South Africa’s September mining production rose 4.7% y/y

South Africa's mining sector has shown signs of growth in the latest data, with a 4.7% year-on-year increase in September. Hugo Pienaar, Chief Economist at the Minerals Council of South Africa, highlighted the key developments in the mining industry during a recent interview. Pienaar discussed the reweighting exercise of mining subcomponents, emphasizing the shift in weights from gold and coal to iron ore and platinum group metals (PGMs). This change reflects a significant reconfiguration in the contribution of different minerals to total mining production, with PGMs now accounting for 30% of the total, while coal's weight has decreased to 21%. Although Pienaar acknowledged that recent struggles in the PGM sector might impact these numbers if recalculated today, he deemed the overall results as positive. The positive growth in mining production is expected to contribute to the GDP in the third quarter, aligning with the uptick observed in the manufacturing sector. Pienaar projected a potential GDP growth of around 0.4% to 0.5% for the third quarter, indicating an improving trend in economic performance. Looking ahead, he suggested that sustained low inflation, potential interest rate reductions, and adequate infrastructure development could propel the economy towards reaching growth levels of up to 2% by 2025. However, Pienaar cautioned that global risks, particularly related to China's economic situation and potential trade tensions, could influence the trajectory of South Africa's mining sector and overall economic growth. Furthermore, he stressed the importance of public sector expenditure, highlighting the need for increased investment in infrastructure to stimulate economic growth. Addressing challenges faced by the manufacturing sector, Pienaar pointed out longstanding issues such as de-industrialization and high operational costs. He emphasized the importance of improving the business environment by addressing factors like electricity prices, infrastructure quality, and labor costs to enhance the competitiveness of local industries. As the mining sector continues to show positive growth, stakeholders are optimistic about the potential for further expansion and its broader impact on the economy.