Webber Wentzel’s legal experts, specialising in the mining industry, discussed the impact of COVID-19 on the mining industry in an insightful podcast.
With the Covid-19 lockdown in full effect until the end of April, and the potential for yet another extension still looming, South Africa’s mines have scaled down operations on a massive scale. Given that labour is the most significant cost – and human resource – for many mines, and the country is heavily reliant on foreign earnings from mineral exports, Covid-19 could represent the sucker punch for mines and the economy.
A scale down in operations could also mean a scale down in employees – which SA can ill afford with one of the highest unemployment rates currently sitting at 38%. Economists already predict that South Africa could shed a further one million jobs in 2020.
Chief economist for the Minerals Council of South Africa, Henk Langenhoven, warned that the industry was set to lose R1.5 billion-a-day ($86 million) at a time when it can ill-afford it, in an industry that earns 24% of the country’s foreign currency every year.
Other analysts believe that the mining industry has over the past three decades faced adversity on many fronts – from communities, Eskom, government and organised labour – and have proved themselves resilient and should be able to navigate the lockdown. However, The Minerals Council says that though the weak rand provides a short-term benefit, SA’s credit rating downgrade will ultimately have a significant influence on investment in equities and the cost of borrowing, both of which will affect fixed investment in mining.
There are many legal, social and even moral questions that need answering as South Africa fights to flatten the curve in one of the greatest socio-economic and healthcare crises the country, and indeed the world, has ever faced.
Is it all doom and gloom? Or is the industry, which has navigated many preceding challenges, able to push through once the lockdown ends? What is government doing to provide relief, and what more could be done by government and the private sector to navigate through this uncertain and challenging time?
Is there a difference between what your rights are in law, and what one should do amidst a lethal pandemic where it is in all our best interests to keep the wheels of our economy turning? These and other questions are answered in the podcast with Lizle Louw, Nirvasha Singh, Garyn Rapson, Kate Collier, Merlita Kennedy and Rita Spalding.