How Australian mining reacted during Covid-19

Queensland was the first Australian state to declare a public health emergency, which was followed by the closure of most businesses. However, Australia’s state, territory, and national resources ministers agreed that most construction, mining, manufacturing, and retail businesses were key for the recovery of the economy from Covid-19, and positioned mining on the list of essential sectors, allowing it to keep functioning.

As the mining industry provides numerous jobs to the people in Queensland state, the government pledged that it would focus its efforts on helping citizens keep their livelihood while ensuring maximum protection to stop the spread of the virus.

In addition, the Queensland Government reinforced the establishment of better protection of fly-in, fly-out (FIFO) workers, who are transported from big cities where they live, to work in remote areas.

The indigenous people of Australia represent 3% of the country’s 24.6 million population, but a recent government report has shown that they tend to have a life expectancy of ten years less than the national average, mostly due to the remoteness of indigenous communities, lack of employment, and poor housing.

For this reason, in light of the pandemic, the Northern Territory and the states of Queensland and South Australia restricted travel to indigenous communities at the end of March.

As miners usually employ a large number of Aboriginal people, operators had to rethink their FIFO procedures.

For example, South32, the Perth-headquartered miner, separated FIFO staff at its GEMCO manganese mine in north Australia by dividing the local Anindilyakwa people on Groote Eyla into a separate group from other workers, with the company expecting to keep these measures for a couple of months.

The state government of Western Australia also decided to regulate travel across the Kimberley region, the Shire of Ngaanyatjarraku, and parts of the Shire of East Pilbara, which are mostly populated by indigenous communities.

As part of its response to the Covid-19 pandemic in March, Australian miners BHP and Rio Tinto both introduced programmes to support the nation’s mining industry.

As part of its initiative, BHP hired 1,500 new workers to enhance its workforce operating across Australia in iron ore, coal, and copper production. As part of the programme, workers were employed on six-month contracts, with jobs covering various skills needed by BHP.

The roles include machinery and production operators, truck and ancillary equipment drivers, excavator operators, diesel mechanics, boilermakers, trades assistants, electricians, cleaners, and warehousing roles across mines in Western Australia, Queensland, New South Wales, and South Australia.

Rio Tinto, in turn, continued to recruit skilled apprentices, graduates, and Aboriginal trainees throughout March, to fill vacancies in the Pilbara region, West Australia, where the company has pledged to invest A$10bn over the next three years.

Rio Tinto has also announced that its apprentice and graduate intake for 2020 is 25% higher than 2019 and diversity has also increased.

While the Anglo-Australian giant Rio Tinto took the decision to slow down its operations in some countries, including Africa and Canada, the company’s operations in Australia have mostly remained uninterrupted.

Some additional safety measures implemented by Rio Tinto in the Pilbara region include airport health checks to monitor the health condition of incoming FIFO staff and a new two-week-on, two-week-off working schedule for its 1,200 employees in the region.

In order to maintain high safety levels and keep productivity, the company also put in place screening questionnaires and hotlines that provide employees with health assessments by medical advisors on fitness for work and fatigue management.

The Australian Competition and Consumer Commission took the decision to give interim authorisation to the Minerals Council of Australia, the Australian Aluminium Council, and state resources bodies to jointly source safety equipment.

This decision enabled 280 resource companies to join forces and work on the issue, so that miners could continue to safely operate amid the Covid-19 outbreak.

The commission clarified in a statement that the input of services and supplies is crucial and without it, “mining operations will be hampered and would not be able to support jobs, exports, families, communities, and small businesses, which depend on the industry.”

Newcrest Mining, the Australian gold and copper producer, was one of the few Australian miners to announce significant yield decline, with gold falling to nearly 17% in the three months ending 31 March.

The decline was mostly a result of lower output at the Cadia mine, situated in Paduara, and the Telfer mines, located at the Great Sandy Desert of Western Australia, along with divestment of Newcrest’s Indonesian mine earlier in the year.

The company revealed that gold production fell to 518,770 ounces during the revised period, from 623,124 ounces a year earlier, but the miner did not specify if production was also affected by Covid-19-related disruptions.

Looking ahead, Newcrest is expecting that production levels will be higher in the June quarter, as less planned shutdowns are expected.

In May, the Minerals Council of Australia called for the federal government to consider measures that would support the recovery of the mining sector, once the Covid-19 pandemic is over.

For this reason, the Council issued a document called ‘Immediate Reform Priorities to Accelerate Economic Recovery’, which contains proposed mining reforms, including lower taxes, faster project approvals, and flexible workplaces.

For example, the MCA wants to lower the current company tax rate of 30%, which it says is too high and not internationally competitive. The council has also said that speeding up environmental assessment and approvals could make a real difference and help the industry in terms of new explorations and growth.