Mining Rout Drags JSE Lower as Budget, Eskom and Empty School Highlight National Fault Lines
South African markets closed firmly in the red on Tuesday, with a sharp sell-off in mining shares pulling the broader index down to its lowest level of the session. The decline comes at a moment when the country is juggling mixed economic signals: record precious metals prices and a stabilising fiscal outlook on the one hand, and persistent structural bottlenecks, from stalled public infrastructure to tense wage talks at Eskom, on the other.
The trading day on the JSE reflected that tension. While global commodity prices remain elevated and the rand has strengthened this year, domestic equities proved vulnerable to heavy resource losses. Beyond the markets, the spotlight has shifted to a newly built but unopened public school in Hammanskraal and to wage negotiations at the power utility, both underscoring the implementation challenges that continue to define the economic landscape ahead of next week’s Budget Speech.
Markets: Resources Weigh Heavily
The FTSE/JSE All Share Index fell 1.30% to close at 119,410 points, down 1,579 points from the previous session. The index opened at 120,385 and gradually lost ground through the day, finishing at its intraday low, a sign of consistent selling pressure rather than a late reversal.
The decline was concentrated in mining counters. The Resource 10 index dropped 3.94%, significantly underperforming other sectors. Gold shares led the losses. AngloGold Ashanti fell 3.83%, Gold Fields declined 5.88%, and Harmony Gold shed 5.02%. Sibanye-Stillwater and DRDGOLD were also weaker. The scale of the pullback in large mining stocks dragged the Top 40 Tradeable index down 1.40%.
Elsewhere, the picture was more contained. The All Share Industrials index edged 0.08% lower, while the Industrial 25 slipped just 0.02%. The Financial 15 index ended flat. Listed property provided modest support, with the SA Property index rising 0.35%. Mid-cap and small-cap stocks also declined, though less sharply than resources.
Despite Tuesday’s fall, the broader trend remains positive. The All Share index is still up 18.06% year to date and 8.17% over six months. Over a one-year period, gains stand at just over 3%, with stronger cumulative growth over three and five years.
In currency markets, the rand traded at R16.02 to the US dollar in early Wednesday trade, largely unchanged from the previous close and nearly 9.3% stronger year to date. Commodity prices moved higher, with gold up 0.84% at $4,918.45 an ounce and platinum and palladium also firmer. Brent crude edged up to $67.56 a barrel.
Global markets were mixed. Japan’s Nikkei traded higher at 57,228, while US indices closed firmer overnight, including the S&P 500 at 6,843 and the Dow Jones Industrial Average at 49,533. Cryptocurrency markets were relatively steady, with Bitcoin slightly lower at $67,566.
A New School, But No Pupils
Away from financial markets, attention has turned to Hammanskraal, north of Pretoria, where a new public primary school stands complete but unused.
Ratanang Primary School in the Kanana area was finalised at the end of 2025 as part of the Gauteng Department of Education’s drive to modernise schooling infrastructure.
The campus was designed to serve more than 1,100 pupils and includes 28 classrooms, computer labs, sports facilities, a multifunctional hall, and a dedicated early childhood development section. Backup power, water systems, CCTV, and fire safety installations were built into the project.
However, months after completion, learners have yet to enter the classrooms. According to City of Tshwane MMC for Economic Development and Spatial Planning Sarah Mabotsa, the school cannot legally be occupied because several compliance certificates remain outstanding.
These include health and fire approvals, environmental sign-offs, engineering certifications, and an electrical certificate of compliance.
Building plans were first submitted in 2018, and municipal authorities requested corrections, additional documentation, and zoning relaxations due to building-line encroachments. Mabotsa said there are no interim measures that would allow occupation while legal processes are still incomplete.
The delay has drawn criticism from opposition parties, who argue that bureaucratic hurdles should not stand in the way of learners accessing facilities that are already built and equipped. The Gauteng Department of Education had not provided an updated timeline for resolution by the time of publication.
Eskom Wage Talks Reach Deadlock
Labour tensions have also resurfaced at Eskom. Two major unions — the National Union of Mineworkers and the National Union of Metalworkers of South Africa — have rejected an improved 6% wage increase offer from the power utility.
The NUM has reduced its demand from 15% to 12%, still well above the 3.6% inflation rate recorded in December. Union leaders argue that workers played a central role in stabilising generation capacity and bringing load-shedding to a halt.
Further negotiations are scheduled. Eskom recently reported its first annual profit in eight years following improved operational performance at coal-fired power stations and is seeking another multi-year wage agreement after concluding a three-year deal in 2023.
Mining Momentum and Structural Constraints
The sharp market reaction in mining counters contrasts with the continued strength in global precious metals prices. February has placed the sector under renewed focus, with the Investing in African Mining Indaba, the State of the Nation Address, and the forthcoming Budget Speech all highlighting mining’s role in economic growth.
Higher metal prices have boosted mining sales and supported the trade balance, but production volumes have shown only limited long-term growth.
Exploration spending remains subdued, raising concerns about future project development. Infrastructure constraints, particularly rail capacity and electricity costs, continue to affect output, even as supply reliability improves.
The government has begun implementing a new mining cadastre aimed at improving transparency and efficiency in the allocation of rights, though the rollout has been slower than initially planned.
Budget Balancing Act
Next week’s Budget Speech will test how fiscal plans align with spending pressures.
The 2025 Medium Term Budget Policy Statement projected that gross government debt would stabilise at 77.9% of GDP in the current financial year, marking the first pause in the upward trajectory since 2009.
The National Treasury has recorded primary surpluses over the past two years, meaning tax revenue has exceeded non-interest spending. At the same time, demands for increased funding in areas such as infrastructure, policing, and municipal support remain significant.
Borrowing costs have eased in recent months, with government bond yields declining as investors respond to improved fiscal projections and a lower inflation environment. However, the balance between fiscal discipline and service delivery will remain central to the minister’s address.
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