ANALYSIS: Agoa or not, the US needs SA’s platinum and other metals

South Africa’s rich geological endowment is its trump card against the Trump administration. The US simply needs our platinum group metals (PGMs) and other mined resources, and this has long been the case.

In 1986, the US Congress had to override a veto by then President Ronald Reagan to impose sanctions on South Africa’s apartheid state. But there were exemptions that provided a hard-currency lifeline to the regime in its dying days: platinum group metals (PGMs), gold and diamonds were exempt.

Four decades later, South Africa faces exclusion from the African Growth and Opportunity Act (Agoa) – effective from 1 January 2027 – which provided preferential access to the US market for qualifying products.

But the likes of PGMs and gold are not affected by Agoa, and this is a big deal as metals and minerals account for more than half of South Africa’s exports to the US.

“Several of South Africa’s most important mineral exports were not dependent on Agoa because the applicable US Harmonised Tariff Schedule lines already carried a zero ordinary customs duty,” the Minerals Council SA said in response to Daily Maverick’s queries.

“These include unwrought or powdered platinum, palladium, rhodium, iridium, osmium and ruthenium, as well as platinum-group metals in certain other primary forms. Accordingly, these products did not require an Agoa preference to enter the US duty-free, and the withdrawal of Agoa does not in itself impose a new ordinary tariff on them.”

This list also includes gold bullion and doré, silver bullion and doré, coal, iron ore, manganese ore, and chromium ore and concentrates.

Still flowing

Investec chief economist Annabel Bishop explained that only 7% of South Africa’s exports flow to the US, so the impact of being stripped of Agoa status will have a minimal impact on economic growth.

About 70% of South Africa’s exports to the US are minerals and metals.

The top destination for South Africa’s PGM exports in 2025 was the US, which accounted for about a third of the total, with a value of R64.4-billion. That was a significant increase over the R49.8-billion worth of PGMs that South Africa exported to America in 2024, according to Minerals Council data.

This was not just a function of prices: the quantity of PGMs South Africa exported to the US in 2025 rose 29% to 93.4 tonnes from 71.1 tonnes in 2024.

South Africa accounts for about 70% of global PGM production, and long before the term “critical minerals” came into vogue, platinum and its kin on the periodic table of the elements were critical to the US and global economy.

The primary industrial use of PGMs was and remains for catalysts that cap the emissions of harmful pollutants (but not greenhouse gas emissions) from vehicles.

And the catalyst for PGM demand that only South Africa’s Bushveld Igneous Complex could meet was the US Clean Air Act of 1970, signed into law by President Richard Nixon in an era when even conservative Republicans at least pretended to care about environmental issues.

Like the wider mining industry, South Africa’s PGM sector was ruthlessly exploitative under apartheid, relying on a system of cheap migrant labour drawn mostly from the former homelands.

But this exploitative arrangement, which saw hundreds of poorly paid black mine workers perish underground each year while underpinning the coffers of the apartheid state, provided the US with cleaner air.

Funhouse mirror

South Africa’s looming expulsion from Agoa is akin to the distortions of a funhouse mirror held up to this chapter of history.

Trump and his now-repudiated Maga movement have a racist nostalgia for apartheid South Africa and have baselessly accused the government here of committing “white genocide” and seizing white-owned farms, Zimbabwe style.

But hey, even while Trump falsely portrays the government here – which is a Government of National Unity, for crying out loud – as a racial commie oppressor, US vehicle manufacturers still need South African PGMs.

The internal combustion engine still rules America’s roads, and without South Africa’s PGMs, its vehicle industry would find itself floundering and scrambling.

With the clock now ticking on Trump and Maga, South Africa's loss of Agoa status will probably be temporary, and regardless, Americans still want the cleaner air that only PGM catalysts can provide if they still want to drive big bakkies and SUVs.

The mining industry’s exploitative apartheid past is now history, with wage hikes over the past few decades that have outpaced inflation and a relentless focus on the health and safety of its workforce.

Meanwhile, its hard currency earnings and the taxes that it pays are a boost to the coffers of a democratic government, and its black ownership levels have risen significantly.

For the mining sector as a whole, black ownership is now estimated at close to 40%.

South Africa’s geological riches, notably its PGMs, are a diplomatic shield and give the country an outsized importance in the global economy that far exceeds the size of its GDP.

As a lame-duck president, the odious Trump can squawk all he likes about a non-existent genocide and land seizures. The US can’t do without South Africa’s PGMs and other metals and minerals.

The flap over Agoa is just a sideshow, and like the crippled Maga movement in the wake of the crushing Republican hammering in this week’s US mid-term elections, it will soon pass. But South Africa’s dominance in global PGM supply and production will remain set in stone. DM