South Africa’s gold and coal sectors were the only sectors to post decreases in production for September and the situation is unlikely to turn around markedly in the near term.

Statistics South Africa (Stats SA) this week reported that the South African mining industry’s production had increased by 4.7% year-on-year in September, but that coal production had decreased by 4.4% and gold production by 3.7%.

The Minerals Council South Africa points out that coal production has been affected by the sustained inefficiencies at Transnet’s port and rail operations. 

It adds that the coal sector is faced with diverging trends. State-owned power utility Eskom’s plant performance expected to boost the demand for coal. However, rail and port problems continue to hamper exports, especially at current prices that make trucking coal less viable, the Minerals Council explains.

It notes that coal prices have remained at about $105/t since January.

Meanwhile, the gold price increased 34% year-on-year to $2 571/oz in September, the organisation says, adding that the gold price is likely to remain buoyant in the short to medium term.

Domestic gold production is, nevertheless, on a structural decline.

The council notes that, according to real mining production and nominal sales data released by Stats SA, South Africa’s mining production, overall, remains lower than pre-Covid-19 levels, mainly because of declining gold production, however, sales earnings continue to perform well.

It expects total mining production for this year to increase by 0.5% to 1%.

Looking ahead to 2025, Donald Trump’s re-election as US President is expected to result in its economy being more inward-looking than that of the Biden administration.

While early days, this could have adverse implications for global trade and GDP growth, the Minerals Council posits.

In the medium term, Trump’s re-election is expected to negatively affect China’s exports of manufactured goods.

Iron-ore is an input into steel manufacturing and most of China’s goods exports use steel as an input.

The Minerals Council warns that this might affect South Africa’s iron-ore exports to China, as well as other minerals such as chrome and manganese that feed into the Chinese stainless steel sector.