The World Health Organisation (WHO) has declared the Covid-19 outbreak a pandemic and, at the time of writing, there were more than 1.3-million confirmed cases worldwide.
Mining companies have been affected by Covid-19 outbreaks, and global restrictions to encourage physical distancing have meant that mining projects have either slowed or been put on hold until further notice, software company SAP Africa mining industry adviser Shabir Ahmed notes in a statement released on April 1.
“Share prices of listed mining companies are in a downward spiral. Commodity prices across the industry have been tumbling as the industry considers the devastating aftershocks of this ‘Black Swan’ event.
“To single out one example: platinum and palladium prices have dropped by more than 40% in just three weeks,” Ahmed states.
In the weeks preceding the WHO’s deceleration, dual-listed gold miner Sibanye-Stillwater lost two-thirds of its share price, with platinum group metals miner Impala Platinum losing a similar percentage, and diversified major Anglo American losing about 40% of its market value.
He adds that the effects of the pandemic have undercut recent gains, which had resulted from surging commodity prices and various cost-cutting initiatives, implemented toward the latter half of last year.
Tremors Throughout the Sector
Ahmed explains that the response to the pandemic from governments and markets has “shaken” the mining industry, as restrictions imposed on mining companies have seen production shut down across multiple markets.
He cites mineral exploration and development company Alta Zinc which shut production at its largest project in northern Italy in March.
In Mongolia, diversified major Rio Tinto suspended non-essential operations following the country’s first confirmed Covid-19 diagnosis.
He also cited Anglo American demobilising most of the workforce at its copper project in Peru. As reported by Mining Weekly, Anglo’s Quellaveco copper project was impacted by a national quarantine period. Anglo temporarily withdrew the majority of its employees and contractors from the project as well as significantly reduced construction work.
“We’re also witnessing a halt on capital expenditure growth. While capital expenditure for the world’s 20 largest mining companies grew by 12% in 2019 to reach $49.1-billion, we’re now seeing delays in project work and investments being put on hold.”
Further, national quarantines like those in Peru, and the national lockdown in South Africa, have grounded most mining operations. “In cases where shutdowns are not occurring, restrictions on the movement of people and supplies will inevitably delay development work,” Ahmed adds.
Mining ‘More Exposed’ to Pandemic
Ahmed says that South Africa’s mining sector is particularly exposed to the spread of Covid-19. Citing industry association Minerals Council of South Africa, he notes that the industry employs about 420 000 workers, with many working underground on any given day.
“Some mines have thousands of men and women underground,” he notes, adding that, “before and after shifts, dressing rooms are filled with miners”.
“It does not take an epidemiologist to realise that the mining work environment is a catalyst for spreading the pandemic.”
He notes that in South Africa, this situation is exacerbated by the fact that mining labour comprises mostly migrant workers, with constant movement between the goldfields, and the platinum belt, Lesotho, Mozambique and the Eastern Cape.
Moreover, the average age of the industry’s workforce is over 40, which increases the miners’ vulnerability as the illness poses greater risk the older the infected person is.
On a slightly positive note, Ahmed says the South African mining industry’s experience with Aids and tuberculosis (TB) should stand it in good stead: it has invested in health infrastructure and has experience with contact-tracing as the tracing procedure used for a TB diagnosis is similar to that of the coronavirus.
The Minerals Council has also published a 10-Point Action Plan for Covid-19 which outlines several measures to deal with the pandemic, having taken its lead from agencies like the WHO and the National Institute for Communicable Diseases.
Industry to Fast-track Automation?
Ahmed highlights that the Covid-19 outbreak has made the immediate future of several mining operations around the world uncertain. Consequently, there may be an increased appeal and demand for solutions to reduce the human workforce on mine sites.
He notes that the uptake of automated mine solutions including self-driving haul trucks and remote operations centres has been slow but steady. He cites Rio Tinto’s Mine of the Future initiative in 2008, as one of the earliest moves into automation.
“From a remote operations centre in Perth, Western Australia, workers operate autonomous mining vehicles at mines more than 1 200 km away in the Pilbara region of Western Australia. T oday, around a third of the haul truck fleet at Rio Tinto’s Pilbara mines are autonomous,” Ahmed says.
Further, the Syama underground gold mine in Mali, became the world’s first fully autonomous mine operation. Designed in partnership with Swedish engineering company Sandvik, the mine operates with fully automated trucks, loaders and drills.
The fully autonomous operation means that the mine can operate 24 hours a day, with all operations overseen from a remote operation centre.
“Depending on how long this crisis lasts, the mining industry could see big moves into autonomous mining technologies in the not-too-distant future.”
While it is not possible to predict how Coivd-19 will further disrupt the mining industry, what is certain is that the mining industry must reconfigure and prepare itself to operate under a ‘new normal’, one that enables it to sustain itself in light of new constraints and challenges such as pandemics, Ahmed concludes.