More mining companies resume limited operations in SA

File photo: Workers underground at AngloGold Ashanti.
File photo: Workers underground at AngloGold Ashanti.

More mining companies are resuming some of the operations they were forced to suspend down when South Africa went on lock down almost three weeks ago. 

On Wednesday, gold miners AngloGold Ashanti [JSE:ANG] and DRDGOLD Limited [JSE:DRD] announced that some of their operations in South Africa, have resumed, albeit at limited capacity.

AngloGold Ashanti said roughly 8% of the local workforce is now back at work while 34% of workers at DRDGOLD's Ergo mine in Brakpan and 60% at its Driefontein plant, FWGR have returned. The companies have been granted permission by the Department of Mineral Resources & Energy (DMRE) to restart operations such as reclaiming and processing mine dumps.

Mining houses were only allowed to carry out essential maintenance work during the first 21 days of South Africa's lockdown. But several of them applied to the department to continue with other operations outside of the essential care and maintenance on a limited basis.

DRDGOLD CEO Niël Pretorius said the continuation of the company's operations during the lockdown was approved on condition it ensures health and safety of staff. "We took guidance on what such measures entailed from the guidelines published by the DMRE, the Department of Health and the Minerals Council South Africa," said Pretorius regarding safety measures put in place.” 

DRDGOLD did not specify when it opened more operations. AngloGold Ashanti said its operations resumed on 6 April.

"The restart of these operations on 6 April 2020 has been facilitated by about 500 employees, spread across both the West Wits and Vaal River regions. This is less than a third of the usual staff complement for these business units, and roughly 8% of our total South Africa workforce," said AngloGold Ashanti in a statement published on the Stock Exchange News Services on Wednesday afternoon.

AngloGold Ashanti said only one out of its 14 of its operations across the globe – Mponeng in Gauteng – remains suspended until the end of the lockdown period on 30 April.

The company is likely not the only mining house re-starting some operations that were initially closed when the lockdown began. The Minerals Council of SA wrote in a statement on Tuesday that some companies sought exemptions from the DMRE to continue operating on a limited basis. The Council, which represents most of the players in the industry, said companies approached the department directly.

Impala Platinum, which has sent texts to workers asking them to prepare for resumption of work this Friday, is among those who applied to continue with some operations. The mining houses say they have put processes in place to manage possible cases of coronavirus (Covid-19) in their operations.

AngloGold Ashanti said it has increased screening and surveillance of employees and banned non-essential travel, among other things, while Impala Platinum said it has further installed additional facilities ensure social distancing between employees.

Outside of South Africa, AngloGold Ashanti said its Cerro Vanguardia mine in Argentina restarted milling operations on 6 April 2020 and has now ramped up capacity. In Brazil, the ramping up of production in Serra Grande mine began on 5 April. The Argentinian operations were suspended on 21 March and the Brazil suspension began on the 27th.

The Minerals Council, which represents some 90% of the country's mining companies, said suspension of mining operations for the 21 days of the initial lockdown period would have reduced SA's annual mining production by 5% compared to 2019. In a recent document discussing the impact of the lockdown on the industry, the Council said it believed a longer lockdown could result in annual mining production declining by more than 15% for the year. 

The Council believes mining production could return to production levels of over 50% while still containing the spread of the coronavirus. 

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