South Africa’s mining sector expanded just 0.5% in the third quarter of 2025, highlighting growing concern about the industry’s outlook. Growth was well below the country’s average GDP growth of 0.8% over the past 10 years and also weaker than South Africa’s population growth of 1.3%, meaning output effectively dropped on a per-capita basis. The subdued performance is a reflection of rising geopolitical risk and a structural slowdown in demand for platinum group metals (PGMs), which both continue to weigh on the sector’s medium-term prospects.
Though it has registered four consecutive quarters of expansion, the Suith African economy has generally underperformed, with several key industries experiencing a tumult.That was driven by several factors, including US tariffs and an existential crisis in the domestic ferrochrome sector. However, the most acute pressure stems from the accelerated displacement of internal combustion engines (ICEs) by electric vehicles (EVs) in key export markets, which directly affects demand for PGMs. The PGM industry was further affected by the demerger of Anglo American’s platinum division, which now operates as Valterra Platinum.
The move triggered a foreign direct investment outflow of R73bn, the largest of its kind since 1985. Global EV market concentration has surged to 20%, up from negligible levels in 2010, reshaping the outlook for catalytic converters. The data points to a permanent shift: if China meets its target of 60% new EV penetration by 2030, and the EU achieves a full transition by 2035, electric drivetrains are projected to eclipse traditional engines by 2034.
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Analysts warn this crossover will precipitate a secular decline in PGM demand of about 5% annually through to 2035. The effect of this transition is already visible in bellwether markets such as Norway, where EV market share reached 96.9% in January, heavily damping global appetite for South Africa’s key mineral exports. Nonetheless, monetary policy has offered a favourable outlook for the sector.
The South African Reserve Bank and the National Treasury have signalled lower interest rates for 2026, aligning with an inflation target of about 3%. That is an important boost for the industry and is expected to encourage inflows of foreign direct investment. The present strength of the rand, now trading at about R16.63/$, its strongest level since January 2023, further strengthens that position.
The rand’s appreciation is partly a consequence of the dollar’s continued weakness; it has fallen 10.8% against a basket of currencies since the start of 2025. In the first half it recorded its worst performance since 1973. For South Africa and other emerging markets, particularly those with dollar-denominated debt and commodity exports, a weaker dollar provides a crucial tailwind.
Geopolitics will remain a key factor for South Africa’s critical minerals in 2026. Still, the immediate focus must shift to stabilising domestic infrastructure. The completion of the mining cadastral system, planned for September 2026, and the ongoing stabilisation of Transnet are vital levers for the mining supply chain, building on the improvements seen in 2025.
Global demand for minerals essential for defence, the energy transition, data centres and semiconductors has created supply gaps with significant security and economic implications. That is an opportunity the South African mining sector must seize in 2026. As the US and China race to secure access to Africa’s critical minerals and rare earth elements, South Africa must navigate this new phase of competition. While American companies are reorganising to engage in commercial mining, the US remains far behind China in establishing a strong presence in Africa’s mining sector, a dynamic highlighted by projects such as the Lobito Corridor — the 1,300km railway and logistics project linking Angola’s port of Lobito to the mineral-rich copperbelt of the Democratic Republic of the Congo and Zambia.
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