South Africa's mining industry prepares for Covid-19

Lena 2020-03-25

South Africa's mining industry prepares for Covid-19

About 2 billion years ago, an asteroid hit the earth about 120 kilometers southwest of Johannesburg. This picturesque area, now known as Vredefort Dome, is hailed as a World Heritage Site and its long-term influence has laid the foundation for the Witwatersrand Gold Mine.

A metaphorical asteroid is now violently impacting the global economy in the form of a coronavirus pandemic, and it has also had an earthquake impact on those gold fields and mining industries in South Africa, triggering commodity prices and stock prices for listed mining companies. turmoil.

Commodity prices have been falling as the dual supply and demand shocks of this potential depression have reverberated in the world economy. To give an obvious example: Palladium price was a rock star at the beginning of the year and has fallen by a third over the past four weeks to less than $ 1600 per ounce.

This, in turn, hit stock prices. Over the past four weeks, Sibanye-Stillwater's stock has fallen by more than 60%, Impala Platinum's stock has fallen by a similar percentage, Anglo American's stock has fallen by 40%, and so on. Driven by rising prices and a series of cost reductions, the industry's performance is brilliant overall, and has been paying dividends.

Indeed, the industry has only just begun in just a decade after the global financial crisis. Generally, low prices, high labor and power costs, and a series of social and labor turmoil rooted in the sector's long history of exploitation have shaken its foundations.

The 2012 Maricana massacre, the five-month platinum strike in 2014, policy inertia and uncertainty, and widespread layoffs: all of these coincide with the "lost year of Zuma". Mining in South Africa has been hit hard. However, it still exists, and several companies have flourished in the past few years.

The party is now temporarily over, and given the frenetic pace of events in this unknown area, it would be annoying to say where it came from.

But it is clear that the mining industry is more susceptible to Covid-19 than many other industries, and a few weeks ago it suddenly seemed very reasonable and it seemed incredible.

According to the South African Minerals Board, the industry employs nearly 420,000 employees, many of whom work underground daily. Some mines buried thousands of men and women underground, plunging into crowded "cages." Before and after, there are miners everywhere in the locker room that can work shifts or clean up afterwards.

Correspondents are not virologists, but it is difficult to imagine a more favorable working environment than South Africa's mining industry. Most of these laborers are still immigrants, with constant movements between the gold and platinum belts and Lesotho, Mozambique and the Eastern Cape. Today, most homes are located outside the mine, which has had a huge social impact on the crowded old hotel system.

Obviously, this is also beneficial for the virus infection rate, as many communities appearing around the mines are still crowded in shanty towns. These communities could then experience social unrest. Even before Covid-19 appeared, the eastern edge of the platinum band had been boiling for years. This is a fire that does not require more fuel.

In recent years, the industry has established some immunity. Its disease burden has been greatly reduced. According to the Minerals Commission, the incidence of silicosis and tuberculosis has increased by 74% and 63% in the decade to 2018, respectively. This will reduce the lethality of virus transmission.

Business Maverick, who has contacted mining companies such as Sibanye, said they will share their pandemic plans later this week. Anglo American Platinum says it is taking the following precautions, including:

Screen all visitors to our offices and operations to assess health and recent travel history;

our offices and operations allow visitor restrictions;

travel restrictions to and from high-risk countries, and cancellation of unnecessary travel, including domestic travel ; And

self-isolation and testing of employees, contractors and service providers who have recently traveled to high-risk countries.

Some people believe that almost all employees of mining companies traveling abroad do not work underground every day, which reduces the possibility of the virus infecting ordinary employees.

The Minerals Commission, which represents the industry, convened a special committee meeting on the crisis this week, outlining the steps: "Strengthening the implementation of the ten-point plan that has been in place since the beginning of the virus." This includes staff education, flu vaccination and surveillance.

"In carrying out these tasks, the Special Committee meeting recognized that the situation in South Africa, and in particular the situation in the mining industry, requires a special approach. For example, self-quarantine by the mining community or self-quarantine requires different isolation in the suburbs. The industry is studying the provision or support of isolation facilities, "the Minerals Commission said.

It said that in a popular initiative, the services provided by mining hospitals could be extended beyond employees in the industry. These facilities are often located in areas with poor community medical services.

"Covid-19 patients are being examined to check their use in existing mine hospital wards, which already have expertise in TB screening and treatment, including XDR TB. This may exceed the industry employee's Scope, and may establish regional partnerships with state medical institutions. Certain mines. "

At this stage, many things remain unanswered.

For example, would landmines sending hundreds of people underground limit these numbers? Can isolation facilities be established within a few weeks? Will conditional workers be left at home?

It is speculated that mechanization and open pit mining provided less fertile soil for the spread of the pandemic, but in the case of one of these sites, severe action may still be taken, including shutdowns. But for now, the focus seems to be on isolating infected employees.

So far, there have been no reports of infections in South Africa, and hopefully this situation will continue. If the industry had to shut down, it would cut about 8% of GDP (including GDP). In any case, coupled with a rough forecast of a sharp contraction, the economy could fall into a full depression.

News reference: