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All industry sectors have been challenged by the coronavirus (COVID-19) impacts on our communities and our economies. The mining sector in particular should consider these immediate planning, decision making and risk mitigation measures.

When KPMG closed its annual Global Mining Risk survey of executives just a quarter ago, a global pandemic was not identified as a risk. Back then the top risks identified included commodity prices, access to capital, community relations and a global trade war. Just a quarter later and the global coronavirus (COVID-19) pandemic response is at the forefront of immediate mining sector planning, decision making and risk mitigation.

The World Bank, OECD and UN are all reforecasting dramatic falls in economic growth for major economies around the world, with recent scenarios seeing China’s economy at essentially zero growth.

Different commodities are facing different market pressures and price volatility with associated issues on cashflow and liquidity. In the past quarter copper, nickel and aluminium all fell up to 20 percent. Battery minerals pricing has fallen even further, while iron ore and gold have remained strong. Currencies around the world are also experiencing significant short term volatilities.

Depending on the status of coronavirus (COVID-19) infections through each jurisdiction and the reaction of governments to the pandemic, we are seeing very different laws being implemented in different states across different countries. Operating in South Africa, Quebec or Peru is very different to operating in the Pilbara or Bowen Basin in Queensland.

From a leadership perspective this means that a ‘one size fits all’ response won’t work. KPMG has been working with clients in the mining sector – and while we haven’t had time to rerun the survey, we can share what we are currently seeing and how that translates into responses that miners can adopt. Inevitably these centre on the wellbeing of people in what is first and foremost a health crisis, and then maintaining operations resiliency in light of the increasing economic crisis.

To read more about how we believe the mining sector can manage the current situation, download our report.

 

If you have any questions regarding the content of this report and would like speak to someone from our team please contact us.