Some economists view recovery in mining activity as a good sign

JOHANNESBURG - Some economists believe the ongoing recovery in mining activity is a good sign, on the back of subdued domestic growth and elevated global trade uncertainty. 

The vote of confidence follows a third consecutive increase in mining production in the second quarter of the year. 

Production increased by 4.4 percent year-on-year in July, almost double the gains from the previous month. 

Senior Economist at FNB, Thanda Sithole, said if sustained, this momentum in the mining industry could support GDP growth. 

But he said the weakness recorded in the first half of the year suggests mining output could still contract by close to 1% in 2025. 

Year-to-date, output is down by 1.9%, which Sithole said underscores reduced activity in key sectors such as platinum group metals, gold, and coal. 

While favourable terms of trade and us tariff exemptions on certain critical minerals may provide some support, soft external demand and persistent uncertainty are likely to keep global growth sluggish. 

READ: Mining production increases in July, gives economy a lift

Some mineral commodities are on a list of exemptions from the punitive tariffs imposed by United States President Donald Trump. 

Sithole said domestic structural reforms to improve port and rail logistics will be critical to boosting medium to long-term mining activity.