The metals and mining sector has successfully navigated periods of economic challenge before - but the COVID-19 crisis is different.

 

Mining companies are navigating through what ERM has titled the ‘COVID curve’. This contains three distinct phases associated with the COVID-19 economic crisis, which we've defined as RESPOND, MANAGE and RECOVER. Success in one phase does not guarantee success in the next. Each phase has its challenges; individual companies can lead, lose-ground or even fail during any one of these. The post COVID-19 market leaders will be those that are the fastest to adapt and incorporate the demands of each phase into their operation and business models.

 

In the RESPOND phase, companies have acted rapidly to protect their people and business. Building and maintaining stakeholder trust currently is important. Memories last and stakeholder relationships can be transformed for better or worse at such times of crisis. Ensuring that the supply chain remains intact is also critical.  The MANAGE phase will see companies re-focus on production and drive operational efficiency before physical-distancing protocols are relaxed. Initiatives that include remote delivery, automation and virtual working solutions will endure. During the RECOVERY phase, a new set of value drivers will present themselves. Companies that succeed in this phase will have re-aligned their strategies to respond to the longer-term fallout from COVID-19. 

 

Mining and metal companies will be exposed to dramatic swings in market demand during and post COVID-19. Governments will face pressure to avoid protecting the 'old' economy and invest in sectors that will help combat climate change. Implementing a broad-scale green transition would require an unprecedented level of international cooperation.

 

Companies will move through the COVID curve at different speeds. They will also need to go beyond their traditional resilience formulas and collaborate with organizations across supply chains and with customers to draw the attention of capital markets.

 

They will, or should, have increased importance as companies look to build sustainable operations in a post COVID-19 world. Looking ahead, there is still significant uncertainty, naturally, around the shape of the recovery graph and the effectiveness of public-health responses in controlling the spread and impact of the virus.