The one thing Donald Trump is boosting in South Africa

While US President Donald Trump has taken an antagonistic stance towards South Africa and its laws, his chaotic style of governance has boosted the gold price—and local mining companies along with it.

Trump this week caused upheaval in South Africa with his controversial and inaccurate interpretation of the country’s expropriation laws, as well as his offer to accept white South African farmers as refugees.

The US president’s allegations of land grabs and discrimination against white people in South Africa was accompanied with a freeze on US aid to the country.

This was just one of the many swift actions taken by Trump in the early weeks of his second term as US president, with many other countries caught in his crosshairs.

He has been talking up land grabs of his own in places like Greenland, Panama and, perhaps most controversially, Gaza—while also adding fuel to the Russia-Ukraine war by seemingly taking a position of negotiating with Moscow without Kyiv or the EU’s input.

The Bureau for Economic Research (BER) noted that this was all topped by Trump’s continued push for a global trade war.

“Trump escalated his trade war tactics, raising tariffs on steel and aluminium imports to 25% up from 10% and eliminating all country- and product-specific exemptions,” it said.

“The measures take effect on 4 March, for now.”

The US president also announced a plan to impose reciprocal tariffs on countries that tax US imports for the sake of ‘fairness’.

The tariffs would match higher foreign duty rates and counter non-tariff barriers like regulations, subsidies, and exchange policies, the BER said.

This chaotic approach to global relations have had a concomitant impact on global markets, as well as within the US itself.

US inflation came in hotter than expected, which pushed the US Fed to take an even more hawkish approach to interest rate cuts. This will invariably have an impact on rate cuts in other markets, South Africa included.

However, the BER noted that Trump’s sporadic US policy announcements have also propelled the gold price to a record high, inching closer to the $3,000/ounce mark.

“Typically, high interest rates dampen gold’s appeal as a non-yielding asset, and the Federal Reserve’s ‘higher for longer’ stance would be expected to restrain the rally,” the group noted.

“However, persistent market uncertainty – exacerbated by the Trump administration’s shifting tariff policies and unpredictable timelines – continues to drive demand for safe-haven assets.”

US stocks have declined, while 10-year Treasury yields climbed 10bps to 4.6%. South Africa’s 10-year bond yield followed suit, rising 11bps.

Through all this, though, the JSE ALSI ended the week on a positive note—with gold mining companies in particular benefitting from the prolonged surge in the gold price.

A boost to the gold price and local mining companies cannot downplay the disappointing mining data, however.

Stats SA published the latest mining production data from December 2024, showing a year-on-year decline of 2.4%, going against expectations for growth.

PGMs declined by 7.1%, subtracting 2.7%pts, and gold production declined by 8.4% (-1.1%pts).

On a month-on-month basis (seasonally adjusted), mining output declined by 3.9% in December.

This meant that 2024Q4 production was 0.3% lower than in Q3, with the largest declines coming from manganese (11%, -0.8%pts) and iron ore (4.6%, -0.6%pts), the BER said.

PGMs and coal production both contributed 0.8%pts, as they grew 2.5% and 3.8%, respectively.

The one bright side of the data is that mining production still grew by 0.4% in 2024 compared to 2023.

There was only growth of 0.1% in 2023 and a significant decline of 7.8% in 2022.