By Gavin du Venage
CAPE TOWN, South Africa–A wave of riots has so far had limited impact on South Africa’s mining industry, but this could change should stability not be returned soon.
The unrest began last week with protests against former president Jacob Zuma’s jailing in the country’s KwaZulu-Natal province. The protests quickly became riots with mass looting of stores, warehouses and distribution centers. These spread to Gauteng, the most populous province, and the largest city Johannesburg. However so far, few incidents outside these two provinces have been reported.
The brunt of the rioting fell on Durban, the country’s largest port. Durban is a major export hub, which serves not only South Africa but countries to the north of its borders. Copper belt countries such as Tanzania, Zambia and the Democratic Republic of Congo rely on Durban for their international shipments.
The DRC also exports the bulk of its cobalt – around 70% of world supply – out of Durban. Thus far, the transhipment route from the north appears unaffected according to commodity intelligence service Argus Media.
“There is little impact on transportation for the time being,” Argus quoted an unnamed producer as saying. However, this could still change, especially as rioters have also attacked trucks and blocked major roads such as the N3, the highway linking Johannesburg and Durban. More than 20 trucks were set alight by mobs along the N3 and many logistics companies have suspended services.
“It will depend on how long the turbulence will persist and whether they will spread to the transportation corridor,” the producer said. “Things will become clearer in the coming one or two weeks.”
Some mines have already followed suit, fearing their trucks and drivers will come under attack. MC Mining that operates the Uitkomst colliery in the north of the province, has suspended operations.
“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 in a statement.
A further concern for the mining industry, is how the unrest will affect support industries. For instance, the Durban based petroleum refinery complex operated by Shell and BP declared force majeure on Tuesday. The facility provides around 35% of the country’s fuel. Already some parts of the country are reporting gas shortages and queues at filling stations.
On Wednesday July 14, the Richards Bay Coal Terminal that exports some 90 million metric tons per year, had suspended operations. Port operator Transnet said roads into the facility had been blocked, preventing staff from safely arriving and leaving.
In response to the unrest, the government has ordered the military to assist the police in quelling the violence, but has stopped short of declaring martial law.
Industry body Minerals Council South Africa has warned that the unrest could undo efforts to vaccinate the country against Covid-19. Mines were especially hard hit during recurring lockdowns, since they are labor intensive operations with large workforces, making infections among staff almost certain.
The council also noted the widespread international coverage of the unrest could hurt the country’s investment prospects. “The images of mayhem playing across screens in South Africa and abroad will have a lasting impact in discouraging investment,” the council said.
