South Africa’s 2024 mining sector outlook

South Africa's mining sector has been facing challenges in 2023 with a 2.5% year-on-year decrease in production reported in August. Looking ahead to 2024, the industry is expected to continue grappling with various issues such as declining metal prices, rising costs, and infrastructure constraints. CNBC Africa recently interviewed Peter Major, Director at Mining Modern Corporate Solutions, to discuss the outlook for the mining sector in the coming year. Major highlighted the struggles faced by platinum group metal (PGM) producers, particularly due to falling prices and increasing costs. He mentioned that platinum producers are experiencing significant pressure as prices have dropped to levels seen five years ago while production costs have soared, leading to layoffs and wage freezes. Additionally, Major pointed out the challenges related to transport infrastructure in South Africa, which is affecting the movement of commodities like coal, iron ore, manganese, and chrome, despite the high prices of these minerals. The country's ports are inefficient, causing stockpiles at mines and ports. The reopening of China has had a positive impact on the global iron ore sector, benefiting South Africa due to its high-grade iron ore production. Major emphasized the importance of government support in attracting foreign investment and easing regulations to boost the mining industry. He urged the government to consider the implications of job cuts in companies like Sibania, where over 4,000 retrenchments are being considered due to financial challenges. Major highlighted the domino effect of job losses on dependents and called for government intervention to prevent further layoffs. The future of South Africa's mining sector in 2024 will depend on how well the industry navigates these challenges and leverages opportunities for growth.