The World Health Organisation (WHO) has declared the COVID-19 outbreak a pandemic. At the time of writing there are over 400 000 confirmed cases across 194 countries. Even the most optimistic analysts expect a global recession.
Mining companies have been affected by COVID-19 outbreaks, and global restrictions to encourage social distancing have meant that mining projects have either slowed or been put on hold until further notice. There is no doubt that mining executives are beginning to feel nervous as the spread of the virus accelerates.
Share-prices of listed mining companies are in a downward spiral. Commodity prices across the industry have been tumbling as the industry considers the devastating aftershocks of this “Black Swan” event. To single out one example: platinum and palladium prices have dropped by more than 40% in just three weeks.
Mining companies are feeling the pressure, despite recent positive results brought by surging commodity prices and various cost-cutting initiatives. South African miner Sibanye-Stillwater’s share price has lost over 60% in the past four weeks while Impala Platinum has lost a similar percentage, and Anglo American is down by as much as 40%.
The response to the pandemic from governments and markets has shaken the mining industry. Restrictions imposed on mining companies has seen production shut down across multiple markets. Alta Zinc has shut-down production at its largest project in northern Italy. In Mongolia, Rio Tinto suspended non-essential operations following the country’s first confirmed COVID-19 diagnosis.
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