South African miners are relieved that platinum, gold, coal, and manganese have avoided new U.S. tariffs. However, concern remains.
The U.S. imposed 30% tariffs on several imports. Fortunately, minerals that support South Africa’s mining industry were spared.
But Hugo Pienaar, Chief Economist at the Minerals Council, warns of wider economic effects. He says, “There is a domino effect.”
Diamonds and iron ore were not exempt. Pienaar says, “We don’t export much of iron ore, that largely goes to China. But diamonds, we do export quite a bit to the U.S., so that will be a challenge.”
South Africa trades heavily with China and Europe. China takes most of the iron ore, manganese, and chrome.
Pienaar warns, “This is a global shock… it’s going to dampen global growth in 2025 and perhaps beyond.”
That would mean lower demand for minerals. That is bad news for South Africa’s economy, which relies on mining exports.
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Auto Sector Woes May Hurt Platinum Sales
Vehicle prices in the U.S. may rise due to a 25% import tariff. This could reduce car demand.
Pienaar says, “To the extent that those higher prices dampen the demand for vehicles… that should then have a knock-on effect on the demand for platinum group metals.”
Platinum, palladium, and rhodium are used in autocatalytic converters. Fewer car sales mean lower PGM demand.
Meanwhile, gold prices are hitting record highs. Pienaar notes, “We are fortunate that on the input cost side… the oil price has come down a lot.”
He explains, “The decline in the oil prices outweighed the weaker currency.”
South African miners are benefitting from the weak Rand. It boosts their dollar income when converted to local currency.
Still, machinery and equipment will cost more. Pienaar says, “If the RAND remains at these levels, the cost of those will… go up.”
South Africa Must Prepare for Long-Term Shifts
The Minerals Council urges reforms. The country must attract more exploration and improve the mining business environment.
Pienaar says, “South Africa is a reliable supplier of several minerals… required over time for the green transition.”
He adds, “We need to get our domestic business environment more conducive… to create a pipeline of future mining activity.”
Diamonds remain a concern. Pienaar says, “That industry is already under pressure… with lab-grown diamonds.”
He adds, “The diamonds certainly are in a tough spot at this stage.”
Despite tariff relief, South Africa’s mining future depends on smart planning and adapting to global trends.