South Africa's 3-week lockdown expected to suspend iron ore mining activities

Singapore — South Africa's decision to implement a three-week nationwide lockdown starting from March 26, due to the worsening coronavirus outbreak, is widely expected to result in suspension of domestic iron ore mining operations, market sources said Tuesday.

Some market sources were doubtful if iron ore mining would fall under essential services, which will be exempted from the lockdown.

Anglo American, which owns South African iron ore mining company Kumba, said Tuesday that it would review the detailed regulations and issue a further statement in due course.

Assmang did not comment on S&P Global Platts' queries.

Chinese end-users told Platts that their contracted spot cargoes from South Africa were not impacted for now.

Shipping data seen by Platts showed a total of 1.19 million tonnes of iron ore shipped out from Saldanha Bay for March-to-date. In comparison, iron ore export volumes were at 3.67 million tonnes for February and 3.99 million tonnes for January.

A three-week closure on South African iron ore mines was seen as having a cushioned impact on the Chinese market due to the limited number of Chinese end-users utilizing South African iron ore. However, market sources pointed to a likely further weakening of the Capesize market.

Capesize rates have dropped significantly over the past month. With about 20-25 Capesize ship voyages from Saldanha Bay a month, a full closure of mining activities will further push down rates, a source said.