What does Sulphuric acid have to do with the price of silver and the SA economy?

Sulphuric acid doesn’t generally make headlines. It doesn’t trend on social media. It’s not the kind of thing that comes up at the dinner table. But it’s critical to the modern economy: copper mining, fertiliser production, nickel extraction, oil refining, and more.

And right now, a perfect storm is forming that investors in mining, agriculture, and commodities cannot afford to ignore.

Two shocks hitting the production of sulphuric acid at once

Firstly, sulphuric acid is made from sulphur, and the Middle East produces roughly a third of the world’s sulphur as a by-product of oil and gas refining.
That sulphur must be shipped out through the Strait of Hormuz. With the strait closed since February 28, sulphur prices have surged approximately 70% since the start of the conflict.

Less sulphur means less acid. Less acid means less copper, less fertiliser, and cascading problems across the entire industrial supply chain.

Then came the second and most recent shock.

China has now confirmed it will halt all exports of sulphuric acid from May – covering both smelter acid and sulphur-based acid – with the only exception being high-purity electronic-grade acid. The ban could last the entire year.

China exported 4.6 million tons of sulphuric acid in 2025. That supply is about to disappear from the global market.

Whose economy gets hit hardest

The impact isn’t evenly distributed. Some countries and industries are far more exposed than others.

#1: Chile is the most vulnerable major economy. The world’s largest copper producer imports over 1 million tons of Chinese sulphuric acid every year. Roughly 20% of Chilean copper output uses a process called heap leaching, which requires large and continuous volumes of acid to dissolve copper from crushed ore.

And there’s no quick substitute.

#2: The DRC and Zambia – home to the African Copperbelt – face parallel vulnerabilities. These operations rely heavily on imported acid for processing, and alternative sources are limited.

The DRC’s Kamoa-Kakula, one of the world’s largest copper mines, produces around 1,600 tonnes of sulphuric acid per day as a by-product of its on-site smelter – and sells that acid to neighbouring copper mines that depend on it to operate. Those buyers are now scrambling.

#3: Indonesia’s nickel sector is also in the crosshairs. The country’s expanding nickel production uses hydrometallurgical processing that requires consistent acid supply.

Indonesia received 15% of China’s sulphuric acid exports in 2025.

#4: Morocco and Saudi Arabia, which each received 12% of Chinese exports, will feel the squeeze too – particularly Morocco, which is a major phosphate fertiliser producer. Sulphuric acid is essential for converting phosphate rock into fertiliser.

The copper and silver connection

For investors in copper, the implications are direct and bullish. Less acid means lower output from heap leach operations across Chile and Africa. That production shortfall flows through to tighter copper supply at exactly the moment when demand from AI infrastructure, EVs, and electrification continues to accelerate.

But the knock-on effect most investors are missing is silver.

Approximately 70% of newly mined silver comes as a by-product of copper mining. When copper output slows due to acid shortages, silver supply slows with it. The silver market was already running a structural deficit heading into 2026 – demand exceeding new supply for the sixth consecutive year.

A further squeeze from reduced copper output could turn that deficit into a genuine price event, particularly given silver’s irreplaceable role in solar panels and EV manufacturing.

The food price wildcard

Sulphuric acid is essential for producing phosphate fertilisers.

Morocco – a major global fertiliser exporter – has just lost access to its Chinese acid supply. The Middle East disruption to sulphur has also squeezed feedstocks independently.

The combination hits fertiliser supply chains during peak planting season in the northern hemisphere.

Higher fertiliser costs mean higher food production costs. That feeds directly into grocery prices, already elevated across most of the world due to oil-driven inflation.

What this means for SA specifically

SA’s position in this story is more nuanced than most – and for local investors, that nuance matters.

The reassuring news first: SA is largely self-sufficient in sulphuric acid. The country’s major mining and smelting operations produce acid as a by-product of metals processing, making South Africa a net regional exporter rather than a desperate importer.

But there are risks that SA investors should not ignore.

The first is fertiliser. Agricultural chemicals – primarily fertilisers – account for roughly 68% of sulphuric acid consumption in SA, and the country imports sulphur feedstocks to produce that acid domestically.

With Middle East sulphur exports blocked through the Strait of Hormuz, the raw material SA uses to make its own acid is now more expensive and harder to source. That flows directly into fertiliser costs, and from there into food prices.

The second is regional contagion.

SA’s mining sector is deeply integrated with the broader African Copperbelt. If copper output in Zambia and the DRC is curtailed by acid shortages, that disrupts regional supply chains and logistics networks that JSE-listed mining companies with regional exposure rely on.

There is, however, an opportunity….

With China exiting the export market and global acid supply tightening, SA’s established domestic production capacity becomes strategically more valuable.

We’re already a recognised regional supplier. Rising global acid prices mean stronger margins for local producers, and a potential opening to deepen relationships with acid-hungry neighbours.

In a market defined by shortage, being a net producer is a significant structural advantage.