SA miners count the cost of COVID-19 lockdown as projects, production, financing put on hold - Miningmx.com
SOUTH African mining firms began to count the cost of the three week shut down ordered by President Cyril Ramaphosa last night – effective from midnight March 26.
Whilst acknowledging that the health and well-being of all our employees remain a top priority, it added that the COVID-19 directive will impact negatively on Harmony’s annual production guidance of 1.4 million ounces and thus on the company’s earnings.
This is an unprecedented time in the history of the mining industry and our country, said Peter Steenkamp, CEO of Harmony in a statement. The health and safety of all South Africans must take precedence and as such, we are committed to making decisions that will ensure the continued viability of our company.
Harmony was working on an orderly implementation and management of placing our mines on care and maintenance for the duration of the lockdown which is expected to end on April 15. It would disclose additional details in the next two days.
Preparations for Harmony Gold’s $300m purchase of AngloGold Ashanti’s Mponeng mine and Mine Waste Solutions operations on the West Rand – the group’s last remaining South African mines – were continuing, said AngloGold Ashanti. Both parties remain committed to the transaction.
AngloGold Ashanti also confirmed it would suspend production at its Cerro Vanguardia mine in Argentina until end-March … in line with a suite of COVID-19-related work and travel restrictions imposed by the Argentinian government. Other mines in the group continued to operate whilst mitigating the risk of spreading the COVID-19 virus.
Anglo American and its listed investments Anglo American Platinum and Kumba Iron Ore said they would wait on details from the South African government regarding … detailed regulations relating to this action … including exemptions for certain business activities. Anglo said it was working with the government … to ensure the continuity of our business … in order to minimise any unintended consequences of the announced lockdown.
Orion Minerals has postponed efforts to raise debt finance for its A$378m (R3.96bn) Prieksa Copper-Zinc Project situated in the Northern Cape province until the global macro-economic situation and market conditions stabilised. It was continuing with an optimisation study for the project and was still in talks with possible equity-level investment.
We will be able to weather the storm by dramatically reducing spending, while preserving a top-class, build-ready base metal project that can be activated as soon as global manufacturing and metal demand re-commences, said Errol Smart, MD and CEO of Orion.
Orion Minerals published a bankable feasibility study in June 2019 in which it set down plans for a foundation 10-year production period in which some 189,000 tons of copper and 580,000 tons of zinc would be produced.
The lockdown comes at a deeply unwanted time for Petra Diamonds which needs production in order to help tackle its debt pile. It said today it was undertaking a review of the lockdown and that it supported the South African government’s directive.
Petra said in February that it was considering its options as a bond repayment worth $650m advanced upon it, and its access to cash teetered at the absolute minimum level of $40m. The diamond markets, which showed signs of recovery towards the back-end of 2019, have also been affected as retail sales were thought to be slowing.
Petra said in February that it had sufficient liquidity to remain in business for the next 12 months.
The Minerals Council South Africa warned there were marginal and loss-making mines that would be unlikely to reopen should they be required to close fully without remedial measures. It said it was exploring creative solutions … including by organised business as a whole, that could assist the survival and eventual recovery of the industry and the economy.
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, it said.
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