Poorest nations hit as coronavirus shuts gold mines
Steve Ward, News Editor
15 Apr 2020, 11:41 a.m.
An industrial zone conveyor belt system on a South African gold mine.
The coronavirus outbreak has seen demand for gold soar as buyers invest in gold bullion. The result can be seen in gold price charts which leapt to an all-time Sterling high of £1,395.52 per ounce in mid-March on the London Bullion Market.
At the same time, essential working restrictions have impacted mining, refining and distribution. Demand for other materials, used for industrial production, has inevitably slumped, but precious metals - typically a safe haven in uncertain times - are more popular than ever.
Gold production is suspended in South Africa, Mexico, Peru and Argentina. Operations in wealthier regions, such as Australia, Russia, Poland and the US, have generally continued - albeit to a lesser degree.
Mining consortiums have been unable to take advantage of the higher price of gold in recent weeks. The pandemic and resulting stock market falls have wiped $282 billion from the market value of the top 50 mining companies.
The risk to poorer nations:
Developing nations are generally more reliant upon the production of raw materials and precious metals. They and their central banks are likely to suffer most in any forthcoming world recession. More initiatives such as these will be required to bolster their fragile economies.
Despite limited operations, many gold companies operating in poorer communities are doing much to support public health in this crisis. The world's second largest gold mining business, Barrick Gold, donated $530,000 to the Zambian government on April 7th. The following day it gave $1.5 million to the Democratic Republic of Congo (DRC). It has further pledged $1.7 million to the Tanzanian government.
AngloGold Ashanti recently sold its interests in South Africa to Harmony Gold Mining. It still pledged support for the South African government. It has also made its medical facilities, equipment, and sanitary products available to the government in its former area of operation.
Sarah-Jayne Clifton, director of the Jubilee Debt Campaign said "Developing countries are being hit by an unprecedented economic shock, and at the same time face an urgent health emergency.
"The suspension on debt payments called for by the IMF and World Bank saves money now, but kicks the can down the road and avoids actually dealing with the problem of spiralling debts."
As the International Development Secretary, Anne-Marie Trevelyan, said: "Coronavirus does not respect country borders so our ability to protect the British public will only be effective if we strengthen the healthcare systems of vulnerable developing countries too."
The International Monetary Fund announced today it will cancel debt payment owed by 25 of the world's poorest nations for the next six months. This will aid them, many of which are reliant on mining, in the fight against Covid-19.