South Africa’s mining operators are racing against time to prepare for a nationwide lockdown starting at midnight on March 26 and running until midnight Thursday April 16 as the government tries to slow the spread of the COVID-19 virus. The priority is to ensure worker health and safety during the process while also ensuring where possible that operations are best prepared for business continuity once the lockdown ends. The 21 day lockdown announcement was made by the President of the Republic of South Africa, Cyril Ramaphosa, on 23 March.
Anglo American says it will review the detailed regulations relating to this action that are being published, including in relation to exemptions for certain business activities, and will issue a further statement in due course. “Anglo American’s priorities are the safety, health and wellbeing of our people and all those who interact with our business around the world. We recognise the critical role that our operations play in our host operating countries, including in terms of jobs and our local communities. We are therefore also working together with the Government of South Africa to ensure the continuity of our business where appropriate in order to minimise any unintended consequences of the announced lockdown.”
AngloGold Ashanti, which is in the middle of a process to sell its major assets in the country to Harmony Gold, stated: “The health and safety of our employees remains our first priority. AngloGold Ashanti is fully supportive of efforts to slow the spread of COVID-19, and is working alongside the authorities in this regard. As a result of the President’s order, AngloGold Ashanti will temporarily suspend production from its South African Operations for three weeks as of midnight on 26 March 2020. These operations will be safely placed into care and maintenance over that period. Plans will be developed to help safely regain production delayed by this shutdown, where possible. The South African operations include the Mponeng Mine, Mine Waste Solutions and surface rock-dump processing operations. These operations produced 419,000 oz for the year ended 31 December 2019. An agreement has been reached to sell these assets to Harmony Gold Mining Co, a transaction which is expected to close on about June 30 of this year, subject to certain conditions precedent. Both parties remain committed to the transaction.”
Rio Tinto stated: “At Richards Bay Minerals (RBM) in South Africa Rio Tinto will curtail production in compliance with a directive from the Government aimed at containing the spread of COVID-19. As a result, all mining operations at RBM will be halted by midnight on Thursday, 26 March, for 21 days. In line with the President’s directive, Rio Tinto will make arrangements for the furnaces to be put on care and maintenance in order to avoid damage to their continuous operations. At this time, it is too early to speculate on when operations will resume or on 2020 production guidance. Resumption of the construction of the Zulti South project will be delayed.”
South32 said it understands that businesses essential for the maintenance of power generation in South Africa are exempt from the lockdown adding, “We will work with the government to determine the impact of this exemption on our South African Energy Coal and South Africa Aluminium operations, given the role they play in the sustainability of Eskom’s generation network. We are seeking clarification from government that the lockdown will extend to South Africa Manganese and have commenced planning for our manganese ore operations and the remaining furnace at our Metalloys alloy smelter to be placed on care and maintenance. As a resultof the government’s announcement, we are withdrawing FY20 guidance for our South African operations and will update the market when further information becomes available.”
South32 Chief Executive Officer, Graham Kerr said: “Our response to COVID-19 is built around three areas –keeping our people safe and well, maintaining safe and reliable operations, and supporting our communities, all of which are critical to the future of our business. We have implemented a range of measures at all our locations to ensure the health and wellbeing of our people and communities, by reducing the risk of infection and the rate of spread, while maintaining day-to-day operations. To-date, we have not yet experienced production interruptions from COVID-19 at any other operations. We continue to monitor the impact of restrictions being placed on the movement of people and goods by governments across the world and will continue to update the market as appropriate.”
The Minerals Council South Africa says it recognises that, in announcing the three-week lock-down, the President and his government have had to take radical and pre-emptive steps to arrest as far as possible the further spread of COVID-19. “We recognise the quality leadership government is showing in South Africa’s attempt to ‘flatten’ the rate of infection and the burden on healthcare systems. The industry supports efforts to enforce social distancing, including confining most people to their homes to prevent social and non-essential business activities for the next three weeks.”
It adds that it recognises that the steps announced last night will potentially have a severe impact on the South African economy as a whole, including the mining industry. “The Minerals Council is engaging with senior government leadership over the detail of the lockdown where the industry is concerned. This will include the nature of essential services and what will be required in terms of care and maintenance for non-operating facilities. The Minerals Council is also exploring what will be required to prevent the lockdown leading to permanent damage of the industry. There are marginal and lossmaking mines that would likely be unable to reopen should they be required to close fully, without remedial measures.”
“In addition to the measures announced by President Ramaphosa last night, there are other creative solutions being explored, including by organised business as a whole, that could assist the survival and eventual recovery of the industry and the economy.”
MCSA says the mining industry “intends to be at the forefront of exploring these solutions, as we seek to ensure the long-term sustainability of our industry.”
