MINERALS Council South Africa warned of permanent damage to the country’s mining sector were the government’s 21-day lockdown, which is aimed at combating the spread of COVID-19 virus, extended in its current format.
According to an article by BusinessLive, the council issued a letter to members in which it said that the economic damage of the lockdown to the country’s economy was “profound”. There would be a 20% decline in mining production in April and a 4.5% decline for the year even after assuming a smooth resumption post the lockdown on April 17, it said.
“This excludes the costs incurred to place operations on care and maintenance and the circa R7bn in wages paid during this lockdown period,” the council is quoted to have said.
“At this stage it is not clear exactly what the government’s strategy is beyond the lockdown period and it appears we are reaching an inflection point where the economic damage of extending the lockdown will become permanent,” it said.
The South African government has allowed certain parts of its mining sector to remain operational, including essential services and those services where the likelihood of COVID-19 infection is limited, especially if social distancing measures were implemented – such as in the highly mechanised process of bulk mineral exportation.
But labour-intensive underground platinum and gold mining has been largely shutdown. Re-mining surface dumps has been largely allowed to stay open, and processing units of platinum group metal companies, which are not easily switched off, remain operational.
BusinessLive cited the council as saying it had been “fairly treated” by the Department of Minerals and Energy in its lockdown arrangements.
A meeting with the department and mines and energy minister, Gwede Mantashe, has been scheduled for Wednesday (April 8), the newspaper said.