Pan African Resources, the South African mid-tier gold producer continues to increase its investment footprint in the country, as other mining companies opt to leave.
In February 2020, right before the announcement of a national state of disaster and ensuing lockdowns, AngloGold Ashanti sold its remaining businesses to the tune of R4.4 billion to Harmony. The company has had ties with the country since 1917 and the move signalled a change in the mining landscape. Operational challenges, particularly labour strikes and load shedding are thought to have led to this decision – including ever-looming political risks.
As mentioned above, the exit preceded the COVID-19 lockdowns, hence the company missed the tail-end of the loss in revenue caused by the pandemic. SA’s third mining charter, which includes 30% black ownership of companies vying for mining rights and has even more restrictive procurement regulations, is also seen as a deterrent. Mining firms now want a promise that the new mining charter will be in effect for at least a decade. But the charter says the Minister of Mineral Resources and Energy can change it at any time.
As one of the country’s most well-known gold miners’ exit still lingers, it presents a unique window into the mining landscape. If a company such as AngloGold Ashanti left, how is it that other gold producers have stayed and continue to thrive in the same operational climate?
Pan African Resources has assumed the responsibility of moving their mining operations into the future. The entire operations team evaluated the possible effects of a company shutdown in-depth and decided that it would have a catastrophic impact on people’s livelihoods. The company found a way to ensure its workers and surrounding communities survived the pandemic and were treated with care.
Their risk-based strategy scaled-down everyday operations to ensure everyone stayed healthy and safe. Employees were provided with housing at Evander mines, so as not to be exposed to the general public; PPE was given away to all who needed it; and extra hygiene and social distancing measures were introduced to curb infections. Evander Mines distributed over 5,000 food and hygiene hampers to NGOs and vulnerable families within the communities surrounding the mine. While Barberton Mines distributed 1,405 food and hygiene hampers to its employees.
All of that seems to have worked because as soon as the president announced Level 1 lockdown in the country, the gold mine was ready and waiting to operate. Many changes have been enacted to maintain the momentum of ‘Batho Pele’ (people first). This is a philosophy espoused by the government – more so during the peak of the pandemic.
Issues related to operational efficacy are also a constant touchstone for the gold miner as they move forward. With most of its workforce COVID-free and preserving all of the safety precautions put in place when the virus first broke out, operations can only improve. Issues of load-shedding and the third mining charter are ongoing. With the pandemic, swifter actions needed to be taken.
Barberton Mines successfully concluded a three-year wage agreement during September 2018 to provide certainty of earnings and sustainable productivity. This means all employees had a steady income during the strictest lockdown up to now. This is separate from the extra initiatives such as food and PPE provided.
In a country of about 57.78 million people, gold miners that put people first will continue to thrive in a country such as South Africa. Gold’s recent run of domination suggests that demand for commodity is still high. The overriding principle for all gold miners should be employment of local workforce, in surrounding communities. And creating sustainable employment and improvement opportunities for people to succeed.