China’s critical minerals pause could change 2025 mixed fortunes for SA mining sector

24 Apr 2025

Mining data revealed another obstacle in the challenging start to 2025, with production 5.6% lower in the first two months compared with the same period in 2024, but critical minerals may yet save the day in the wake of Beijing’s export pause.

Outgoing Sibanye-Stillwater CEO Neal Froneman gave a bullish assessment of the platinum group metals (PGM) sector at Mining Indaba 2024, declaring it ripe for investment. “I think we’ve become overly negative about the decrease in the basket price,” he told Daily Maverick, then basing the decline on temporary destocking after the Russia-Ukraine conflict triggered supply shortage fears.

Fourteen months later his prophecy has failed to materialise, and he is almost out the door of the house that he built. South Africa’s PGM sector, in fact, now faces a deeper crisis that threatens the stability of one of the country’s key mining pillars.

In a strange twist, Donald Trump’s trade war with China could create new strategic opportunities. Beijing’s tightening export controls on critical minerals have squeezed global supply, creating potential openings for alternative producers such as a resource-rich country at the southern tip of Africa.

China controls reshape global supply chains

Recent customs data reveals Chinese exports of antimony and germanium products in the first quarter plunged 57% and 39% respectively compared with a year earlier. March exports of gallium hit their lowest level since October 2023. The pattern has left overseas consumers scrambling to secure materials, pushing prices to record highs.

Beijing has gradually added these metals to its export controls list since 2023, requiring exporters to apply for licences through an opaque process that reinforces China’s dominance in these supply chains. In December, China banned exports of these materials to the US entirely.

More concerning for global markets, China added seven rare earth elements to its control list this month. Exporters expect to wait months for licences and potentially longer for sales to the US, to which no antimony has been exported since September and no germanium or gallium since 2023.

This strategic shift by China could create opportunities for South Africa, which holds dominant positions in several critical minerals. According to USGS data, South Africa produces 70% of the world’s platinum, 36% of palladium and 37% of manganese – all crucial components for clean energy systems and advanced technologies.

While China controls most of the world’s gallium, magnesium, tungsten, bismuth, graphite, rare earths and vanadium, South Africa’s strength in PGMs and manganese positions it well to capitalise on the global supply disruptions.

PGM crisis worsens despite early optimism

There’s one snag, though: Statistics South Africa reports PGM production has plummeted 18.8% month-on-month, contributing significantly to the overall 4.4% month-on-month decline in seasonally adjusted mining production.

Froneman also predicted that luxury goods purchasing, including automobiles, would recover as interest rates normalised – this hasn’t yet translated into increased demand for PGMs used in catalytic converters. And tariffs on vehicle imports in the US have further dampened automotive demand, exacerbating pressures on PGM consumption.

Read more: Short-term uncertainty but long-term outlook for PGM prices seen brightening, say CEOs

Impala Platinum’s recent performance illustrates these ongoing challenges. Despite strong operational delivery and cost containment measures, the company reported dollar revenue per 6E ounce sold down 3% to $1,334, while rand revenue per 6E ounce sold declined by 8% to R23,831.

What this means for you

China’s mineral pause = opportunity: China’s decision to restrict critical mineral exports is shaking up global markets – and creating new demand for South African resources like manganese, copper and nickel.

South Africa’s critical minerals in demand: Global industries urgently need minerals for clean energy and tech. South Africa produces a significant share of the world’s platinum, palladium and manganese, making it well placed to step up as an alternative supplier.

PGMs still struggling: Despite early optimism, PGMs are under pressure. Prices and production are down, affecting big players such as Impala Platinum and ARM.

Diversification is key: The mining sector is slowly pivoting to diversify into more resilient minerals, with copper (especially in the Northern Cape) showing signs of a strong comeback.

Export potential rising: A weaker rand and global shortages may help local producers export more, if they can ramp up production fast enough.

Long-term upside for investors: Investors who understand the shift from traditional to critical minerals could benefit long-term, especially in clean energy, battery tech and EV-related mining plays.

SMEs should watch the supply chain: If your business is linked to mining or exports, monitor global demand and trade policy changes – they could impact your costs or open new opportunities.

Policy and infrastructure matter: Unlocking this potential depends on South Africa’s ability to improve infrastructure and regulatory certainty.

Critical minerals to the rescue?

While PGMs struggle, many minerals are on the up. Manganese has emerged as a standout performer with an impressive 21.2% year-on-year increase in production. Copper (+14.6%), nickel l (+11.4%) and diamonds (+10.4%) have also shown substantial growth, creating bright spots in an otherwise challenging mining landscape.

The positive performance of copper and nickel – both critical minerals essential for the global energy transition – shows the country’s potential to pivot towards supplying materials crucial for renewable energy technologies and electric vehicles.

Copper’s revival in the Northern Cape is a big opportunity for South Africa to position itself as a supplier in the expanding global market for these strategic minerals.

This growth aligns with Harmony Gold’s strategic pivot towards a “de-risked and diversified asset portfolio with near-term copper”, indicating industry recognition of the strategic importance of critical minerals in future mining portfolios.

Silver lining still surrounds a dark cloud

The overall production picture remains concerning, with real mining production 5.6% lower in the first two months of 2025 compared with the same period in 2024. February’s figures were particularly troubling, showing a 4.1% month-on-month decrease and a significant 9.6% year-on-year decline.

Nine of 12 mining subcategories recorded month-on-month output declines in February, with the heavily weighted iron ore and PGM sectors leading the downturn. The Minerals Council anticipates that the mining sector will “detract meaningfully” from Q1 real GDP.

As the weak rand increases export competitiveness, the mining sector may find new opportunities in the strategic void created by China’s export controls.

The diverging paths between struggling traditional sectors and emerging critical minerals appears set to widen. For South Africa’s mining industry, adapting to this new strategic reality will require regulatory clarity, infrastructure investment and corporate agility to capitalise on the reshaping of global critical mineral supply chains. DM

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Business Maverick

China controls reshape global supply chains

PGM crisis worsens despite early optimism

What this means for you

Critical minerals to the rescue?

Silver lining still surrounds a dark cloud