Mining input cost inflation slowed to 3.7% in August from 3.8% in July, the Minerals Council South Africa said on Monday. Its Mining Composite Input (MCI) Cost Index showed prices for fuel, chemicals and electricity falling from the month before.
The council called the August reading “a temporary easing in the pace of cost growth” and said mining operating costs had not fallen across the board. Margins are still being squeezed, it said, most of all at operations with heavy energy, transport and processing needs, because several essential inputs cost far more than in August 2025.
Cheaper than July, dearer than last year
Compared with July, prices for coke and refined petroleum products, the basket that covers fuel and coal products, fell 2.4%. Other chemicals and man-made fibres were 5.9% cheaper and electricity 2.0% cheaper.
Against August 2025, coke and refined petroleum products cost 20.9% more, chemical products 13.2% more and electricity 8.5% more. Road freight rose 11.9% and water 8.3%.
August’s monthly declines had not reversed increases that were already part of mines’ operating costs, the council said. Fuel-related inputs rose most over the year because mining remains exposed to swings in global energy markets, including risks from conflict in the Middle East, it said. Fuel also feeds into what mines pay for extraction, hauling and freight.
Source: Minerals Council South Africa, monthly input cost reports (latest published figure for each month). Chart: Rand Desk
Deep mines feel it most
Iron ore had the lowest input cost inflation of the mining industries in August, at 2.4%, followed by manganese ore at 3.3% and chrome ore at 3.4%. Coal matched the 3.7% for mining as a whole. Gold and platinum group metals (PGM) were highest, at 4.2% each.
Part of the gap comes from the greater depth of gold and PGM mines, the council said, and these operations rely heavily on energy and labour. It said the higher costs would squeeze margins and limit investment at these mines unless metal prices or production rose enough to absorb them, and could strain shafts that already cost more to run.
Fuel is the risk to watch
The council named October’s petrol price increase as a near-term risk. It said the index’s recent easing could stall or reverse in the coming months unless other inputs get cheaper. Fuel feeds straight into the cost of mobile equipment and transport, and suppliers, distributors and logistics firms may pass it on, the council said.
For lasting relief, the council said, the mining industry needs calmer international energy markets, slower increases in administered prices and better efficiency in electricity and logistics. Until then, it advised mining companies to plan for costs that stay high and volatile.
Three months of easing
August was the third month in a row in which the index slowed. According to the council’s earlier monthly reports, it rose from 1.2% in February to 2.3% in March, the first full month to reflect the conflict in the Middle East. Crude oil prices jumped, the rand weakened and chemical prices climbed that month. The index peaked at a revised 5.4% in May before slowing to 4.8% in June and 3.8% in July.
Winter electricity tariffs, which the council said usually lift electricity costs by 20% to 30%, applied from mid-June to mid-September. Electricity costs rose 27.8% month on month in June and by a further 5.5% in July. The September index will reflect only half a month of winter tariffs, the council said in its report for June.
