by Ina King (Potgieter) April 16, 2020
Following three weeks of lockdown, the mining industry is continuing the slow and uncertain return to full production, in the shadow of the COVID-19 pandemic.
Extensive talks between the Department of Mineral Resources and Energy (DMRE), Trade Unions and the Minerals Council of South Africa seemed to lay at least an initial blueprint for miners to return to work. But then Sibanye-Stillwater and Impala Platinum miners returning to the platinum mines around Rustenburg on Tuesday (14 April) were met with a police blockade that prevented the planned resumption. This despite Sibanye’s DMRE approval to return to operations this week.
With South Africa responsible for around 70% of the world’s mines platinum production (along with 35% of palladium), the immediate fate of these mines’ activities is of global significance. Already, the reduction in global supply could be as great as 5%.
We will have to wait and see how the impact of the lockdown has impacted annual production guidance for the country’s mineral industries, but it will be significant. Besides coal mines supplying Eskom, Kumba iron ore mines, several open-pit and mechanised mines and select chrome mines, most mines operate with only skeleton staffs manning essential operations and equipment. Mining houses such as Sibanye-Stillwater, Anglo American and Impala Platinum saw a share price drop between 40 – 60% around the lockdown.
While the situation is extremely both delicate and turbid, one thing is certain: contributing approximately 8% to the country’s gross domestic product and employing almost 420 000 people, it’s economically imperative for the industry to get back on its feet, fast.
South Africa’s approach to lockdown has been lauded across the world’s health and scientific communities in the impact it seems to have had in flattening the curve to date, with new infections having slowed to just 4% (down from 42%).
Although economically devastating, it has bought the country time to prepare equipment and facilities to cope with the inevitable surge of the pandemic as we head into winter. And with a vaccine still an estimated 12 to 18 months from development, we head into a world with a new norm far more sensitised to hygiene and social distancing.
In mining, this adds an additional layer to the engrained health and safety matrix practised by workers across the industry. COVID-19 preventative measures will include screening, increased hygiene solutions and new physical distancing policies, although how this plays out in cramped underground environments is likely to remain a challenge.
The global economy faced multiple variables that impacted the loss of commodities’ value, with COVID-19 leading a great deal of this massive decline.
Commodities such as gold, coal, copper, iron ore, nickel, aluminium and platinum, as reported, suffered losses between 2.82% - 38,34% during the first 3 months of 2020.
Initially, even that historical safe-haven commodity gold wasn’t been spared, falling from a peak of $1 697/oz. on 8 March, to trade at $1 467 on 19 March (a decline of over 13% in less than 2 weeks), although it has since rebounded to a current bullish $1 719.57, in a commodity move only gold could script.
PGMs like palladium, which had achieved breath-taking recent performances due to increased demand from motor vehicle manufacturers, has fallen over 30% from its high of $2 714 in mid-February earlier this year.
This graph shows how some commodities have performed in light of the COVID-19 outbreak:
A report released by economic research institution Trade and Industrial Policy Strategies (TIPS) pre-empted significant losses to the South African mining industry if the coronavirus is not contained within April 2020.
Although the virus is vicious and far-reaching in its spread, with recessionary effects being likely within the first six months following outbreak (now compounded by Moody’s downgrade of the currency to junk status), analysts are relatively optimistic that once the virus has peaked and contained, the recovery period could be relatively swift.
South Africa's Minerals Council continues to explore what is required to prevent permanent damage to the sector, in preparations for the worst possible outcomes.
For now, over the next few weeks it’s going to require a fluid, agile and carefully managed resumption of operations as the South African mining industry reopens for business and the economy splutters back to life.
AMIQ tracks close to 2 000 mining projects across Africa. If you want to invest in mining, if you want to invest in Africa, if you provide product or services to mines in Africa, you need AMIQ intel. Subscribers to AMIQ’s mining intelligence database can identify where investor confidence is flourishing.
Africa Mining IQ has created various analysis reports to provide you with an overview of mining projects in Africa by region, mineral type, and plant type. You can use these reports to analyse growth potential in developing commodity markets and better strategically plan your business development efforts. Africa Mining IQ provides a complete project report for each of the over 1 900 African projects we track, including everything from historical and up to the minute commentaries to contact details for suppliers, engineers and mine owners.
AMIQ has 170 company subscriptions, 20% of which are international. It is becoming easier to do business across the globe. AMIQ is for anyone who supplies a product or provides a service to mines. With key contact details, and being in the know in the early stages of project development, you can build meaningful relationships with the right people and position yourself early for a successful bid for mining projects in Africa. Keep a close eye on developing projects aligned to your business and identify projects, with weekly or monthly alerts. Don't delay, subscribe to AMIQ today and reap the rewards of comprehensive African mining project intelligence.
Contact Africa Mining IQ today on +27 11 830 2132 to target business opportunities in Africa's growing mining industry!
+ Quick Links
Chrome Mining in South Africa
Coal Mines in South Africa
Coal Mining in South Africa
Diamond Mining in South Africa
Gold Mining in South Africa
Impala Platinum Mines
Kumba Iron Ore
List of South African Mines
Mines in South Africa
Mining Activity in South Africa
Mining Industry in South Africa
Mining in Limpopo
Mining in Mpumalanga
Mining in South Africa
Platinum Mining in South Africa
South African Mines Contact Details
South African Mines Directory
Mining in Southern Africa
Mining Business Opportunities in SA
Mining Business Opportunities in SA
Mining in Limpopo
Mining in Mpumalanga
Copper Mining in Zambia
Copper Mining in Africa
Anglo American coal mines South Africa
Biggest mining companies in Africa
Coal Mining Companies in South Africa
Chrome Mining Companies in South Africa
Mining Companies in Angola
Mining Companies in DRC
Mining Companies in Gauteng
Mining Companies in Ghana
Mining Companies in Johannesburg
Mining Companies in Mpumalanga
Mining Companies in Rustenburg
Mining Companies in South Africa
Mining Companies in Zambia
Mining IQ Xstrata Mines
New Mining Companies
Smallest Mining Companies in Africa
Top Mining Companies in Africa