GOLD’S surge past $5,000 per ounce on Monday has boosted expectations that the mining sector will provide crucial relief for South Africa’s strained public finances, with precious metals poised to bolster state coffers this year, said Business Day.
The rally arrives less than a month before the country’s finance minister Enoch Godongwana delivers his budget speech, following a challenging year for Treasury revenues.
Local mining companies paid only R43.6bn in taxes during 2024, down 49% from 2023, as more than two years of suppressed platinum group metal prices, double-digit electricity tariff increases and rising labour and water costs weighed on profitability, said Business Day.
Treasury royalties fell 37% to R16bn whilst VAT payments declined 24% to R21.5bn. In the PGM sector, royalties dropped 59.8% to R3.6bn as miners cut production.
The outlook has changed dramatically in recent months as investors dump bonds and currencies amid US President Donald Trump’s erratic international trade stance, driving demand for South African metals.
Dawie Roodt, chief economist at the Efficient Group, told News24 that the frenzied rally of gold and most other commodities, except oil, was certainly good news for South Africa, with tax collections from mining companies expected to rise as a result.
Roodt said mining taxes should bring “a couple billion extra” into government coffers but stressed revenue gains were more likely to come from tax administration than commodity windfalls. “The only way that you can really get more revenue out of the system is what they are doing – and that is using a very aggressive SARS to squeeze every last drop of blood out of this economy,” he told the publication.
Azar Jammine, director and chief economist at Econometrix, said the flows into the mining sector were extraordinary and, at current prices, would amount to an additional R350bn in revenue on an annualised basis.
“This is absolutely huge. Just do the maths: we produce 3.5 million ounces of gold per annum, and the price of gold has gone up by $2,500/oz,” Jammine was quoted by News24 as saying. “Assuming current prices are sustained, it gives you additional annualised revenue of $6.25bn [about R100bn], compared with this time last year.”
When it comes to platinum, prices climbed from $900/oz a year ago to $2,900 currently.
Analysts have sharply raised PGM forecasts, with platinum now expected to breach $3,000/oz, more than triple the end-2024 closing price. Palladium has climbed nearly 30% this year after doubling in 2025.
Copper passed $13,000 per ton earlier this month amid supply crunch fears. The metal soared 40% last year after Trump unveiled a 50% duty.
