Powering Through Covid-19

As South Africa prepares for the inevitable economic fallout of a 21-day lockdown, David McKay takes a look at how the mining industry will cope with this drastic measure.

- David Mckay

It is tempting to fear the worst following President Cyril Ramaphosa’s dramatic 21-day lockdown announcement on 24 March, aimed at stemming the spread of Covid-19, especially for the mining sector, which has long been at loggerheads with government over fiscal and economic policy.

The Minerals Council South Africa’s response was to call for creative measures, in association with government and business generally, to make sure all mines can reopen on 16 April when the lockdown is scheduled to end. It fears some might not.

However, there’s ground for optimism in the face of the unprecedented events around Covid-19. One is the most obvious: In terms of political capital, the Ramaphosa administration has never been more ‘on point’, moving with decisive pace in order to save the lives of South Africans.

Secondly, the interaction between government and business in tackling the Covid-19 crisis might be catalytic for public-private enterprise in the future. “The cooperation between government and the private sector has been excellent in the last few weeks,” says Charmane Russell, spokesperson for the Minerals Council. “There’s a great deal going on behind the scenes in terms of the private sector coming to the table.”

Thirdly, the last two weeks of stock market volatility, largely dominated by massive liquidations, represents an opportunity for investors, especially in the mining space, although caution is the by-word.

Thanks to the hardships of 2015, when the mining sector was found to have over-extended itself in search of market share, today’s diversified mining companies are well-stocked to survive the crisis.