South African Mining industry sees 22% increase in production in spite of global challenges

South Africa is rich with natural resources, and mining is big business: from traditional fuels like coal, to precious metals like gold and, of course, diamonds. It’s also the largest producer of chrome, manganese, platinum, vanadium and vermiculite. The ground offers a rich seam than has long been mined and used in supporting power production and technological advancements around the world.

Whilst coal mining has seen a steady decline in South Africa due to various factors including the global push for cleaner energy and carbon reductions, the latest report from the Statistics South Africa (Stats SA) department reports that overall the mining industry has seen a 21.9% year-on-year rise in production as of May 2021. This follows the previous month’s growth of 117.4%. Given the challenges created by the global pandemic including mass shutdowns, this is an important boost to the South African economy. It also underlines how important these raw resources continue to be to every aspect of our lives – and emphasises the continued investment and expansion of in-country projects.

Mineral Production

Albeit comparing to a low base rate, it is still a positive indicator in comparison to the previous year. Key summaries within the report show that PGMs (Platinum group metals – platinum, palladium, rhodium, ruthenium, iridium and osmium) saw the highest percentage points at 6.1 and saw a 27% rise. Other large contributors included gold (44.5% rise and 4.8 percentage points), iron ore (48.4% and 4.0 percentage points) and manganese ore (39.7% and 3.2 percentage points).

When looking at month-on-month seasonality the adjusted mining production in May 2021 it had decreased by 3.5% compared with April 2021 which was a record month. This followed month-on-month changes of 0.2% in April 2021 and 4.5% in March 2021.

Looking at seasonally adjusted mining production there was an increase of 5.6% in the three months ended May 2021 compared with the three months prior. The three largest positive contributors were again PGMs (12.9% and contributing 2.8 percentage points), gold (9.1% and contributing 1.2 percentage points) and manganese ore (13.5% and contributing 1.2 percentage points). Iron ore saw a decline over the same period (-6.9% and -0.8 percentage points).

Mineral sales

The Stats SA report shows that year-on-year mineral sales (at current prices) increased by 88.2% in May 2021. Following April’s 151.1% rise this is a positive and expected uplift when considering demand is seeing an upward trend since May 2020. The major contributor was once again PGMs contributing 68.7 percentage points and a year-on-year rise of 258.2%. This was followed by iron ore (116% increase and contributing 16.3 percentage points) and coal (12.5% increase and contributing 3.1 percentage points).

Source: Total value of mineral sales - Stats SA


The report goes on to show seasonally adjusted mineral sales (at current prices) decreased by 3% in May 2021 compared with April 2021. This followed month-on-month changes of 2.6% in April 2021 and 17% in March 2021.

South Africa continues to be one of the richest resources in raw materials and minerals, mining contributed approximately $15.5 billion U.S. dollars (roughly 226.2 billion South African Rand July 21) to the country's GDP (Gross Domestic Product). The recent report from Stats SA is an example of how key materials are in global demand, whether it be traditional coal mining or the increase in materials required for renewables such as wind turbines, solar and energy storage in a drive to lower carbon emissions.