South African mining companies are dipping into their stockpiles to maintain production during the pandemic as social distancing requirements limit the number of on-site employees, according to mining industry expert Roger Dixon.
"The South African mines are painting a bright picture, but they are using their inventories to keep up production at the moment," Dixon told S&P Global Market Intelligence. Dixon said it was not clear how mines would reach full capacity under the circumstances, particularly the deep-level operations common to the country.
"Social distancing will likely reduce hoisting capacity to a maximum of 10 employees per deck. This will reduce the available productive hours, with obvious repercussions on total production," Dixon said.
"A lot of companies such as gold and platinum are riding on a high. Palladium and rhodium prices are good. I think when they have to produce at their normal levels, that is when we will see their true colors," Dixon said.
Andrew van Zyl, principal mining engineer for technical service firm SRK Consulting, told Market Intelligence that the efforts mining companies in South Africa are making to address the coronavirus will put them in good stead.
"There is enough price support at the moment to deal with a number of inefficiencies," van Zyl said. "South Africa does have a large body of knowledge — I have stayed in touch with some of the people who are developing the country's national model for COVID-19 [and] they were people I worked with 15 years ago on HIV."
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