Minerals have historically been essential for economic development, underpinning wealth generation, technological advancements and industrialisation. The South African mining industry has been a cornerstone of the national economy, demonstrating robust performance across various metrics for several decades. To illustrate, in 1980, the Industry contributed 21% towards the Gross Domestic Product (“GDP”) and in 2022, the Industry generated a turnover of R1.22 trillion, with the mining of metal ores (excluding gold and uranium) accounting for over two-thirds of this figure. Not only has the Industry contributed towards the economy through the GDP impact and revenue generation but also created jobs with 475,561 people employed in 2022, and infrastructure development.

Recent Trends of Decline

Despite the Industry recording these notable achievements, recent trends point towards a concerning decline. The Industry is in a technical recession. The Industry, particularly the gold mining workforce, has declined from over half a million in 1988 to just 94,000 in 2023. The Mining GDP has recorded a quarterly decline in four of the last five quarters. 

In comparison to Q1 2024, the mining GDP declined by 4.1% year over year. As of 2025, the Industry continued to face significant challenges. According to Statistics South Africa, mining production decreased by 9.6% year-on-year in February 2025, marking one of the steepest monthly declines in recent years. Key contributors to this downturn included platinum group metals (“PGMs”) with a 23.9% drop, iron ore down by 10.5%, gold by 7.6%, and coal by 4.3%.

While the country’s overall economy grew by a marginal 0.1% quarter-on-quarter, the Industry declined by 4.1%, subtracting 0.2 percentage points from GDP growth. This decline is part of a longer-term structural decline, particularly in gold mining, which once secured the South African economy. 

In addition, mineral sales at current prices fell by 12.9% year-on-year in February 2025, with significant declines in iron ore (29.5%), gold (32.7%), PGMs (12.2%), and chromium ore (23.2%). 

Revenue has also taken a hit. Although the sector recorded a turnover of R1.22 trillion in 2022, stagnation in 2023 and early signs of contraction in 2024 followed, largely due to declining commodity prices and reduced global demand.

Employment in the mining sector has also been affected. In 2023, the employment rate fell to 94,000 employees. The Quarterly Labour Force Survey for Q1 2025 shows a decrease of 291,000 in the number of employees across all sectors, with the mining industry contributing to this decline. The official unemployment rate increased by 1.0 percentage point to 32.9% in the first quarter of 2025.

These figures underscore the ongoing challenges within the Industry, highlighting the need for strategic interventions to stabilise and revive the Industry.

Contributing Factors

The sustained decline in the Industry output is not solely the result of global market fluctuations as mentioned above; rather, it reflects deep-rooted structural issues within the industry.

Energy Crisis: Frequent load shedding has disrupted operations across multiple commodity segments, forcing mines to reduce output or suspend production entirely. In 2025, Eskom reintroduced Stage 3 load shedding due to multiple breakdowns and a shortfall of 3 GW of electricity which may affect mainly junior miners who do not have the affordability means for back-up energy. 

Logistical Inefficiencies: Reliable rail and port infrastructure have severely delayed the transportation of bulk minerals such as coal, iron ore, and manganese. In 2025, Transnet projected rail freight volumes of 160 to 165 million tons, falling short of its 170-million-ton target. Challenges include equipment shortages, maintenance backlogs, rampant cable theft, and vandalism. 

Administrative backlogs: The prescribed period for the processing of applications is often not met by the decision-making authorities. The same concern with administrative backlogs extends to the turnaround times for dispute resolution in respect of issues about the overlaps of Mining-related and exploration rights. Mining rights and prospecting rights are processed largely by hand and delays of up to three years on the granting of mining rights and prospecting rights have been the result.

Furthermore, the 2025 draft Mineral and Petroleum Resources Development Bill has sparked significant debate from various stakeholders within the Industry.

Conclusion

The Mining Industry has experienced a notable decline despite its historic role as a cornerstone for economic growth and employment. The Mining Industry is now contributing less towards the GDP and job creation than it used to even a decade ago. The current 4.1% drop in Q1 2025 and drop in mining revenue are not figures that are to be read separately but signs of deeper, systemic weakening. Urgent steps need to be taken to address energy insecurity, backlogs, and investing towards critical minerals which are in demand. For a country still rich in mineral reserves, this downward trajectory is not inevitable, however, reversing it requires leadership, accountability, and policy alignment.

There have been relentless efforts from various stakeholders to improve the mining industry’s contribution, and we hope to see a recovery in the sector going forward. 

Contact Sitef & Co via email on info@sitef.co.za to find out more.

Authors: Anthony Sepheku and Xiluva Mabunda (Candidate Legal Practitioners)