Mining sector woes threaten South Africa’s GDP growth in first quarter

MINING activity in South Africa is expected to drag the first quarter's gross domestic product (GDP) growth as it continued declining and plunged the most in more than two years in February.

- SIPHELELE DLUDLA

Data from Statistics South Africa (Stats SA) on Tuesday showed that mining production fell sharply by 9.6% year-on-year in February following a downwardly revised 1.5% contraction in January. Excluding gold, mining output fell by an even steeper 10.0% year-on-year.

The February mining print was the fourth month of decline in a row and the steepest slump since November 2022.

Stats SA’s principal service statistician, Jean-Pierre Terblanche, said platinum group metals (PGM) and iron ore were the largest negative contributors.

The PGM sector makes up 30.2% of the mining basket and it continued to face a number of supply challenges in February.

“Platinum group metals declined by 23.9% and iron ore dropped by 10.5% year-on-year. Together, both dragged overall growth lower by 7.7 percentage points,” Terblanche said.