Hector Sosa Flores: How global mining has been impacted by COVID-19 related border closures
Mining has become a truly global operation. As the raw materials in most developed countries have been depleted, mining operations are moving abroad. Two of the areas in which mining operations have become vital parts of the economy are Central and South America.
Unfortunately, the COVID-19 pandemic has led to border closures between the United States and its southern neighbors. Mexico has also closed its borders to all but essential traffic. Making a mining operation profitable when the market for raw materials has been closed is a titanic undertaking.
Hector Sosa Flores explains how the border closures are affecting business as a whole as well as their unique impact on the mining industry.
History of the Border Closures
In March 2020, the COVID-19 epidemic caused the United States, Canada, and Mexico to close their borders to all but essential travel. These countries claimed that trucking and business operations would not be affected by the closure. However, the border closures and the COVID-19 illness have had a significant impact on supply chains.
In Latin America, most land borders have been closed to all but non-essential traffic. This would normally include mining output, but the supply of trucks and truck drivers needed to transport materials has dwindled. Truck drivers are sheltering at home with their families, and in some cases, mines have been shut down by the government. This means that the overall output of the mines has gone down and the global supply of these raw materials has dwindled.
In May 2020, most of these countries renewed their border closures. Some countries have a target date of September 1 for reopening their land borders and allowing commercial passenger flights to resume.
The Spread of COVID-19 in Latin America
Where Latin Americans previously regarded the coronavirus as a North American problem, cases have been exploding there. Particularly in Brazil, where the government leaders do not take the virus seriously, cases are increasing exponentially despite border closures and shutdown orders.
The Brazilian labor ministry (Ministerio Publico do Trabalho) has been shutting down mining operations in areas with a great deal of COVID-19 infections. One outbreak was blamed on the Vale Itabira mine. The labor ministry was concerned because workers are in closer proximity in their work environment than they are in other industries.
How Mining has Changed
At the beginning of the pandemic, many mining operations continued as usual until they were shut down by local governments. This enabled the virus to spread in close quarters. Globally, mining has been considered a hotspot for the transmission of COVID-19.
In the wake of COVID-19, some countries have entirely shut down their mining companies. Peru is one of these countries. Peru is one of the world’s leading producers of copper. Another vital supplier of copper is Chile, which has also been affected by highway shutdowns and stay-at-home mandates.
Not only Latin American operations have been affected by the COVID-19 pandemic. Mining is a leading industry in South Africa as well. In South Africa, the gold, diamond, and precious metal mines have been shut down after outbreaks of COVID-19. The mines have been given the green light to reopen by the government, but it will be difficult to reassemble the 250,000-person workforce which has gone back to their hometowns.
Mines in Russia have also been hit by COVID-19. In Siberia, a gold mine was the source of a huge outbreak of more than 1,200 cases.
Fortunately, there are some hopeful signs for mining in Latin America and around the world. Mines are beginning to reopen in many nations, including Mexico, where 80 percent of the country’s mining operations had restarted by the beginning of June 2020 according to S&P Global. This has increased the world’s supply of silver and gold.
Mines have also begun to reopen in Ecuador, where gold production is returning to normal. These operations are reopening in phases and considering the local spread of the pandemic.
Continuing Caution is Necessary
While COVID-19 border closures are not impacting mining to a serious extent, local production and mine shutdowns are having a major effect. Even as the first wave of COVID-19 is decreasing, the disease will continue to impact global mining operations, especially in Latin America. Mining companies must take social distancing into consideration since many mines around the world have been the source of COVID-19 outbreaks.
Where social distancing and business closures have not been put into place, the second wave of COVID-19 may recur and cause serious disruptions once more. Miners and other businesses must decide for themselves whether their operations are safe to resume production. When it is safe to resume mining, production can return to the conditions it experienced before COVID-19. Hector Sosa Flores emphasizes that safety should be the number one concern of the mining industry.