Respond, Recover, Thrive: The effect of COVID-19 on the mining industry
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There is no doubt that the COVID-19 pandemic will have a profoundly negative effect on global economies. The most resilient mines in this time might well be those that use this crisis to rethink how they work and understand that they are vital to the complex environmental and social ecosystems in which they operate.
At the time of writing, an estimated 30% of the world’s population is under some form of lockdown measures to curb the spread of COVID-19. Non-essential services have come to a grinding halt, and many mines around the globe have ceased operations and entered care and maintenance to protect their workforce.
Organizations and governments have rightly prioritized the health and safety of the people above all else. However, it is difficult to speculate on the economic impact that slowed mining production will have.
The outlook for the mining industry is ominous, even the most optimistic forecasts suggest we are facing a global economic recession. While the past few weeks have seen many mines act swiftly to protect their employees and enter care and maintenance – whether due to a mandated lockdown or to stop the spread of the virus on their sites. Care and maintenance is not a straightforward procedure. It is not simply a question of locking up and going home. Sabrina Dias, Founder and CEO of SOOP Strategies Inc. explains that “Mines in Canada are in crisis-management mode right now. The overriding intention is to keep employees safe. It is difficult for the industry to know exactly how to react in such unprecedented situations, or what the long-term impact will be. This is an extraordinary circumstance.”
Minerals and metals are used in virtually every sector of business and manufacturing, so the mining industry is affected by a slowdown in production and a reduction in demand for raw materials as other industries slow down too.
“Even where mining is deemed as an essential service, mines have still opted to protect their employees,” explains Sabrina. “The responses in the mining industry have been reactionary, and the situation continues to evolve. Demands have dropped. They cannot continue production regardless. It is difficult to predict the impact it will have, as the situation is ongoing all over the world.”
Care and maintenance on a mine is not a straightforward process, and usually takes weeks, if not months. “When mines enter care and maintenance, they suspend their operations. But, it is a complex process, the mine does not fully close there are still people on-site, enough people to ‘keep the lights on’ – a skeleton crew to ensure the mine performs the bare minimum in requirement of its operational licenses. In many cases, a mine’s license depends on it being operational, so the mine cannot cease operations entirely, else risk losing its mining license.
Accelerated autonomous mining
Autonomous mining solutions appear attractive – they’re purported to improve efficiency, productivity and safety. Now that the COVID-19 coronavirus outbreak has made the immediate future of several mining operations around the world uncertain, there may be an increased appeal and demand for solutions to reduce the human workforce at mine sites, if only to prevent future crises from having such a detrimental effect on mining companies.
“Mines that are on the cutting edge of digitization may be at an advantage,” says Sabrina. The question now may be more focused on how to reduce the number of people on a mine, not just to curb the spread of a virus, but because fewer people means reduced risk and a safer working environment. There is a delicate balance between digitization and preserving jobs on a mine. “More technology means more technical jobs, which are higher-paying, but it will not replace the jobs of every single mine employee,” she says. There is a serious implication in cutting jobs, especially in developing nations where mines are major employers and communities are dependent on the mines as a source of employment. If mines choose to automate, one is hopeful that they will work with stakeholders to build the necessary skills and develop vibrant, resilient and healthy communities that are a little less dependent on mines as sole providers of jobs.
The way we did things
Corporate culture is the most visible change in the current crisis. The need to work remotely is changing and testing corporate cultures around the world. Leadership, hopefully, are realizing that they need to – and can – make changes. There are many lessons that they can learn from companies who already work remotely.
“The current global COVID-19 pandemic is an opportunity for us to re-examine our way of doing things,” suggests Sabrina. Built-in operational procedures that have perhaps thus far remained unquestioned are now creating unnecessary barriers. It is time for us to rethink why we do what we do. What made sense 20 years ago, and was enshrined in procedure, may no longer make sense.
Perhaps, what we can agree on is that the issues the mining industry faces are being brought into sharp relief as a result of the COVID-19 crisis. The social impact of mining is complex, and sometimes, where we gain in one area, we lose in another. The overall impact needs to be considered; the longevity of the mining industry and its place in a post-pandemic world needs every nuance factored in.
The current state of emergency can be used to start building a more inclusive and sustainable economy. Mining operations are being tested in this time. “This is an opportunity to build better governance systems,” says Sabrina. Boards that are strong, and that share a clear vision and strategy, these are the boards that will lead their companies through this storm.
The mining industry is facing an uncertain future where We aren’t sure if our economies will survive, experts only agree that we will enter a recession, perhaps even a depression. We will not emerge from the COVID-19 pandemic unscathed; we will change. Let’s make sure that that change brings in greater gender equity, as the disparity in our societies has been laid bare, and there is an opportunity for all industry to build greater resilience for themselves and for society.
We need to focus on sharing skills, rapid industrialization, training and building strong communities. We need to build communities that are resilient to global economic uncertainty, and we need to prioritize community health.
About Sabrina Dias
Sabrina is Founder and CEO of SOOP Strategies, a mining and sustainability consulting firm and founding Board Member of Circular Mining Association. With over 20 years’ experience, she is a thought-leading public speaker. Her first book, “Integrating Sustainability into Major Projects” (Wiley), was published this year.