Many governments around the world imposed restrictions and regulations on various industries including mining in order to prevent the increase in COVID-19 cases. Operations in the Americas and Asia were grossly affected and are among the areas that will record the huge decreases in mineral growth and output this year.
The data is in line with a report that was released by Fitch Solutions. The report shows that the production of ores in Peru, Indonesia and China has been affected hugely while Iran, Russia and Australia have only been affected marginally by the COVID-19 disruptions.
In relation to mineral output this year, copper and tin face the largest declines on account of mass concentration of tin and copper projects in the Americas and Asia. Globally, iron-ore and gold production will remain strong this year because of the high pricing for the metals. Also, the mines of these minerals are located in countries whose mining operations were only slightly affected by the pandemic helped.
Additionally, Fitch Solutions forecasts a 4% MIV for Asia, in comparison with last year’s figures. Also, the forecast for growth in production for China has declined by a 3% average from earlier levels.
For the Americas, a mining industry value decline of 5.6% is forecasted. This is mainly because exports, investment and output were affected by the unyielding policies in some countries.
Fitch Solutions also notes that Mexico, Ecuador and Peru had the sternest policies, which led to a decline in the mining sector’s activities, noting that only critical projects took place for about a month or more.
Europe and Africa were only slightly affected by the disruptions. However, due to low costs of the minerals, some mining firms may record interference with their production. Sub-Saharan Africa has a 1% mining industry value contraction forecast as a result of the low mineral prices and local lockdowns that caused logistical obstacles, thus influencing the output level.
However, despite the disruptions in revenue and mining operations mining companies are facing globally because of the pandemic, they are persevering without bankruptcy filings or notable increases in debt.
Fitch Solutions claims this is because companies were better equipped to handle such a situation following the Commodities rout of 2015.
For instance, BHP Group (NYSE: BHP) of South Africa reported a decline of 5% in its Ebitda at the end of their financial year this June but also recorded an $8billion profit. Such numbers show that the mining industry as a whole is quite resilient, and this is good news for investors and the public.
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