JOHANNESBURG/LONDON – The world's largest platinum producers Anglo American Platinum, Sibanye-Stillwater and Impala Platinum have declared force majeure on contracts after a three-week national lockdown forced operations to close.

South Africa, which accounts for around 70% of mined platinum supply, called the shutdown last week to try to slow the spread of the coronavirus outbreak.

The measure triggered a downgrade of the country's sovereign rating by Moody's on Friday and has hit its mining industry, which accounts for about 7% of GDP.

Miners have put many of their operations on care and maintenance and have reduced metal processing.

The coronavirus has also slowed demand for platinum from global car companies, the biggest users of the metal, which is a key component in catalytic converters.

South Africa's main ports have been shut, preventing the flow of commodities such as iron ore, coal and manganese.

"We are unable to supply (customers) with metal because now our operations have closed down, so we will have to declare force majeure," Sibanye spokesperson James Wellsted said.

The clause of force majeure, loosely translated as superior force, allows certain terms of an otherwise legally binding agreement to be ignored because of unavoidable circumstances.

Apart from issues in South Africa, Sibanye has also significantly reduced the number of people working at its palladium operations in the United States.

Sibanye's peer Implats also said it had sent force majeure letters to all consultants and contractors, as well as companies with which the miner has offtake agreements.

Implats' Zimbabwe operations, Zimplats and Mimosa, have applied to continue operations after the country enforced its own three-week lockdown from Monday, the miner said.

Amplats, a unit of the global miner Anglo American, has also declared force majeure on supplier contracts for goods and services that were not essential, spokesperson Jana Marais said.

The miner mainly operates mechanised mines in South Africa, where the majority of operations are labour-intensive and have deep shafts.

News of the lockdown drove platinum prices more than 20% higher last week, the biggest weekly jump on record, although that followed a 32% slump over the previous two weeks to an 18-year low as the coronavirus outbreak spread.

Palladium and rhodium, which had also both been heavily beaten down, climbed 40% and 61% respectively.

Demand for palladium and rhodium, which are used to reduce harmful emissions, had been rising as tighter environmental regulations forced carmakers to use more in each vehicle.

"The 21-day lockdown in South Africa, which would significantly reduce 2020 PGM production, should go a long way to offsetting the demand impact of the outbreak," Nedbank equity analyst Arnold Van Graan said.

"This should ensure that the market is not flooded with unwanted supply while demand is low. This would contribute significantly to keeping the PGM market fundamentals intact."

In other commodities, India-based Vedanta placed its South African zinc operations under care and maintenance, a source with direct knowledge told Reuters.