Production fears as lock downs increase

SO FAR the news out of most mining companies has been fairly positive. Their contingency plans are holding up and production continues. However, one miner has sounded a sobering note.
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Bill Beament has warned that measures to deal with COVID-19 will impact production.

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Northern Star Resources executive chairman Bill Beament said the company had fully mobilised its business continuity plans in response to the COVID-19 pandemic.

"However, while these measures are essential, they are creating unavoidable disruptions to normal operations and affecting gold production," he said.

"There is also the prospect of further restrictions being imposed on the movement of workers and suppliers in Western Australia and Alaska and therefore the company's outlook is becoming more difficult to predict with any certainty."

Northern Star estimates those disruptions will result in March quarter production being 10%-15% lower than expected and given the uncertain outlook, it could provide no assurances about production levels in the June quarter.

The company has joined many others in withdrawing its guidance for the financial year, given the uncertainty the COVID-19 crisis is causing.

Disruptions are only likely to increase as governments around Australia move to stricter lockdowns to try and limit the spread of the coronavirus.

Queensland has already removed the self-isolation exemption on interstate fly-in, fly-out workers unless they are in statutory roles.

Western Australia is expected to do the same and it is understood South Australia is also considering such a move.

WA is probably the state most exposed to interstate FIFO with about 3500 workers. Queensland has about 1000 interstate FIFO workers.

Miners are making efforts to relocate site critical staff to the same states as their sites. However, they are still looking at some staff shortages. Add to that the limited head counts they are running on sites at the moment and it is likely something will have to give.

WA has also been split into nine regions with people barred from crossing regional lines. Mine workers are exempt from that, however, the requirements allowing them to cross regional lines pose an additional administrative headache for miners.

Equipment suppliers are also warning that they could face supply chain disruptions due to COVID-19, which may also add to production problems.

Some companies have also been forced to suspend operations to protect the remote communities near their sites.

Northern Minerals and Trigg Mining have ceased their WA operations in WA's Kimberley region.

Geopacific Resources suspended its operations on Woodlark Island to help prevent COVID-19 spreading to there.

 

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