Every Friday, SAfm’s Update at Noon anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News & Mining Weekly. Reported here is this Friday’s At the Coalface transcript:
Kamwendo: Mining companies are going to great lengths to fund human welfare in response to the Covid-19 crisis.
Creamer: There is far-reaching corporate humanitarianism being extended by mining companies like I’ve never seen in my life before. The big mining companies are really coming to the party. We saw the first of these on Monday; that was Anglo American. Anglo American committed itself to continuing to spend R2-billion a week in this economy, I repeat, R2-billion a week, on wages and procurement. It’s not slowing up on, despite Covid-19.
Although, a lot of its mines have been curtailed by Covid-19, it is fully committed to paying all its wages. It is fully committed to supporting the community. You must see the remarkable lengths that this company is going to in South Africa. I know we South Africans are joined at the hip to Anglo American and that it was created here, but it is really giving human welfare top priority in response to Covid-19. Anglo has committed itself to things like 18 000 food parcels over the next three months, to people who are in Covid-19 quarantine. They’ve given over six of their mine ambulances. They’re giving over their mine hospitals and creating additional intensive-care beds.
Then you’ve got Glencore, which is another big mining company, also listed in London and Johannesburg. They employ 22 700 people here in three provinces. Yesterday, Glencore launched a R500-million community fund. They’re asking that their officials to come forward on how this money can be best spent in response to the coronavirus. Then we look at Gold Fields, which has committed R130-million. It’s paying its people fully, which is about R96-million. It’s helping small businesses with R22-million.
These companies are also giving a payment holiday to small businesses. Gold Fields is also contributing R15-million to the Solidarity Fund created by President Cyril Ramaphosa. The list could go on. You see De Beers coming forward with R50-million for Botswana and Namibia in response to Covid-19, and that’s just the start. It’s really a time when mining companies are showing their mettle and they are also working hard on plans to ensure a quick operational restart once the lockdown ends.
Kamwendo: Government is allowing a few mining companies to continue operating under strict hygiene conditions.
Creamer: Yes, all the mines were closed when the lockdown was declared and then individual mines went to the government to explain their special circumstances and some have been allowed to go ahead and continue to operate, but under strict new conditions and with fewer personnel. You get iron-ore mines that are heavily mechanised. They’ve been allowed to go ahead, but with strict hygiene and health conditions. You’ve got coal mines, which have to continue, because Eskom needs their coal to generate the electricity that we consume, and they have been allowed to resume, under strict conditions.
The Minister of Minerals Resources and Energy himself paid an unannounced visit to some of the operating coal mines this week and put his thumbs up about the Covid-19 precautions of some, but gave a firm thumbs down to others, who have been told to lift their game. But there were some that were found to be taking extreme Covid-19 precautions. The one that really got to government this week was a chrome mining and platinum group metals min, near Rustenburg. They put it to the government that the high-grade chrome that they produce is an absolutely an essential metal during the Covid-19 crisis.
So, they have been given permission to resume operations. The mine in question is Tharisa Minerals and it has been given permission to go ahead, but at a 75% level with fewer people and with very strict Covid-19 enforced rules on how they go about mining. We can see that mining is not going to be the same. That message was put out loudly and clearly by Minerals Council South Africa this week. The Minerals Council made it plain that when mining resumes as an industry, it will definitely not be business as usual.
Kamwendo: Gold is continuing to play its centuries-old role of being a safe haven in times of trouble.
Creamer: Amazing reports came in from the London Bullion Merchants Association (LBMA) this week. Now, the LBMA is something to which our Rand Refinery in Germiston is affiliated. When the Rand Refinery produces its gold bars in Germiston, these bars are marketed through to the LBMA in London.
Although early on in this quarter, from January to March, there was a lot of volatility in the gold price, because traders were taking profit quickly, the gold market settled down and gold began to show a clean pair of heels to equities markets on world stock exchanges. The demand for gold edged firmly ahead, particularly as a result of private-sector demand. We look at how the private-sector gets involved in physical gold. Private individuals buy physical gold when they buy gold-based exchange traded funds or ETFs. When you buy an ETF, you actually own physical gold, and there are similar products like that, which enable private people to own physical gold. Demand for ETFs has been rocketing, particularly in the United States.
In 21 of the last 22 months, the sales of ETFs in the US have risen by 263 %, an astonishing percentage. It shows that the people in the United States want to make sure that they have got a safe haven during Covid-19 and have been going into gold In a big way. The World Gold Council has reported similar figures about the ETF, which is really one of huge demand. That shows the private-sector, not governments through central banks, are climbing into gold as safe haven during these troubled times.
Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News & Mining Weekly.