South Africa’s mining output fell 7.5% year-on-year in July, far steeper than the 4.0% decline economists had forecast and an acceleration from June’s revised 4.3% drop and May’s 5.1% contraction. On a seasonally adjusted month-on-month basis, output slipped 1.9%, reversing a marginal 0.1% expansion in June. The deterioration was broad-based: ten of the twelve mining subsectors tracked by Stats SA recorded declines in July.
Diamonds were the worst performer, with output down 48.2% year-on-year, followed by nickel at minus 18.8% and platinum group metals at minus 13.5%. Only chromium ore, up 13.7%, and manganese ore, up 4.9%, bucked the trend. Coal and iron ore, the other metals named in the headline figures, had already been weakening through the second quarter: Stats SA’s June data put coal output down 7.5% year-on-year and iron ore down 8.1%, while the Minerals Council’s own tracking for the January-to-May period showed coal down 5.8% on weak demand from Eskom and iron ore down 7.8% on rail constraints.
The sector’s weakness fed directly into the broader economy. Stats SA figures show mining and quarrying output fell 3% in the second quarter, a significant contributor to the 0.2% GDP contraction recorded for that period. FNB senior economist Thanda Sithole described activity in the sector as fragile, and said the July figures raise the likelihood of another negative contribution to GDP growth in the third quarter, pointing to persistent global uncertainty, infrastructure constraints and elevated production costs as the key drags.
| Commodity | Period | Year-on-year change |
|---|---|---|
| Diamonds | July 2026 | -48.2% |
| Nickel | July 2026 | -18.8% |
| Platinum group metals | July 2026 | -13.5% |
| Chromium ore | July 2026 | +13.7% |
| Manganese ore | July 2026 | +4.9% |
| Coal | June 2026 | -7.5% |
| Iron ore | June 2026 | -8.1% |
| Coal | Jan-May 2026 | -5.8% |
| Iron ore | Jan-May 2026 | -7.8% |
| Diamonds | Jan-May 2026 | -6.1% |
Minerals Council economist André Lourens has pointed to fading commodity price support as a key factor behind the slowdown. Gold and platinum group metal prices retreated from May and continued softening through June and July, even though prices remain high enough in absolute terms to keep supporting month-on-month production, which rose 1.3% in May on that basis. Lourens singled out diamonds as under particularly severe pressure, with several operations already announcing stoppages and further mine closures a real risk without intervention.
The price-volume relationship cuts both ways. Even as gold mining volumes struggle, the gold price itself has continued climbing toward record highs in rand terms, lifting both the currency and miners’ earnings. Pan African Resources, for instance, said this week it expects headline earnings per share to nearly triple, a reminder that softer output does not necessarily mean softer profits when prices are strong enough.
Cost pressures are compounding the volume problem. The Minerals Council says mining and industrial majors paid Eskom R115 billion for electricity in the 2025/26 financial year, nearly R50 billion more than in 2021, with tariff increases consistently outpacing the Reserve Bank’s inflation target for more than two decades. Rising fuel prices, linked to renewed Middle East tensions, have added further pressure on machinery running costs and port logistics.
There was a partial offset elsewhere in the economy: manufacturing output rose 1.1% year-on-year in July, aided by stronger textiles and food and beverage production, though Investec economist Lara Hodes cautioned that weak consumer confidence and soft spending on non-essential goods continue to temper the outlook. The Minerals Council has repeated its call for structural reforms, including more affordable electricity, improved rail and port logistics, greater private sector participation in freight rail, and stronger exploration incentives, as the conditions needed to turn the sector’s current price support into a durable volume recovery.