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April 2, 2020

Mine closures and uncertainty could trigger financial struggles

By JP Casey

The Gorno mine closure is not the only operation to impede production, as mines around the world have been thrown into uncertainty; 21-day nationwide lockdown in South Africa has unsettled the platinum group metals industry, with the country responsible for 75% of the world’s platinum production.

There are also fears that the Covid-19 pandemic could trigger a global recession, a turn of events that has historically hindered the mining industry. During the 2008 crash, gold prices immediately rose from $989 per ounce in December 2007 to $1,172 per ounce the following March as demand outpaced supply, but by October the price had collapsed to $872. With gold prices boosted in the short-term by the pandemic –gold prices per ounce increased from $1,489 to $1,570 over the course of a day – there could be a similar long-term decline following this outbreak.

Read more about the impacts of Covid-19 on mining here.

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