The CEO of South Africa-focused Tharisa Mining has praised Pretoria’s response to COVID-19, and suggested mining operations will continue to be prioritised as the pandemic unfolds.
Before it emerged that AngloGold Ashanti had shut down operations at its Mponeng gold mine after 164 workers tested positive for the virus – Tharisa’s CEO Phoevos Pouroulis said the South African government had handled the pandemic “exceptionally well”.
“They have been pro-active, they have been extremely accessible, and certainly the Department of Mineral Resources and Energy has been hugely supportive of industry and trying to return back to work, albeit with very stringent and very strict health protocols and standard operating procedures,” said Pouroulis.
“I think as long as safety and people come first, [the government] will be amenable to looking at optionality around continuing in the event of certain situations.
“I still remain positive and I think it’s been a very positive engagement with the government, with the Minerals Council, which represents the body of the mining industry in South Africa. I think there’s been good alignment.”
Pouroulis said the company, which had been operating its core Tharisa asset at full capacity since May 1, was looking to ramp up volumes at its processing plants in the second half of the year, and expected unit costs to fall thanks to a 20% devaluation in the South African rand and cheaper diesel.
However, Tharisa has delayed its Vulcan ultra-fine chrome recovery plant by up to six months, which Pouroulis said was partly down to the lockdown halting construction but also issues around funding.
“We were in term sheet negotiations with a number of parties pre-lockdown and obviously that has also taken a backseat on the back of uncertainty,” said the CEO.
The project was due to be commissioned in the first quarter of 2021 but Pouroulis said he had set a long-stop date of June.
While the pandemic has placed serious question marks over industrial demand for PGMs, Pouroulis said supply issues would likely keep the market in balance and prevent a price slump.
“If you look at it holistically in terms of the global economic outlook, auto sales and demand look to decline between 15-20%, so that’s quite a material drop in demand for vehicles and the auto-catalysts and the PGMs that go into that,” he said.
“But I think the counterbalance to that is that supply due to restrictions, lockdown restrictions in South Africa, Anglo Platinum shutting off their PGM furnace due to technical issues, as well as the unknown extent of re-tooling and re-mobilising the capping industry, it almost seems to balance out and if anything maybe even put certain elements into deficit.”