By Thanda Sithole
Key highlights
Mining output showed continued weakness at the start of 3Q26. Non-seasonally adjusted mining output declined by 7.5% year-on-year (y/y) in July, following a revised 4.3% (previously 4.0%) contraction in June. Ten of the 12 mining divisions recorded decreases in production, while two recorded increases (Figure 1).
Seasonally-adjusted mining output, which is important for assessing the sector's contribution to quarterly GDP growth, decreased by 1.9% month-on-month (m/m) in July, following a revised 0.1% (originally 0.3%) expansion in June. If sustained, this points to a persistent drag from mining on 3Q26 quarterly GDP growth, after the sector weighed on growth in 2Q26.
Key data insights
The July data points to continued weakness in mining activity amid persistent global uncertainty, infrastructure constraints and elevated production costs. In particular, the contraction in seasonally-adjusted output, together with the retrospective downward revision to June, is concerning and suggests that activity in the sector remains fragile, increasing the likelihood of another negative contribution to overall GDP growth in 3Q26.
The 0.6% year-to-date (January to July) increase in mining output is very modest, although slightly better than the muted 0.2% growth recorded over the full year in 2025. Generally favourable commodity prices have continued to provide support to the sector, even though the production response has remained subdued. This has enabled mining companies to remain relatively cash-generative despite persistent operational constraints.
However, for the first time since July 2025, total mineral sales decreased by 5.6% y/y in July, largely weighed down by a 33.4% decline in gold sales, though up 37.1% year-to-date. Excluding gold, mineral sales grew by 3.8%, albeit at the slowest pace in 13 months. Platinum Group Metals (PGMs) sales increased by 3.2% and are up 74.8% year-to-date, while coal sales rose by 5.0%, ahead of 2.1% year-to-date increase and manganese ore sales rose by 1.7%.
Although moderate, the continued growth in mineral sales excluding gold highlights the important distinction between underlying production trends and revenue performance, with relatively favourable commodity prices continuing to provide some resilience to the sector even as physical output remains constrained. However, the decline in total mineral sales suggests that this price support is becoming less broad-based, particularly given the sharp deterioration in gold sales.
Looking ahead
The near-term outlook for mining remains challenging, with weak production momentum likely to persist amid infrastructure constraints, elevated input costs and a less certain global environment. While favourable commodity prices should continue to provide some support to mining profitability and investment, the subdued production response suggests that structural constraints remain a key impediment to a stronger supply response. A sustained recovery will thus depend not only on commodity prices, but also on improvements in electricity and logistics reliability, operational efficiency and investment in productive capacity.
