THE COVID-19 pandemic negatively affected all sectors of the South African economy, but perhaps among the hardest hit was the country’s junior mining sector, said Fin24.
“The initial lockdown had a huge impact on us as an industry, and impacted cash flow, given that unlike big companies, junior miners do not have big shareholders and easy access large capital resources,” said Fogwell.
Junior and emerging companies are considered as entities with an annual turnovers of not more than R500m, and players in the segment are spread across the mining spectrum, said Fin24.
“It is going to take a while to return to full production … to where we were pre-COVID-19. Companies will have to reset their businesses as demand locally and internationally is still slow and some markets not back on track,” Fogwell said.
Said Ayanda Bam, the co-founder and director of Mpumalanga-based coal mining firm Kuyasa Mining: “It must be remembered that junior companies were coming off a very low base when the pandemic hit, and the pandemic has now made things even worse”.
Data released by Statistics South Africa showed that annual mining production plunged 47% in April, which was the first full month of hard lockdown. The fall in production was largest in iron ore, which fell by 68.7%. Production of platinum group minerals was down by 62%, gold fell by 59.6% and manganese ore by 57%, said Fin24.
