Mining and Metal Industry in Current Global crisis

COVID-19 has turned into a global crisis with an unprecedented speed and scale. It is creating a
universal imperative for governments and businesses to take immediate action to protect their
people. For mining and metals companies, COVID-19 has disrupted the entire value chain. To protect
their people, government and organizations has taken strict measures from travel bans, access
restrictions and migrating to the New Normal of work from home. Current market conditions are
closely correlated with previous global financial crisis such as Ebola, H1N1 and MERS. The economy
is facing demand and supply mismatch. How long will it last? No one knows, it all depends on
severity of the outbreak and the public health measures undertaken to contain it.

Let’s have a look on the impacts of COVID-19 on mining and metals companies

Production Flexibility Challenges

Mining and some metal companies do not have the operational flexibility to adjust production as
quickly as might be required. This results in unbalance and non-optimal operations, leading to
increased cost of operations in short term. Sudden fall in petrol prices in oil rich countries is the best
explained of it.

Logistic Disruptions

Transportation and shipping restrictions are increasing because of less viability for transportation.
Russia, countries in Africa and middle east have stopped shipments from China and India too. Trade
within country also has been disrupted.

Material Availability

A shortage of supporting material like chemicals, machine components and critical consumables has
significantly affected the operations. Production shortage and logistic disruption has created supply
and demand mismatch.

Risk of Human Resource

Mining operations require workers to work in highly extreme conditions and very confined spaces
such as mining cap, trucks and operator rooms. This increases the chances to expose to corona virus.

Uncertain Future Demand

The crisis is causing significant disruption to workforce, suppliers, customer, operations and at all
shareholder’s level. Until the global pandemic curve flattens, prediction of future demand with high
accuracy is almost an impossible task.

Uncertainty comes with a call for quick actions. Let us discuss about the steps which can eb taken by
organizations involved in this industry to reduce its impact.

Safety of workforce
Organizations first goal must be ensuring the safety of employees. Companies can monitor the
physical and mental health of the employees. They can leverage the remote operating centres and
technology to future reduce the on-site workforce.

Response Governance

Company is each action will define their culture and brand. Companies should maintain response
room composed of senior leadership where the response should eb localized to communities in
which you operated and include your people, vendor, and communities. At the same time, they must
ensure information security monitoring for work from home.

Reduction in Operating exposure

Companies should work to make supply chain as much as responsive they can. They should support
their employees to identify opportunities to reduce operational impacts. They should validate
business plan on frequent basis and should ensure the engagement of supplier, unions, communities
and others.

Monitoring and Reporting

Companies should focus on managing the situation with the same passion and discipline that they
bring to manage operations such as keeping record of health of workforce, monitoring the sentiment
of all stakeholders, continuous assessment of internal and external indicators and have a mechanism
in place to act swiftly, development of ramp up plan and use of applied intelligence to accelerate
their responses.