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South Africa miners seek 'creative solutions' as lockdown looms

Miners are exploring “creative solutions” to assist the survival and eventual recovery of the industry and economy, the Minerals Council South Africa said as the country prepares to enter a 21-day lockdown.
South Africa miners seek 'creative solutions' as lockdown looms South Africa miners seek 'creative solutions' as lockdown looms South Africa miners seek 'creative solutions' as lockdown looms South Africa miners seek 'creative solutions' as lockdown looms South Africa miners seek 'creative solutions' as lockdown looms

Gold Fields is preparing to put its South Deep mine in South Africa on care and maintenance for the 21-day nationwide lockdown

Staff reporter

"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," the council said yesterday.

Meanwhile the platinum and palladium prices have both gained more than 10% as mines in the country responsible for much of the precious metals' production prepare to go on care and maintenance.

President Cyril Ramaphosa announced the nationwide lockdown this week, set to start at midnight on Thursday, in a bid to prevent the spread of the COVID-19 pandemic.

"We recognise 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 said.

South Africa-based miners have nonetheless voiced support for the lockdown.

"It is a painful, but necessary and bold decision and one that we support to the fullest," Gold Fields (JSE: GFI) CEO Nick Holland said.

The company said its South Deep mine in South Africa would be put on care and maintenance from March 27 and it was seeking permission for activities including pumping and essential plant maintenance to continue.

Gold Fields said the majority of workers would be sent home and would continue to receive their base pay during the 21-day period, which was expected to result in 16,000 ounces of lost gold production.

Harmony Gold Mining (JSE: HAR) warned the directive would "impact negatively" on its annual production guidance of 1.4 million ounces and its FY2020 earnings but CEO Peter Steenkamp said the health and wellbeing "of all South Africans must take precedence".

"This is an unprecedented time in the history of the mining industry and our country," he said.

Impala Platinum (JSE: IMP) said it supported the shutdown and said as a major employer, it was  engaging with the government to ensure the sustainability of the group "and mitigate, where possible, the negative socio-economic outcomes of the shutdown".

AngloGold Ashanti (JSE: ANG) said its South African operations, which Harmony is acquiring and had produced 419,000oz in 2019, would be placed on care and maintenance for the lockdown.

It said both parties remained committed to the sale transaction.

The company said it was "fully supportive" of efforts to slow the spread of the virus.

Anglo American Platinum (JSE: AMS) said it was reviewing the regulations and working with the government to ensure the continuity of its business where appropriate, "in order to minimise any unintended consequences of the announced lockdown".

South Africa-based Buffalo Coal (TSXV: BUF) said the lockdown was expected to have a "considerable negative impact" on its operations.

"The company will continue to proactively measure and manage any potential impacts of the national lockdown, together with any possible future extensions thereof," it said.