The Department of Mineral Resources and Energy (DMRE) in South Africa has issued its directives for the energy and mining sectors on how to deal with the spread of Covid-19, following consultation with key stakeholders in the sectors on 24 March 2020.
This is in support of the decisive action by South African President Cyril Ramaphosa, to institute a 21-day nationwide lockdown from 23:59pm on Thursday 26 March 2020.
The DMRE together with the South African Petroleum Industry Association, the Minerals Council South Africa, and in consultation with labour unions, have developed a framework through which these industries will implement the envisaged directives.
The Minister said that this is being done in order to safeguard the lives of people, while ensuring that the limited economic activity which will be undertaken during this period is supported.
In issuing its directives, the DMRE said that it is considering the health, security as well as socio-economic impact of COVID-19 on these industries, which will be required to prioritise the health and safety of employees, suppliers, contractors and other relevant personnel.
While demand is expected to decline in the period ahead, as a result of restrictions on economic activity, the security of energy supply remains critical.
The supply of fuel to the relevant critical and essential services, as well as the supply of coal to Eskom for electricity supply and liquid fuels production, are critical during this period.
“We are mindful that in some mining operations and processing plants a complete shutdown will not be feasible, as a restart from scratch may be too costly,” said DMRE minister Gwede Mantase, noting that this would negatively affect the security of supply, and therefore the economy as a whole.
“We are adopting a risk-based approach, with worst-case scenario planning, and all companies are required to ensure that their business continuity plans are fit for purpose,” he added.
Broadly, the following are measures being proposed for implementation:
Energy sector directives
The following activities are among those that will be considered an essential service:
• The production and distribution of petroleum products, including fuel, paraffin and liquefied petroleum gas. This entails shipping, manufacturing, terminals, distribution and retail.
• In the case of petroleum products, imports will be scaled back for the duration of the lockdown, as there will be excess capacity.
• Regulatory oversight on nuclear facilities, as well as nuclear safeguard inspections.
• Production and supply of nuclear medicines and chemicals used at refineries.
• The Safari-1 research reactor and support technical services.
Mining sector directives
• Mining operations will be scaled down significantly, particularly deep level mining, which is labour intensive.
• Essential services supporting the sector, including security and related infrastructure, maintenance, water pumping, refrigeration and ventilation will continue.
• Mines supplying coal to Eskom will remain in operation, albeit at reduced production levels.
• For exports, each case will be evaluated on its merits.
• Services being rendered to communities, such as the supply of water, will continue.
• Production in the gold, chrome, manganese and other sectors will be scaled down; while the processing of surface material in the PGMs sector will continue for the production of – among others medical products. This will allow smelters, which cannot be switched on and off abruptly, to remain operational.
• In order to contain the spread of COVID-19, travel will be restricted, in line with regulations to be outlined by the Minister of Cooperative Governance and Traditional Affairs.
• The Minerals Council has committed to avail its health infrastructure – facilities and staff – during the lockdown, to support government efforts.
Minerals Council supports lockdown
The Minerals Council, on behalf of its members, has reaffirmed its support for the 21-day lockdown and the efforts by the government to manage this unprecedented crisis.
Following the Council’s discussions with Mantashe on the implementation of the lockdown, it was agreed that mining companies may apply to the Minister on a case-by-case base for limited operations, while operations supplying Eskom will continue to be mined to optimise energy security, though at a reduced level and the coal supplied to enable the manufacture of liquid fuels is also considered an essential service and will continue.
It was further agreed that activities involved in internal essential services, including security, ventilation, cooling and pumping, refrigeration, tailings facilities and specialised maintenance may continue. Further, the provision of water and other supplies to communities, as well as services to staff residences where required, will also continue.
Minerals Council CEO Roger Baxter said that the industry is fully committed to working with government to reach its common goal of preventing infection by COVID-19, and will at the same time, seek to ensure that mining operations can start up in reasonable shape once the lock-down is over.
Mantashe said that engagements are ongoing between the sectors, the relevant government departments and state-owned entities and the DMRE will continue to provide updates as the situation unfolds.