The South32 Ltd (ASX: S32) share price was a strong performer on Tuesday.
The mining giant's shares ended the day 5% higher at $1.75 following the release of a COVID-19 update.
This compares to a 4.1% gain by the S&P/ASX 200 Index (ASX: XJO).
What did South32 announce?
This afternoon South32 advised that the South African government has announced a nationwide lockdown aimed at containing the spread of COVID-19. This lockdown will commence at midnight on Thursday March 26 for a period of 21 days.
According to the release, South32 understands that businesses essential for the maintenance of power generation in South Africa are exempt from the lockdown.
As a result, while not confirmed, it expects that its South African Energy Coal and South Africa Aluminium operations could be exempt from the lockdown due to the role they play in the sustainability of Eskom's generation network.
Its South Africa Manganese operation is unlikely to be exempt, though. As such, management has commenced planning for its manganese ore operations and the remaining furnace at its Metalloys alloy smelter to be placed on care and maintenance mode.
Given the uncertainty that this is causing, South32 has unsurprisingly withdrawn its FY 2020 guidance for its South African operations. It intends to update the market when further information becomes available.
South32's Chief Executive Officer, Graham Kerr, said: "Our response to COVID-19 is built around three areas – keeping our people safe and well, maintaining safe and reliable operations, and supporting our communities, all of which are critical to the future of our business."
"We have implemented a range of measures at all our locations to ensure the health and wellbeing of our people and communities, by reducing the risk of infection and the rate of spread, while maintaining day-to-day operations," he added.
The chief executive concluded: "To-date, we have not yet experienced production interruptions from COVID-19 at any other operations. We continue to monitor the impact of restrictions being placed on the movement of people and goods by governments across the world and will continue to update the market as appropriate."
