Close proximity between thousands of workers who work underground in close spaces can act as a catalyst for the spread of the COVID-19 disease. Mining companies have, therefore, been forced to shut down operations and comply with the lockdown restrictions imposed to curb the spread of the disease.
Verdict has conducted a poll to assess the impact of the COVID-19 outbreak on mining capital expenditure (capex).
Analysis of the results shows that the pandemic is expected to have a high impact on mining capital expenditure.
A majority 46% of the respondents considered the impact on mining capital expenditure to be high, while 31% opined the impact will be moderate, followed by 15% who considered the impact to be low.
A minority of 8% felt that the pandemic is expected to have no impact on mining capital expenditure at all.
The analysis is based on 363 responses received between 06 April and 30 April.
Many of the leading mining companies reduce capex due to COVID-19: GlobalData
The capital expenditure forecast based on the 2019 figures looked promising for 20 of the world’s leading mining companies in the beginning of 2020. The capex by these companies increased by 12% in 2019 to $49.1bn and was projected to increase by 11% in 2020 to $54.7bn, according to analysis by GlobalData.
Many of the top 20 companies have now deferred 2020 capex to future years due to the impact of the COVID-19 pandemic. Rio Tinto, for example, revised its 2020 capex to between $5bn and $6bn from $7bn, while Glencore reduced capex from $5.5bn to $1bn-1.5bn.
Other companies that have announced revisions in capex include Antofagasta, which revised its capex to $1.3bn-$1.5bn from $1.5bn, Agnico Eagle, which reduced capex plans from $740m to $690m, and Fortescue, which revised its capex from $2.2bn to $2bn. Anglo American, Vale, and First Quantum have also reduced capex, according to GlobalData.