Mining sector a rare source of resilience in Q3 2025

In Q3 2025, while many industries experienced employment declines, mining added 2,000 jobs (y-o-y), bringing its workforce to 474,000. (Image source: ©World Finance World finance)

On a quarter-on-quarter (q-o-q) basis, the sector expanded by 5,000 jobs, suggesting a modest but noteworthy rebound.

This dual-period growth highlights mining’s countercyclical potential and its role in stabilising employment amid broader sectoral contractions.

Despite persistent structural pressures across South Africa’s labour market, the economy recorded a net quarterly gain of 29,000 jobs in Q3 2025, reaching a total of 10,549,000 employed persons.

This short-term improvement contrasts sharply with the year-on-year (y-o-y) trajectory, which saw a contraction of 79,000 jobs compared to Q3 2024 — underscoring the fragility of the recovery. Within this uneven landscape, the mining sector emerges as a rare source of resilience.

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Structural weaknesses across the economy

The y-o-y formal employment performance reveals significant structural weaknesses across the economy, with five of the eight sectors in the QES shedding jobs.

1. The community services sector recorded the largest decline (-45,000), reflecting fiscal consolidation pressures and tighter government budgets that constrained hiring in health, education, and public administration.

2. Manufacturing (-26,000) and construction (-20,000) also contracted sharply, driven by weak domestic demand, rising input costs, and subdued investment activity.

3. Trade (-7,000) and transport (-3,000) losses highlight the impact of sluggish consumer spending and softer logistics demand linked to global and local supply chain disruptions.

4. In contrast, business services (+23,000) expanded strongly, supported by growth in professional, financial, and IT-related activities that remain more resilient to cyclical downturns.
5. Electricity (+3,000) added jobs as investment in energy infrastructure and renewable projects created new opportunities.

6. Notably, mining (+2,000) registered gains, reflecting higher commodity demand and stabilisation in production after previous contractions.

Together, these dynamics underscore the uneven recovery, with service-oriented and resource-linked sectors showing resilience while labour-intensive industries continue to struggle under structural and cyclical pressures.

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Mining wages

Post-Covid shows that real mining wages have consistently exceeded the value of output produced. This imbalance carries several important consequences:

• Rising unit labour costs: Wages are increasing faster than productivity, as a result, the cost of producing each unit of output rises, making production structurally more expensive.

• Loss of global competitiveness: Since mining operates in globally traded markets (pricetakers), this erodes the competitiveness of domestic producers.

• Pressure on profitability: Mining companies are “price takers” in international markets—they cannot set prices but must accept prevailing ones. When costs rise without matching productivity gains, profit margins shrink directly.

• Long-term sustainability risks: In the short term, workers benefit from higher wages.

However, if productivity does not eventually align with real wage growth, the sector faces slower growth, reduced investment, and potential contraction over time.

This signals structural fragility: a sector that cannot sustain wage increases without productivity improvements risks stagnation.

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Remuneration per employee across sectors

Mining sector wages rose from R79,957 in Q3 2019 to R108,759 in Q3 2025, a 36% increase—outpacing headline CPI growth of 32% and slightly above the overall economy’s 33% rise.

This places mining among the faster-growing sectors in terms of remuneration, alongside finance and construction.

The above-inflation wage growth suggests real gains for mining employees, but it also highlights potential cost pressures for the sector, especially given its exposure to globally competitive markets where higher labour costs can erode profitability.

Looking ahead

The mining sector’s modest but consistent job gains point to a potential stabilising role in South Africa’s fragile labour market.

Sustained demand for commodities such as chrome and gold and the PGMs could continue to support incremental employment growth, even as other labour-intensive industries face structural headwinds.

However, the broader picture remains uneven: fiscal constraints, weak domestic demand, and global supply chain pressures are likely to weigh on sectors such as community services, manufacturing, and construction.

This suggests that while mining may provide short-term resilience, long-term labour market recovery will depend on addressing structural weaknesses and fostering investment across a wider range of industries.