JOHANNESBURG (Reuters) – South Africa’s underground miners say working at half capability through the coronavirus lockdown is unsustainable, with prices increased than returns, and are lobbying the federal government to permit them to ramp up output or threat mine closures.
Miners work deep underground at Sibanye Gold’s Masimthembe shaft in Westonaria, South Africa, April 3, 2017. REUTERS/Mike Hutchings
South Africa — the world’s greatest producer of platinum and chrome ore and a number one producer of gold and diamonds — allowed underground mines to restart operations at half capability in April.
Nevertheless, AngloGold Ashanti spokesman Stewart Bailey mentioned volumes had been essential as mines have a excessive fixed-cost base of round 70% or extra of complete bills, incurred whatever the degree of manufacturing. [nL5N2CB8KQ][nL5N2C44DR]
Sibanye-Stillwater Chief Govt Officer Neal Froneman mentioned working at 50% capability was not sustainable “since you are successfully working at a loss”.
“We might quite not function and maintain our operations on care and upkeep if authorities doesn’t enhance the allowed capability quickly.”
Sibanye-Stillwater’s platinum group metals (PGM) operations would want to function at about 60-65% to interrupt even, whereas its gold operations require even increased ranges to make a revenue, Froneman mentioned.
If output is just not ramped up, the business — which employs round half 1,000,000 folks — may see shaft closures and restructurings, he added.
“As soon as mines shut they don’t re-open simply,” mentioned Froneman.
In labour-intensive mines the place usually cramped work now must be tailored to social distancing guidelines, half the workforce could produce 30-40% of regular output, the Minerals Council mentioned.
Miners need the federal government to permit them to extend capability, with Concord Gold CEO Peter Steenkamp and Impala Platinum spokesman Johan Theron additionally saying the present scenario was not sustainable for for much longer.
The mines ministry couldn’t instantly remark.
The federal government allowed open forged mines to function at 100% capability from Could however in response to draft plans drawn up in April underground miners are unlikely to be allowed to renew full capability operations earlier than June on the earliest.
Further reporting by Helen Reid; Enhancing by Olivia Kumwenda-Mtambo and Kirsten Donovan