Amidst WHO declaring the coronavirus (COVID-19) outbreak as a pandemic, the biggest challenge for the mining industry was to keep operations running, at least to some extent. Accepting the new reality that mining operations will be impacted by employees being confined to their homes, is a given. Gearing up for the difficult times ahead that will most certainly lead to a global recession, is what is required of strong leadership. This is a real cause for concern and has enveloped the future of many mining operations in a shroud of uncertainty.
Navigating uncharted waters
We have never before dealt with such unprecedented times and for the mining industry, where physical labour forms the core of the operations, this will seem like an impossible hill to climb. Being the resilient industry that it is, the mining industry has come up with better and safer formulas for coming out of this crisis and being well equipped to thrive!
How hard was the initial hit?
With the government issuing measures to curb the spread of the virus, the mining industry suddenly had to face the idea of shutting down mines and halting production. The next drastic step was to let go of the staff or send them on unpaid leave. Increasingly volatile commodity prices, executives taking pay-cuts and supply-chain disruptions followed suit. There is no way to predict when operations will begin in full swing and this has only worsened the demand-supply curve. Demand has shrunk massively, thereby leading to oversupply.
The recent statistics, revealed by the NCBI (National Center for Biotechnology Information) will give some perspective. On January 22, 2020, the share prices of BHP Billiton and Rio Tinto, two of the largest mining companies in the world, stood at US$56.34 and US$60.50 respectively. As of March 18, 2020, BHP had lost 45% of its value, before recovering slightly to a share price of US$36.56 on April 3, 2020. Rio Tinto followed a similar path – bottoming out at US$36.42 – a 40% fall, before again recovering slowly to US$45.06 on April 3, 2020.
Making the best out of this situation
A few mining organizations were quick to grab this opportunity to begin automating their processes. Research and Markets report, “Automated Mining Equipment Market - Growth, Trends, and Forecast (2020 - 2025),” states a 7.21% CAGR growth in the Automated Mining Equipment Market.
In the long run, digitization will prove beneficial in ways like enabling connectivity among all the employees, facilitating remote mining operations and monitoring, reporting crisis outcomes via actionable insights, and collaborating with external stakeholders. Intelligent mining promises the sustainability of organizations.
Other miners adopted by hosting virtual conferences and online auctions or digital tender processes. The World Platinum Investment Council (WPIC) has made it viable for investors to access all their investments online. Case in point, online bullion accounts for buying and selling physical platinum bullion on a trading platform.
What lies in store for the mining industry?
A few specific changes with respect to COVID-19 that may stick include regular health screenings of employers and employees alike, shifting specific services offsite and more focus on remote working capabilities.
Crises fuels innovation. Even with a partial suspension of operations and other stringent restrictions, the mining industry has put on a brave face and continues to power through. Reducing human intervention to a large extent and improving the working conditions of employees form the basis of every solution. Mining underpins every aspect of the economy including that of medical equipment, and this lockdown has only served to look at old problems in a newer, healthier way.