THE recent boom in gold and platinum group metal (PGM) prices is set to provide the South African fiscus with a much-needed boom over the next few years.
A report released by RMB Morgan Stanley last week shows that income taxes and royalties from the South African mining sector are set to rise from R30bn in 2024 to about R40bn in 2025.
For 2026 the tax intake from mining is set to double to about R80bn and then an estimated R90bn in 2027. This will come as a major boost to the South African government which is struggling with a shrinking taxpayer base and stagnant tax income as a result of low growth rates in most other economic sectors.
National Treasury reported in November last year that its revenues from the PGM and gold sector have already exceeded initial estimates. As PGM and gold prices have continued to surge since then, the impact will be substantial.
Ordinarily, mining constitutes approximately 10% of corporate income tax, though this picked up temporarily in 2022 when it amounted to 40%. That windfall tax intake then was driven primarily by PGMs and it will do so again, together with gold, for the next two tax years, says RMB Morgan Stanley.
“If spot prices hold, we’re heading back into windfall territory for 2026 and 2027, driven by PGMs and gold,” says the report. It also noted that Sibanye-Stillwater with combined income tax and royalties amounting to R16.4bn is set to become the largest taxpayer in the sector, though this may be impacted by assessed losses.
In its 2025 Facts & Figures Pocketbook, the Minerals Council SA confirms the buoyant picture for South Africa’s precious metals industry.
The MCSA projects South African gold sales to around R167bn, 17.4% higher than in 2024. PGM rand-based price increases last year amounted to about 30% for both platinum and rhodium and 13% for palladium, providing a significant profit boost to South Africa’s PGM producers.
The picture looks different for the coal sector. Collectively, Exxaro, Thungela and Glencore paid tax of R25bn in 2022. That’s set to fall to R3bn at current spot prices, estimates RMB Morgan Stanley.