Energy SpecificMining
Disruption and tensions: how Covid19 could impact mining

As Covid-19 sweeps the world, the mining sector is just one of many that has been adversely affected. With quarantines preventing people and employees from meeting up to work, to uncertainties across the supply chain affecting commodity prices, we consider some of the impacts of the pandemic on the mining sector, and whether any good can come from this uncertainty.

The Covid-19 pandemic has spread around the world, affecting people at an unprecedented rate and sending many businesses and communities into taking desperate quarantine measures to protect themselves and those around them; and mining has not been spared from the outbreak.

Miners across the world, both local operators and international giants, have taken steps as drastic as closing down mines or quarantining whole parts of their operations, in order to protect employees and prevent the spread of the virus. Yet in a sector that is highly reliant on effective and predictable operations within its supply chain, any deviation from traditional working practices can trigger intense uncertainty, and threaten both production and profits. With this in mind, the pandemic has already affected mining operations and the trading relationships building upon them, and has left the future of the industry shrouded in doubt.

Workers at risk

The tight working conditions of mining facilities means workers are at the greatest immediate risk, and mining operations around the world have been placed into shutdown. The Democratic Republic of the Congo (DRC), imposed a two-day lockdown in late March in the Haut-Katanga province, following the news that two people tested positive for Covid-19 in the provincial capital of Lumbabashi, while China Molybdenum’s Tenke Fungurume Mining placed its mine in the Lualaba province under quarantine.

Similarly, the Atla Zinc has shut down its Gorno mine in Italy, shutting off access to up to 3.3. million tonnes of reserves as the pandemic hits Italy particularly hard.

Production hits and financial losses

The Gorno mine closure is not the only operation to impede production, as mines around the world have been thrown into uncertainty; 21-day nationwide lockdown in South Africa has unsettled the platinum group metals industry, with the country responsible for 75% of the world’s platinum production.