Around this time two years ago, as the pandemic rolled across the globe, it was clear its impact would be both devastating and costly. Last year Deloitte said it had already had an impact on commodity markets in a variety of ways. The services provider warned: “Company operations have been affected through isolated outbreaks and government mandated shutdowns, and the demand for many commodities remains low, with a lower near-term demand on the horizon.”
In an article, the company’s global mining and metals leader, Andrew Swart, set out his vision for the potential long-term impact of the crisis and some steps companies could take to ensure their response was “swift and effective”. A year on from that article, what could come next for the global sector, and have any of Swart’s insights come to fruition?
Andrew Tunnicliffe (AT): A year ago, what state was the global mining community in under the shadow of Covid-19?
Andrew Swart (AT): It’s important to note that the mining industry largely continued uninterrupted throughout most of Covid-19. Yes there were various mining operations that got disrupted because of Covid-19, and that needed to shut down for short periods, but the industry continued producing throughout the pandemic. I think that the industry showed itself to be fairly resilient.
Having said that, there were several key mega trends that we highlighted at the start of Covid-19 which we anticipated would likely accelerate as a result of it. They were: digitisation, decarbonisation, the future of work, increased supply chain transparency and a shift in the balance of power between corporations and governments. Consistent with what we were predicting a year ago, we have seen an acceleration in of all of these trends.
AT: How is it today, with the pandemic rolling on but countries somewhat better placed to “live with it” now?
AS: Where I think most companies struggled a year ago was around the uncertainty of the depth and severity of the pandemic. Vaccines were just emerging, but we had not yet lived through the rise of the Delta variant. A year on, we see much wider circulation of vaccines and while some regions of the world have lower vaccination rates, companies have utilised their healthcare infrastructure to make vaccines available to workers; and in most cases to the surrounding communities.
With the severity of the pandemic seemingly on the decline and the wider availability of vaccines, companies are certainly in a better position to deal with the virus and its consequences.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
AT: How have mining firms adapted in the last 12 months?
AS: Companies have stepped in where some governments around the world have been unable to do so: making their healthcare infrastructure available to communities, using their supply chains to bring in personal protection equipment, [and] helping to drive vaccines education. As an industry, they also adapted very quickly and what we saw was a high level of collaboration and knowledge sharing across the sector on how to deal with different situations and share best practice .
AT: Where might some have things got wrong?
AS: There is frankly not a lot that I would point to. However, what I would say is that miners are increasingly going to have to attract talent outside of their traditional recruitment pools. What will be important for many of these workers is flexibility, the opportunity to work remotely, [and] not operate in a traditional command and control structure, [as] workers look for highly inclusive workplace environments.
Covid-19 has accelerated these issues and companies that are focused on these will win the talent wars. For a large segment of the industry, adapting to these expectations will be difficult.
AT: Whilst the pandemic presented its challenges, this time last year you were very keen to point out the possibilities too. Did those possibilities hold true and did miners make the most of them?
AS: We still believe in these possibilities and if you look through our trends this year, you will see these reflected. We continue to believe the industry is going through a substantial transformation, largely driven by environmental, social and governance pressures and expectations. There are significant chances for the mining industry to embrace these opportunities, but as we know this is an industry that is often slow to adapt and adopt new practices.
AT: What are the challenges the sector faces today, in particular as a result of the pandemic, and what mining companies do to counter them?
AS: Much like many other industries, one of the most significant challenges is talent; attracting and retaining diverse talent in the industry and making this an attractive industry for new talent to consider. Across all industries we have seen the “great resignation” and the mining industry is no different.
AT: Finally, last year you proposed a series of “questions execs should be asking”. Could you tell us a little about those questions?
AS: We encouraged executives to embrace scenario thinking as a tool to navigate uncertainty. At the start of the pandemic we were navigating a highly uncertain environment around the depth and severity of the pandemic, the extent to which we would see a coordinated global response versus regional fragmentation. We used scenarios as a tool for companies to stress test their strategies under different scenarios, and how their companies would perform in those worlds.
Today, as we are moving towards a more ’endemic‘ environment, many longer term uncertainties persist around areas like climate change, speed of technology development to aid decarbonisation, battery technologies that might drive demand for certain minerals and of course wider geopolitical uncertainties. The environment, in many ways, is becoming more and not less uncertain; so it’s critical that scenario thinking gets embedded into the planning cycle and companies stress test their plans going forward.