The metals and mining industry are very intricate. These are the industries that make risk management their priority, and everything in their supply chains is driven by advanced planning and a strategic approach. However, even in such well-prepared industrial branches of the global economy, there is a tight interdependence on external factors. Mining supply chains rely on many fluctuating factors, that are (or at least turned out to be in recent times) vulnerable to unpredictable economic conditions.
How did recent events change the way mining supply chains function?
Efficient transportation, workforce, and other supply chains are irreplaceable parts of the mining industry, and all of these aspects were affected by the pandemic. Another thing to keep in mind that the value of a mine is very high in terms of market share. So, if a couple of copper mines are closed, this can account for the large piece of global production. Essentially, this greatly affects supply chains where copper is in demand. This is what happened during the pandemic. During April, steel and copper mining went down. The majority of copper mines in South America were closed because of the quarantine measures, or because the workers have tested positive for COVID-19.
The supply chain experts say that the mining industry is stronger than it seems in terms of crisis management and risk management. According to statistics, it would take more than 6 months of strict lockdowns to really hit the industry. The thing that mining and every other industry right now should worry about is the market demand and customer behavior, which eventually won’t be the same as before the pandemic. The unpredictable nature of the crisis is the most challenging part even for such an organized industry as mining.
Ultimately, mining companies should now focus on supply chain resiliency and flexibility and adjust to the new ways of functioning. While many companies try to cut costs or hinder their previous production levels, using a reliable supply chain partner can make the transition as smooth as possible.