciation would increase the local-currency cost of imported fuel, machinery and other inputs, while appreciation could provide cost relief but reduce the rand value of dollar-denominated export receipts.
Another issue is the US placing South Africa on notice that it will be excluded from the African Growth and Opportunity Act (Agoa) as of January 2027.
Agoa gives eligible sub-Saharan African countries preferential and largely duty-free access to the US market for thousands of products.
Exports from South Africa that would be affected include motor vehicles and automotive components, citrus and other agricultural products.
Raw minerals and metals exports will not be affected by the exclusion, as they generally do not rely on Agoa to access the US market.
The MCSA’s mining composite input (MCI) cost index rose 4.9% year-on-year (y-o-y) in September 2026, up from 3.7% in August.
The 1.2 percentage-point acceleration suggests renewed pressure on mining operating costs after the previous month’s moderation.
For producers, this implies a more demanding cost environment.
Given that the mining sector is predominantly a price-taker, this will inevitably squeeze profit margins and, among other things, reduce corporate income tax.
Costs in the coke and refined petroleum category rose on both a month-on-month (m-o-m) basis (8.6%) and a y-o-y basis (32.9%) in September, reversing the modest monthly decline recorded in August.
Coke and refined petroleum accounts for 5.51% of total mining input costs, so its sharp increase carries material weight in the composite index. In contrast, other chemicals (0.28%) and basic chemicals (2.30%) have a smaller influence.
Other chemicals and artificial fibres also exhibited pronounced cost pressure.
Taken together, these movements point to renewed inflation in key operating inputs.
However, a category’s price increase should not be confused with its contribution to the composite index: that contribution also depends on its weight in the mining input basket.
The economic concern is that fuel pressures could spread beyond direct purchases to suppliers’ transport and delivery charges.
For mining operations, this creates a risk of both immediate expenditure increases and subsequent cost-push increases as contracts are repriced.
The effect on profitability will depend on each operation’s input mix, procurement arrangements and ability to offset higher costs through productivity gains or stronger realised selling prices.
Annual input cost increases were at least 4% across all commodity groups covered in the brief.
Other mining and quarrying industries, coal and gold, recorded increases above the sector average of 4.9%.
Iron ore and manganese were 0.5 percentage points below the aggregate rate, while other metallic minerals and chrome were 0.4 percentage points below it.
These relatively narrow gaps suggest that cost inflation is a sector-wide challenge rather than a problem confined to a small number of commodities.
Commodity-level cost inflation nevertheless does not establish which producers face the greatest financial strain.
Margin outcomes also depend on output prices, production volumes and operating efficiency.
September’s acceleration in mining input cost inflation highlights renewed pressure on operating margins, with petroleum and chemicals among the main concerns and annual increases across commodity groups.
The principal risks are further fuel-cost pass-through, exchange-rate volatility and persistent uncertainty over international trade and energy supply.
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