Platinum group metal mines undergo the third wave of blockade in South Africa

Last week, South African President Cyril Ramaphosa (Cyril Ramaphosa) raised the country's novel coronavirus alert level to the second highest level-a revised level 4. The government has imposed new restrictions to control the sharp increase in the number of novel coronavirus cases caused by the spread of the more contagious Delta (Delta) variant and the slow spread of vaccination. It is predicted that the number of infections in the southern hemisphere will increase in winter months, but the number of infections in the third wave is now expected to exceed the number of early infections in South Africa. The seven-day moving average of new cases has exceeded the first peak in July 2020.

South Africa's platinum group metal mining industry is still in operation. During the three-week national blockade from March to April 2020, mines were forced to close and daily production of refined platinum fell to an all-time low of less than 2,000 ounces. Platinum group metal production fell by about 15 per cent last year compared with 2019, although this was partly affected by the shutdown of smelters unrelated to the outbreak. Despite the increasing number of novel coronavirus infections, the government is unlikely to impose another blockade on the mining industry-because it simply cannot afford it. South Africa's mining industry contributed 361.6 billion South African rand (8.2%) to GDP last year, employing more than 450000 people (source: South African Minerals Council data).

The third wave of the novel coronavirus epidemic is expected to slow South Africa's economic recovery. Economic activity has rebounded faster than expected in the past few months, and the (OxfordEconomics) of the Oxford School of Economics recently revised its GDP growth forecast for 2021 to 3.1 per cent from the previous 2.5 per cent. However, in addition to the third wave of outbreaks, slow vaccination and persistent power outages could put pressure on economic activity this year.

The platinum group metals industry faces a smaller risk that the increasing number of cases may affect productivity levels and thus refining production. An outbreak of novel coronavirus in dense mining areas such as the west wing could lead to the closure of mines with outbreaks. Given the proximity and labour-intensive nature of mining operations, other mines in the area are likely to be affected as well. However, throughout the outbreak, South African platinum group metal mining companies have proved to be effective in mitigating novel coronavirus's risk and have established a good system to move forward. At present, the major risk of platinum group metal supply is very low, but it still needs to be observed in the next 3-4 weeks.