Due to the COVID-19 pandemic and the nationwide lockdown, South Africa’s mining production plunged by 47% in April. This is a big 34% drop in April 2020 as compared to March 2020.
According to Statistics South Africa(STATSSA), iron ore decreased production by 62%, PGMs (Platinum Group Metals) fell by 62%. Gold’s production was decreased by 59.6% and manganese ore production fell by 57.6%.
In the previous 3 months, mining production has decreased by 21.9%.
‘The largest negative contributors were PGMs (-27,5% and contributing -6,5 percentage points), iron ore (-48,8% and contributing -5,8 percentage points), gold (-18,1% and contributing -2,3 percentage points) and ‘other’ non-metallic minerals (-35,4% and contributing -2,3 percentage points)’ writes STATSSA in published overview.
Mineral sales plunged by 28,3% in April 2020. At the beginning of the lockdown, many South African mines were shutdown – or under a slowed production in an effort to curb the spread coronavirus.
‘In the three months ended April 2020, the seasonally adjusted value of mineral sales at current prices was 11,6% lower compared with the previous three months. ‘
Gwede Mantashe, who is the Minister of Mineral Resources and Energy, said mines providing coal to Eskom were allowed to operate during the lockdown, however, at a reduced capacity.
Companies involved in the smelters business were also allowed to function at a reduced production level. This boasted coal production which only fell by 9.1% in April.
Safe havens were sought by investors when the plunge in output and sales coincided and the gold increased by $110 from the beginning of April to the end of the month.
There hasn’t been much change in the platinum prices since the decrease in the middle of March when the global COVID-19 pandemic began.