According to PwC’s Mine 2020 report (covering the top 40 global miners by market capitalisation) released in June, in some respects, the mining sector is well-situated to recover from the impact of COVID-19. For example, despite uncertainty regarding Brazil’s ability to continue mining in some areas, iron ore prices have risen, potentially limiting the total impact on the sector. Disruption in mining operations has also occurred in Chile and Peru. However, mining companies in general have strong finances and are mostly still operational, albeit with increased levels of precautionary controls.
The pandemic has exposed the vulnerabilities of the approach of driving down the cost of mining, (as has a focus on hyper-efficiency, lean principles and just-in-time techniques). At least for their most critical supply chains, companies may need to consider an alternative approach: improved inventory management combined with globally diversified or locally sourced and financially viable resources. This would not only de-risk mining companies against a similarly disruptive event but also help develop and build resilience in local communities. Many are already doing it; Anglo American, and BHP, among others, have announced initiatives to increase support for their domestic suppliers as a result of the pandemic.
Read PwC’s Mine 2020 report at:
https://www.pwc.com.au/industry/mining/pwc-mine-2020.pdf
