Mining operations in Asia and the Americas were hardest hit by government regulations implemented to stymie the spread of Covid-19, and are the regions that will register the largest declines in mineral production growth this year.

This is according to a new report by Fitch Solutions, which states that ore production in China, Indonesia, Peru and India have been the hardest hit, while Australia, Russia and Iran have seen limited disruptions owing to Covid-19.

Tin and copper ore will face the greatest Covid-19-induced reductions in output in 2020, owing to the concentration of copper and tin projects in Asia and the Americas. Global gold and iron-ore production will show greater resilience in 2020, owing to high prices and the location of mines of these metals in countries where mining operations are least affected by the pandemic.

For Asia, Fitch Solutions is forecasting a mining industry value (MIV) contraction of 4% year-on-year in 2020, after revising down mineral production forecast for a number of countries in the region. Most notably, China’s mineral production growth forecast has been reduced by an average of 3% from previous levels.

A MIV contraction of 5.6% is forecast for the Americas, where output, exports and investment were impacted by strict policies in certain countries.

“Peru, Mexico and Ecuador led the region with the strictest policies, essentially reducing the mining sector to just critical activities for a month of longer,” Fitch Solutions notes.

Africa and Europe had mineral disruptions, but mining companies could announce disruptions to production, owing to low mineral prices. Sub-Saharan Africa’s forecast is for a 1% MIV contraction, owing to lower metal prices and some localised lockdowns that resulted in logistical hurdles affecting output.

Fitch Solutions, however, believes that the worst is over, with the number of Covid-19 cases globally starting to plateau and more economies opening up.

“Global metal prices have displayed a sustained recovery since bottoming in March, and we believe in further upside if not stabilisation in the coming quarters and 2021. The global recovery in the mining and metals sector is being led by China as the country has embarked on a strong V-shaped recovery since lockdowns were lifted in April, ramping up mining production along with demand for imported ore, which we expect to continue in the second half of 2020 and 2021.”

Despite mining operations across the world facing varying degrees of disruption or reduced revenues, mining companies, in general, are surviving the Covid-19 financial storm without significant debt increases or bankruptcy filings.

Fitch Solutions says interim results released by mining companies in recent weeks remained strong, indicating that that they have been able to withstand the stress thus far.

“We have long held the view that major miners are better positioned to weather unexpected storms since the 2015 commodities rout.”

For instance, the financial footing of Anglo American, which reported earnings before interest, taxes, depreciation and amortisation of $3.4-billion in the first half of 2020, compared with $5.5-billion in the first half of 2019, remains strong and resilient iron-ore prices will shield the company from losses.

In its financial year, which ended June, BHP also announced a 5% reduction in underlying Ebitda, but it remains healthy at $22.1.-billion for the 12 months with attributable profit of $8-billion.

Rio Tinto’s revenues declined by 13.7% year-on-year in the first half of 2020, as prices for all metals that the miner produces – except iron-ore and uranium – reduced in the six months.