Gold’s blistering run has buoyed hopes that the mining sector will emerge as a timely buffer for South Africa’s strained fiscus, as precious metals promise to bolster state coffers this year. On Monday, the price of safe-havengold soaredpast $5,000/oz, well ahead of schedule and just less than a month before finance minister Enoch Godongwana delivers his budget speech. The rally comes after a challenging year for the Treasury’s revenues, in which profitability pressures in the local mining sector weighed on the nation’s strained public finances.
More than two years of suppressed platinum group metal (PGM) prices, coupled with double-digit electricity tariff hikes and the rising cost of labour and water, saw local mining companies pay only R43.6bn in taxes in 2024, which is 49% lower than in 2023. Treasury royalties fell by a similar margin, down 37% to R16bn, while VAT payments declined 24% to just R21.5bn. In the PGM sector, where stubbornly low prices forced miners to cut back on production, Treasury royalties dropped a staggering 59.8% to just R3.6bn.
In recent months, however, the outlook has changed dramatically, fuelling hopes of a rare fiscal bright spot. As investors dump bonds and currencies in the face of US President Donald Trump’s erratic stance on international trade, demand for South Africa’s metals has ballooned. Analysts havesharply raisedtheir PGM forecasts as tariff uncertainty and sustained market deficits fuelled a flock to platinum and palladium in the second half of 2025.
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After recording itsstrongest annual performanceon record in 2025, the price of platinum is now expected to breach $3,000/oz, more than triple the closing price at the end of 2024. Palladium has climbed just shy of 30% this year after more than doubling in 2025. The upswing gives local PGM heavyweights, by far the biggest employers in South Africa’s mining sector, significant earnings leverage, freeing up capital to boost production or at least keep previously unprofitable operations alive. Sibanye-Stillwater, in particular, has seen its share price skyrocket 375% in the past year as investors expect a cash windfall from its gold and PGM operations.
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