By: Business day

In an opinion piece, Ashley Nyiko Mabasa, an executive manager in the office of the deputy mineral resources & petroleum minister, analyzes the prospects for South Africa's mining sector in 2026. The author notes that while the industry expanded by just 0.5% in the third quarter of 2025, below the country's average GDP growth, it faces a critical juncture of risk and opportunity.

The subdued performance is attributed to rising geopolitical risk and a structural slowdown in demand for platinum group metals (PGMs), driven by the rapid global shift to electric vehicles. This transition is projected to cause a secular decline in PGM demand of about 5% annually through to 2035. The recent demerger of Anglo American’s platinum division, triggering a significant foreign direct investment outflow, underscores this pressure.

However, favorable monetary policy, with the South African Reserve Bank signaling lower interest rates for 2026, and a stronger rand provide a supportive backdrop. More significantly, global demand for critical minerals essential for defense, the energy transition, data centers, and semiconductors has created substantial supply gaps. Mabasa identifies this as a major opportunity the South African mining sector must seize.

To unlock this potential, the author argues the focus must shift to stabilizing domestic infrastructure, including the completion of the mining cadastral system by September 2026 and the ongoing stabilization of Transnet. Internally, the sector should adopt analytics and AI to reduce downtime, redesign operating models, transition to renewable energy to stabilize costs, and engage transparently with investors.

Furthermore, Mabasa emphasizes that miners must not neglect their social license to operate. Approaching community support as an opportunity and engaging systematically throughout the mining lifecycle is presented as critical for building trust, winning approvals, and addressing issues like illegal mining. While navigating increased US-China competition for Africa's critical minerals, the author concludes that proactive adaptation to these shifting dynamics is essential for the sector to drive GDP growth above the population rate and reduce unemployment.