The global financial crisis of 2008 left a lasting legacy for the mining industry and now coronavirus is providing a new threat as the cogs of China’s machine dramatically slow. While the number of cases of coronavirus 2019 in African countries is much lower than epicentres like China and Italy, Covid-19 could also threaten industry here as production slows and demand for African minerals drops off.
South African research outfit Trade and Industrial Policy Strategies (TIPS) has highlighted the threat coronavirus poses for the mining industry, saying we could suffer significant losses if a potential pandemic can’t be capped by next month.
With the virus spreading across the world, it’s no wonder TIPS and industry are worried about its potential effects on the continent.
TIPS reckons about R30 billion (US$1.95 billion) of agglomerated iron ores and concentrates exports a year are under threat, along with manganese exports to the tune of R29.6 billion ($1.92 billion).
China bought about 65% of South Africa’s exports of manganese ore and concentrates last year. Less Chinese yen on the continent could impact the bottom line just like in the GFC that many of us remember.
With Chinese demand being so important to exports, it’s easy to see why the African research institution believes it’s vital to contain the virus quickly. If factories continue to close and production closes down for good, key supply chains could be decimated.
But we can’t wait to see what happens. We must act, think and change the game.
As industry players, we’ve got to understand what’s happening. Coronavirus is a threat. There’s no cure yet but we can’t get caught up in dread. We need action not worry. Responses not indirection.
Across the world, a variety of industries are being affected by the virus - retail, hospitality, schools. Whether it’s Asian restaurants sitting empty or aged care homes on lockdown, every business must work out how to respond to the threat.
As an industry, we must plan for the worst and hope for the best. Good planning involves taking stock, so let’s jump in and SWOT — let’s set a direction as we look at our strengths, weaknesses, opportunities and threats.
Who do we sell to if not China? How do we stockpile in times of trouble? When do we scale back and wind down the recruitment drive? How do we ensure the safety of workers from the virus. If our people get sick, how do we stop the spread? When do we take a pause, if at all?
It’s always important to be prepared, but now so more than ever. Let’s rise to the occasion and set a new direction.
Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:firstname.lastname@example.org