The warning signs for the mining industry are ominous as the COVID-19 pandemic intensifies and the entire world moves into lockdown. South Africa’s decision to close its mines for 21 days is unprecedented but, unfortunately, very necessary to help contain the virus. It is also a responsible move that in all likelihood will be mirrored in other African countries.
In these times, the likes of which most of us have never experienced, a strong, united approach is needed throughout the continent to combat the virus, protect the mining industry as best as possible and support the lives of the millions of people that rely on the industry directly or indirectly. Governments need to work closely with industry bodies, mining companies, employee groups, unions, communities and suppliers to best support the entire industry and ensure that when the threat is over, the industry can move on stronger than ever before.
This week’s move by South African President Cyril Ramaphosa provides a stark reminder of the severity of the developing health crisis in a nation whose economy was built on mining, and particularly gold mining. While that industry has declined, South Africa accounts for 75% of the world’s platinum and 38% of palladium supply, and also produces minerals from gold and manganese to chrome and iron ore.
Of course, mining also plays an important, and growing, role in the economies of many other African countries and, as in South Africa, the livelihoods of many people.
Minerals Council South Africa chief executive officer Roger Baxter said: “This would be unprecedented in the history of mining in South Africa. There were certain times when components of the industry were closed, for example during the Second World War, but this is unprecedented.”
South Africa’s army will help the police to enforce the lockdown that will start midnight Thursday, Ramaphosa said. Grocers, pharmacies, banks and filling stations will be allowed to remain open, while the Johannesburg Stock Exchange and other essential services can continue operating.
“Companies whose operations require continuous processes such as furnaces, underground mine operations will be required to make arrangements for care and maintenance to avoid damage to their continuous operations,” Ramaphosa said.
These measures have seen The African Mining Network postpone the networking event scheduled for Johannesburg on Thursday 23 April to Wednesday 20 May with the scheduled guest speaker Mike Teke agreeing to the change. The new date is, of course, pending further developments on the current global pandemic situation, which is changing by the hour.
Fitch Country Risk & Industry Research sees increasing downside globally as the coronavirus continues to spread and increase chances for persistent operational delays. Despite the fact mining operations tend to be in more remote locations, Fitch sees increasing scope for reduced personnel flow and supply chain disruptions due to government actions leading to a reduction or halt in mine production.
"As countries grapple with how to contain or slow the spread of the virus, we expect this could lead to operational disruptions at mining operations. This inherently raises a downside risk to our mineral production forecasts globally should these disruptions be prolonged," Fitch analysts said. We are seeing increasing operational disruptions globally and Fitch expects this will rise as countries implement quarantine efforts to contain the virus.
With the state of the pandemic constantly changing, global measures will intensify and it is vital that the pandemic is taken seriously and that measures taken by governments be adhered to.
As well as taking all precautionary measures, it is also important that the industry, in conjunction with government, takes steps to minimise the effects of any future incidents. “The outbreak of COVID-19 brings about the need for the Department of Mineral Resources and Energy to accelerate work on the Mine Health and Safety Amendment Bill, which should address measures to be taken in the event of pandemics like COVID-19 in the future,” said chairperson of South Africa’s Portfolio Committee on Mineral Resources and Energy Sahlulele Luzipo.
Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:email@example.com