The pandemic has hit the mining sector in Africa hard. Mineral exploration has all but stopped due to restrictions on travel, risk mitigation policies, and mineral supply chain disruptions. The longer this goes on, the more likely the exhaustion of existing and old mines. Meanwhile, the continent’s abundant mineral resources will remain untapped and exploration budgets continue their decline.
In fact, S&P Global Market Intelligence stated that in 2020, Africa’s exploration budgets dropped by 10% to a four-year low. At the same time, the budgets for Canada and the United States fell by a far smaller 1.5%. Latin America had the biggest knock to its exploration budgets, which plummeted by 21%.
However, South Africa received the biggest blow to its exploration budgets, which dropped to a 17-year low. Burkina Faso, Ghana, and the DRC were also hard-hit.
Guinea, Senegal, and Ivory Coast are exceptions. These countries have experienced increases, not drops, in their exploration budgets. This suggests that the pandemic has not dampened interest in gold-rich countries in West Africa.
But all may not be lost for other countries’ mining industries. The imminent arrival of COVID-19 vaccines in Africa is hoped to restore the health of the mining sector and global economy. This economic recovery would, in turn, intensify the demand for and prices of minerals. If this happens, investments into mineral exploration, particularly gold exploration, may increase.
South Africa’s mining industry has been providing logistical and financial assistance to the government in the national COVID-19 vaccine rollout. And as the mining sector has the capacity to carry out at least 60 000 vaccinations for its workers a day, the entire workforce could be vaccinated in no time. Mxolisi Mgojo, the president of the Minerals Council of South Africa, said early in February that the mining industry also intends to provide vaccinations to at least five people for every one of its 450 000 staff. These individuals will either be residents of mining communities or family members of mineworkers.