Australian miners in South Africa concerned about social unrest
Australian mining companies operating in South Africa are bracing for the worst amid widespread social unrest.
Australian mining companies operating in South Africa are bracing for the worst amid widespread social unrest that has so far led to the deaths of more than 70 people.
ASX-listed coal miner MC Mining said on Wednesday it had suspended operations at its South African coal colliery in the face of widespread unrest, linked to the imprisonment of former South African president Jacob Zuma.
Australian mining major South32 said it was monitoring the situation closely and preparing “business continuity plans” for its Hillside aluminium smelter and South African manganese operations if the situation worsened.
Rio Tinto halted operations at its Richards Bay mineral sands mine and smelter late last month due to unrelated community violence, with those operations still sitting in mothballs amid the current crisis.
While it is not clear whether Rio’s operations have again been targeted in the latest outbreak of unrest, South African media reports indicate suburbs of the port town of Richards Bay, not far from South32’s Hillside smelter and Rio’s mineral sands processing facilities and smelter, have been hit hard by rioting and looting.
Shipping operators this week reported delays at the Richards Bay port after public transport networks were closed amid the rioting, leaving many port staff unable to travel to work, and maritime traffic websites indicate no vessels have left the port in the past two days.
Other ASX-listed resource companies with operations in South Africa – including manganese major Jupiter Mines, mineral sands miner Mineral Commodities, recently listed mining services company DRA Global, and exploration juniors West Wit Mining and Renergen – told The Australian the unrest had not had any impact on their operations at this point.
However, all said they were monitoring the situation closely to ensure the safety of their local staff.
Coal miner TerraCom also has operations in South Africa that produced 6.9 million tonnes of saleable coal last financial year. However, the company is yet to update the market on the status of their operations.
MC Mining said on Wednesday it had temporarily suspended operations at its 70 per cent-owned Uitkomst colliery in the face of the unrest.
“Unfortunately, protests, road blockages and attacks targeting transport vehicles have been reported across KwaZulu-Natal, including the towns and communities where the majority of the Uitkomst mine employees and contractors reside,” the company said.
Uitkomst is a small operation and produced only 115,944 tonnes of thermal coal in the March quarter.
While not all areas of South Africa have been directly affected by the unrest, logistics and transport companies have also ceased operations in some regions in the face of safety concerns for their staff, which is likely to make it more difficult to transport products to customers and supplies to mining operations.
And the unrest, which continued overnight on Wednesday South African time, could cause further problems in coming days if South Africa’s police and military, which has been deployed to trouble spots, fail to bring the situation under control.
Shipping at the port of Durban has also been affected by the unrest, slowing shipments and the import of fuel.
The country’s biggest fuel refiner, SAPREF – a joint venture between Shell and BP – on Tuesday closed its operations outside Durban and declared force majeure on delivery contracts, effectively removing about a third of South Africa’s fuel supply from the logistics system.
Separate issues have closed two other fuel refineries in South Africa, leaving only a single refinery still operating and sparking warnings the country shortly faces a damaging fuel shortage.
South Africa’s latest bout of social unrest began with sporadic protests last week, when former president Zuma handed himself over to police for arrest and to serve a 15-month jail sentence for contempt of court.
Zuma was jailed over his refusal to give evidence in February at an inquiry into corruption during his nine years in office, before he was pressured to quit the country’s top job in 2018.
Sporadic protests and violence turned into full-blown rioting and looting at the weekend, particularly in Zuma’s home province of KwaZulu-Natal.
The corruption inquiry is investigating allegations that Zuma’s administration allowed three Indian-born businessmen – Atul, Ajay and Rajesh Gupta – to use their influence within the government to capture lucrative government contracts and advance their own business interests.
