Virus could hamstring Aussie mine efficiency

THE COVID-19 crisis may have far ranging effects on the productivity and efficiency of mine sites – especially if it lingers beyond the next three months.
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The obvious and immediate impact of the crisis is limitations on the transfer of mine site personnel using fly-in-fly-out models across state boundaries and within mining communities. 

While this will undoubtedly create problems for mine site operations - both socially and at an operational level - a more insidious problem could be the disruption to the supply chain.

Many original equipment manufacturers to the mining industry supply operate on a just-in-time basis.  

This is a supply method refined by Japanese automobile manufacturers that utilises robotics and computer controlled logistics management to ensure as little expensive capital equipment is kept in the inventory as possible.

Many OEMs have succeeded in overcoming the tyranny of distance and provided their mine site customers - many of whom are located in remote parts of the country - with parts and equipment in a timely manner.

However, the constraints and shortage of interstate air travel, not to mention the closed borders in states such as Queensland, will make it increasingly difficult to deliver needed parts and service at the mine gate as it was previously.

This has implications for the utilisation rates for capital equipment, its reliability, and ultimately its safety.  

Mine management can plan maintenance shut downs to some extent but cannot predict when and how equipment fails.

Globally, the political fallout could be just as damaging.

Barriers are already being talked about that would limit trade to within nations and exclude others.

The Australian mining industry relies on the free exchange of mining equipment from manufacturers - many of whom are located offshore.

Australia's METS sector generates more than $90 billion annually in revenue, employing about 400,000 people and exports to more than 200 countries globally.

According to Deloitte research Queensland's Bowen-Surat region had a total economic contribution from mining and METS of $18.6 billion, which represented about 63% of total regional economic activity; while the Hunter region of New South Wales had a total economic contribution from mining and METS of $15.2 billion, representing about 34% of total regional economic activity in 2017.

While these figures are impressive, we are not self-sufficient in mine equipment and growing protectionism may end up choking up exports for our local METS suppliers.

Hogsback reckons the competitiveness of our local coal mining industry is at peril because of the dreaded COVID-19 virus.

New strategies will be needed in the future to protect and grow the supply chain if current productivity levels are to be maintained.

 

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