Miners consider supply chains a risk issue

WHILE supply chain issues are not posing a major problem to miners at the moment, they are considered a major risk factor as the COVID-19 pandemic continues to bite.
Miners consider supply chains a risk issue Miners consider supply chains a risk issue Miners consider supply chains a risk issue Miners consider supply chains a risk issue Miners consider supply chains a risk issue

Miners are seeing their supply chains as a major risk factor.

Australia's Mining Monthly is making some of its most important coverage of the COVID-19 pandemic freely available to readers. For more coverage, please see our COVID-19 hub. To subscribe to AMM, click here.

The latest State of Play survey has found about 70% of operators feel they are facing supply chain shortages whereas only 20% of service companies think they are.

The State of Play platform was created by consultancy VCI in 2012 to support industry discussion of innovation and performance.

It has been running weekly surveys using that platform to assess the state of play around the COVID-19 crisis for the past four weeks.

VCI founding partner Graeme Stanway told Australia's Mining Monthly the surveys would probably go for another three months, although they will be spread out on a fortnightly frequency.

"It's one continuous survey that gets repeated," he said.

The survey is being sent out to VCI's entire database and Stanway said the response numbers were in the hundreds, which was a large sample to get a meaningful picture of how COVID-19 was affecting mining.

"Supply chain disruptions are quite a major problem from an operator's perspective," Stanway said.

"It is seen as probably one of the most heightened risk areas on par with their workers getting infected.

"When I talk to the executives and the CEOs they are saying supply chain is a real issue and a risk issue and they feel nervous about it going forward.

"It's a risk factor rather than an actual issue. It is not affecting production at this stage."

Major equipment suppliers told AMM they were as confident as they could be that there would be no disruptions to their supply chains at this time.

Stanway said the miners were separated into two camps.

"Some of the miners with pretty robust markets don't think about the market too much," he said.

"It's just how long this pandemic lasts. They have response plans in place.

"Then there are other companies that are a bit more diverse that we're doing work for that are more concerned with the character of the world they will come into. Those companies are more commodity price sensitive.

"I think the companies that think they have it covered and the market is there will have to be careful.

"I wouldn't be too complacent about thinking markets will be sustained even in the strong areas.

"Most people are doing risk analysis with commodities hit hard such as alumina. But others need to be looking at signs that things are getting hit."

Stanway said the miners seemed to have adjusted to the restrictions COVID-19 was forcing on their businesses fairly well.

However, he said, while productivity was probably being maintained, innovation could suffer in a time of social distancing.

"If you look at data around innovation and growth, it's about people bumping into each other and being in contact," Stanway said.

"Some of that will have to spring back. That's just such a fundamental part of how innovation growth happens.

"When you are trying to create and innovate the virtual stuff doesn't work quite as well."

There have been benefits from the virtual meetings though.

"Some of the big companies have locked in big forward savings from cutting travel," Stanway said.

"It will change the form of leadership as well. It is saving a lot of time and people will be having better family lives."

 

  • FREE coverage on the rapidly developing coronavirus pandemic. Visit our COVID-19 hub.
  • Latest COVID-19 Coverage: Pandemic no impediment. Read more.
  • Latest COVID-19 Coverage: Like sand through the hourglass. Read more

Most read Viewpoint