---
title: "The recent commodity cycle has been a double-edged sword for SA economy"
description: "With one hand, the commodity gods giveth, but with the other they taketh away."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "MERRIMENT & MISERY"
author: "Ed Stoddard"
author_url: "https://www.dailymaverick.co.za/author/ed-stoddard/"
canonical_url: "https://www.dailymaverick.co.za/article/2026-08-12-the-recent-commodity-cycle-has-been-a-double-edged-sword-for-sa-economy/"
published: "2026-08-12T19:49:24"
lang: "en-ZA"
word_count: 870
---

# The recent commodity cycle has been a double-edged sword for SA economy

> With one hand, the commodity gods giveth, but with the other they taketh away.

By Ed Stoddard · Published 12 August 2026, 21:49 SAST

## Key points
- PGM producers posted huge profits (Valterra 16x, Northam ~700%, Implats 30x+), driving jobs, investment and big tax windfalls for the Treasury.
- Rising PGM basket prices outpaced modest cost increases, boosting profits, strengthening the rand and adding “tens of billions” in export revenue.
- Oil shocks from the Iran war pushed crude – and inflation – higher (CPI 3%→5%), hurting consumers, business confidence and growth.
- Platinum and palladium have since fallen (≈‑23% and ≈‑35%), miner shares slid, trimming Treasury gains and investor returns.

## Content

South Africa’s economy is reaping both a windfall and a harvest of sorrow from the recent commodity cycle, and key producers are almost printing money from this mix of merriment and misery.

First, the good news: South Africa’s platinum group metals (PGM) producers are coining it, and this heralds wider benefits for the economy.

Valterra Platinum kicked things off last month, unveiling a 16-fold surge in H1 earnings – a sign of what was in the PGM results pipeline.

[REBOUND

Valterra’s cracking results bode well for SA’s PGM sector — and Treasury

July 29, 2026 ![Image](https://cdn.dailymaverick.co.za/i/YPOp4eHBZnxT3bZSd_3UqXKTG_Q=/450x0/smart/file/attachments/orphans/RC22JJAEC8GU_741324.jpg)](https://www.dailymaverick.co.za/article/2026-07-29-valterras-cracking-results-bode-well-for-sas-pgm-sector-and-treasury/)

Northam Platinum – which reports at the end of August – said in a trading statement on Tuesday that its headline earnings for the year ended 30 June were expected to surge around 700% to a record of more than 3,000 cents per share.

Impala Platinum (Implats) followed suit on Wednesday with a trading statement for the same period in which its headline earnings soared more than 30-fold. Such trading statements are a JSE requirement if companies are reasonably certain that their results will be at least 20% higher or lower than the previous comparable period.

This is all largely a reflection of the rebound in the PGM price in the periods covered by these results. Northam, for example, reported a 57% increase over the previous year in the basket price of the PGMs it produced, along with an 8% rise in the amount of metal sold.

Meanwhile, its unit cash costs rose by 6.4%. And if costs are relatively stable or rise by an amount dwarfed by the price spike for your product, the latter flows straight to the bottom line for a commodity producer, and the current picks up pace with each percentage-point rise in the price.

For South Africa, this is a win/win. The export dollars earned have helped to anchor the rand’s value this year, which in turn has helped to put the brakes on inflation.

Consequently, the Treasury, which has pointedly noted an uptick in corporate revenue collected, will get tens of billions of rands more this year from the sector as it strives to cap and then reduce South Africa’s debt levels. Valterra, in its reporting period, said its tax bill had surged 20-fold to R7.6-billion, with 90% of that paid in South Africa.

Such profits also justify expansion and the job creation this brings, such as Northam’s recent [completion of a new shaft](https://www.miningreview.com/news/northam-launches-new-shaft-extend-zondereinde/) at its Zondereinde mine near Thabazimbi.

### **Crude awakening**

With one hand, the commodity gods giveth, but with the other they taketh away.

Other commodity producers – notably big oil companies – have also done well of late, and that’s not been good for South Africa, including the PGM sector.

According to a [recent report in The Guardian](https://www.theguardian.com/business/ng-interactive/2026/aug/04/revealed-major-oil-firms-make-93bn-profits-amid-war-and-climate-crisis), eight of the biggest oil companies in the world made more than $90-billion in profits over three months as the Iran war and the closure of the Strait of Hormuz set prices ablaze.

“The data suggests the eight oil companies – Aramco, BP, Shell, Equinor, TotalEnergies, Eni, Chevron and ExxonMobil – made more than $700,000 of profit every minute over the (northern) spring quarter,” the report said.

The ill-conceived Iran war – which has no end in sight – hatched by the US and Israel has burdened consumers and economies worldwide, including South Africa.

The surge in crude oil prices was the main driver behind South Africa’s annual inflation rate rising to 5% in July, up from the Reserve Bank’s 3% target in February. And the mists of uncertainty shrouding the unfolding conflict have undermined global and domestic forecasts for economic growth, weighing on consumer and investor confidence.

But oil companies have had a field day – your pain has been their gain.

It has also been a pain for PGM producers and, by extension, South Africa’s economy more widely.

While the fundamentals behind the PGM rally still hold – a brighter outlook for internal combustion engines, signs of flagging demand for EVs that require no PGMS, tight supplies after years of underinvestment in the sector – the impact of the Iran war has taken a lot of wind out of its sails.

The platinum price is down around 23% from its recent peaks in February, while palladium has sunk about 35% over the same timeframe.

This is mirrored in the share prices of PGM producers. Northam’s, for example, has fallen about 38% since its recent highs in February.

It’s hard to say what PGM prices and the value of producer shares would have been if the Iran conflict had not been launched. But it’s safe to say they would have been much higher and profits to the end of June – and revenue for the Treasury – would have been even higher.

Viewed through this prism, the war has destroyed the value of investors on the JSE, which includes domestic pension funds such as the PIC, while curbing a windfall for the Treasury. It has unleashed the sharp edge of the commodity sword onto the economy, cutting many of the benefits wielded by the other side.

It’s a commodity conundrum, and South Africa’s economy remains exposed to the many twists and turns the cycle takes. **DM**