Statistics South Africa puts the country’s unemployment rate at 32.7% as of the first quarter of 2026. The mining sector, however, increased employment by 0.4% quarter-on-quarter to 474,162, adding 1,790 jobs.

These modest gains, according to the Minerals Council South Africa (MCSA), are attributable to stabilised demand for PGMs, gold, chrome, and manganese, as well as new project activity.

On an annual basis, mining employment rose by 8,387 in Q1 2026.

By contrast, the total economy lost 80,000 jobs (q-o-q), with sectors such as community services, trade, and transport bleeding jobs.

Ongoing challenges

The mining sector shows a clear divergence between real gross earnings per worker and labour productivity from 2019 to 2026.

Real earnings rose sharply, climbing from a baseline of 100 in 2019 to 159 by February 2026, indicating substantial real-terms wage growth.

Labour productivity declined over the same period, falling to 90 by 2026 (2019=100) after a steep drop in 2020 and only partial recovery thereafter.

This widening gap suggests that wage increases have outpaced productivity gains, implying higher labour costs per unit of output.

The trend reflects structural inefficiencies and reduced output per worker, highlighting ongoing challenges in aligning productivity with compensation growth in South Africa’s mining industry.

The mining sector recorded a nominal wage increase of 7.7%, rising from R33,795 in February 2025 to R36,405 in February 2026 — above the average CPI of 3.2% and slightly higher than the total economy’s 5.9% growth.

This suggests real wage gains for mineworkers, reflecting improved profitability in certain commodities and renewed investment in some operations.

The sector’s earnings growth aligns with its modest employment expansion, indicating that firms are rewarding skilled labour and retention amid stable global mineral demand.

Overall, mining outperformed most sectors in wage growth, reinforcing the role of organised labour in wage negotiations.

It also reflects the mining sector’s relative resilience as a pillar of South Africa’s industrial economy.

Major opportunity

While things are bound to change, MCSA chief economist Bongani Motsa cautions that the industry should watch two issues in the coming months.

Firstly, the impact of fuel costs.

Even as fuel prices dropped in July 2026, data show that prices will remain at least 20% higher than before the US-Israel attack on Iran, which began on 28 February 2026.

Secondly, Motsa says South Africa needs to turn the tide on employment and calls on stakeholders to accelerate the reforms already underway.

“Our view is that mining still presents a major opportunity,” says Motsa.

“A report in the Business Day showed that even for a declining industry such as gold, it still presents a major growth opportunity, with more than 48,000 tonnes of gold remaining underground.

“Among other low-hanging measures, extending the low electricity tariffs to the mining sector would lower input costs, improve the sector’s competitiveness, as well as retain and create new jobs,” adds Motsa.

 

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