Dr Azar Jammine
Speaking at the AfriSam Budget Breakdown, economist Dr. Azar Jammine noted that while the war involving Iran is disrupting global trade routes, energy supplies and transport networks, the resulting surge in precious-metal prices could unexpectedly benefit South Africa’s mining sector. The Dubai International Airport – the world’s busiest airport by international passenger traffic – has very limited flights. Traffic through the vital Strait of Hormuz has reached a near standstill. The Persian Gulf countries play a critical role in supplying the world with crude oil, refined fuels, natural gas and fertiliser feedstocks. Much of this production must pass through the Strait of Hormuz, making it one of the world’s most important energy chokepoints, carrying roughly a fifth of global oil and liquefied natural gas supplies, as well as around half of the world’s seaborne sulphur trade. Any disruption to this corridor reverberates across global supply chains, pushing up energy prices, delaying shipments and increasing transport costs. As energy and raw material prices rise, industries ranging from manufacturing and agriculture to transport and chemicals face higher input costs, which ultimately filter through into global inflation and slower economic growth. As a consequence, interest rates will not decrease, but will either remain the same or even increase.
The Iran conflict has added a geopolitical risk premium and pushed Brent crude oil above about US$86 a barrel in recent days.
Impact on South Africa
Like the rest of the world, South Africa can expect higher fuel prices and a negative impact on inflation. The hoped-for 3% inflation rate is likely to slip out of reach. Another cut in the repo rate now appears unlikely. Fortunately, South African fuel prices are currently relatively moderate compared with recent years, with inland 95-octane petrol sitting at around R20 per litre in early 2026, significantly below the record highs of more than R26 per litre reached in mid-2022 during the global energy crisis.
A boon for SA economy
With the ongoing war involving Iran, alongside the Russia–Ukraine war and the Palestinian conflict, government spending on defence and security is rising sharply, pushing public debt levels to record highs. Global debt has already surpassed US$300 trillion. At the same time, geopolitical instability is driving investors and central banks toward traditional safe-haven assets. Gold and other precious metals such as silver and platinum typically see stronger demand during periods of conflict and political uncertainty, as investors shift capital away from riskier assets like equities. Recent tensions in the Middle East have already renewed interest in these metals, with analysts noting that heightened geopolitical risk tends to support higher precious-metal prices as investors seek assets that preserve value during market volatility.
Platinum group metals lost some favour a few years ago as a result of the move towards electric vehicles and cleaner energy. Under the Trump administration, there is renewed interest in internal combustion engine vehicles that has prompted greater demand for these metals.
The increase in revenue from precious metals is projected to be in excess of R350-billion.
| Precious metal | Price beginning 2025 (US$/ounce) | Current price (US$/ounce) | Change in price (%) | Production (million ounces) | Increase revenue (billion US$) | Increase revenue (billion R) | Increase revenue precious metals (billion R) |
| Gold | 2705 | 5222 | 70 | 3.5 | 2517.00 | 31079.08 | 108,766.78 |
| Platinum | 948 | 2366 | 143 | 4.3 | 1418.35 | 22184.54 | 95,393.52 |
| Palladium | 964 | 1793 | 87 | 2.5 | 828.86 | 13714.10 | 34,285.25 |
| Rhodium | 4650 | 11950 | 115 | 0.7 | 7300.00 | 87740.00 | 61,418.00 |
| Total | 12064.21 | 154717.72 | 299,873.55 |
The increase in gold reserves over the past three decades since the global financial crisis
If these gains translate into new mining investment, the knock-on effects could support infrastructure development, manufacturing activity and demand for construction materials such as cement. Mining production is 10% below 2010 levels. South Africa’s mining sector continues to face significant regulatory hurdles that are constraining investment and limiting growth. Uncertainty around mining legislation, slow licensing processes, and complex compliance requirements have made it difficult for companies to plan and execute long-term projects. However, growing global demand for critical minerals, together with ongoing efforts to streamline licensing systems and improve regulatory certainty, presents an opportunity for the sector to regain momentum and re-establish itself as a key driver of economic growth. 
