Tuesday, August 5, 2014

Ebola and Platinum

Whilst obviously not wishing this situation to occur, I discussed the topic of Ebola and South African mining with an old African hand and friend today.

Whilst hopefully an outlier event we posited:

What would happen if Ebola came to Rustenburg?

Ebola was first identified in 1976 and there have been several significant outbreaks since, but fortunately they were largely contained to area of the outbreak. This latest outbreak seems significantly worse, particularly now that the first two cases have been reported in Africa's most populated (and densely populated) city - Lagos, Nigeria (read here and here).

We assume in earlier days the mobility of rural West African villagers was greatly less than it is now. With growing economic activity, urbanisation and improving infrastructure (the Chinese have been building modern roads and railways throughout Africa to facilitate agricultural and mineral exports) travel between rural and urban and then between distant urban areas has greatly increased. People who struggled to travel to the next town 20 years ago are now able to afford bus, train and air travel. Trucks now travel throughout the continent as inter-Africa trade increases. With a 3 week incubation period an ebola infected truck driver could leave Lagos and travel to South Africa and return before they even felt sick, potentially infecting many people along their route. 

Now what if such an infected person passed on Ebloa to a miner in Rustenberg, the heart of South Africa's platinum mining belt? Do you think it could be contained in the crowed and filthy mine camps or amongst the close and hot working conditions of miners deep underground? Even if some miners were infected and isolated quickly, do you think unaffected miners would hang around getting near slave wages or would they run away?

The recent strikes in Rustenburg severely affected mine output and spiked the platinum price (80% of the world's platinum is mined in this area), but all parties knew that the strikes be would resolved eventually by throwing money at the problem. But if ebola was to affect miners and shut mines no amount of money is going to fix those affected.

A typical miner's camp


Miners sitting on the ground and crowed together for no apparent reason

 

Miners in the close and hot conditions of an underground Platinum mine