South Africa's mining production decreased by 2.4% year-on-year in December, with platinum group metals (PGMs) and gold having made the largest negative contributions.

PGM production decreased by 7.1% year-on-year and contributed -2.7 percentage points to the December figure. Gold production decreased by 8.4% year-on-year and contributed -1.1 percentage points.

Manganese ore, which increased by 8.7% and contributed 0.5 of a percentage point to the overall figure, and coal, which increased by 2.5% and contributed 0.5 of a percentage point, were the largest positive contributors.

Seasonally adjusted mining production decreased by 3.9% in December, compared with November. This followed month-on-month changes of 0% in November and -2.8% in October.

Minerals Council South Africa comments that, on a month-on-month basis, eight of the 12 major mining subcomponents had recorded higher production, but PGMs, chrome, nickel and iron-ore recorded "steep losses" in production.

"Top of the pile was iron-ore, where output tanked by 16% month-on-month. Following the reopening of the Ore Export Channel (OEC) between Sishen, in the Northern Cape, and the Saldanha port after Transnet’s annual maintenance shutdown in October, there were more than one train derailment.

"As a result, to maintain an efficient value chain, iron-ore producers met demand by selling out of finished stock at the mines. This resulted in lower iron-ore production," the council points out.

Total mining production was 0.4% higher in 2024 compared with 2023. The 0.4% increase in yearly mining production followed an increase of 0.1% in 2023 and a decrease of 7.8% in 2022.

The Minerals Council notes that, while the full-year production indicated a somewhat better performance compared with 2023, the sector still has a long way to go to recover from the large production slump of 7.8% during 2022.

"Indeed, the level of real mining production in December was still about 9% below the pre-Covid level of 2019. This dramatically illustrates the challenging domestic operating environment for the sector and global headwinds, which include prolonged depressed PGMs pricing," the council states.

Minerals Council chief economist Hugo Pienaar comments that the mining sector's hopes for a more robust recovery this year will again be dependent on stable electricity supply and rail and port logistics operations, as well as improved water provision and local government performance.

"This is a tall order to correct over the short term. That said, we remain confident that mining load curtailment will remain absent as Eskom brings on new generation units.

"While slow, we also expect further progress in the freight rail performance. Transnet rail volumes are expected to increase to beyond 170-million tonnes, from an estimated 160-million to 165-million in 2024/25," he adds.

He also points out that the industry is looking forward to the launch of the new online mining cadastre system in the second half of this year.

"Although this will not impact mining production in 2025, it should lay a better foundation for improved production growth beyond this year."

Pienaar says water supply constraints and local government performance are likely to remain hindrances to the mining sector's growth for the foreseeable future.

"While some of the domestic constraints are set to lift, the Trump tariff wars complicate the global forces that may impact the domestic mining sector.

"Except for the gold price that should continue to benefit from the elevated uncertainty, industrial metal prices will be hurt if Trump’s antics subdue global trade/world GDP growth and stall the moderation of inflation across the globe," he points out.