From economists to scientists, political sociologists to business leaders, 2020 has been a pageant of theory, each trying to catch the falling knife that is COVlD-l9. So far so good for the mining sector.
Mark Cutifani, Anglo American’s boss, materialises on the other side of a Team meeting. He's his normal self, obviously: buoyant and friendly. Working sans office is okay, he says; in fact, some work processes have improved (see ‘Gaga over video’ box on p.8). Still, it must be frustrating for a people person like him.
“We‘re planning work more effectively we've learned how to get smarter in certain areas.” What’s less certain are the long—term effects of COVID-19 on the mining sector, and what adaptations will take place.
According to a report by the World Bank, there’s an immediate risk to global value drains (GVCS). These are the trading economics and logistics that connect miners to customers and consumers. The bank says they are showing signs of unravelling. For instance, national security concerns regarding the reliability of supply of critical equipment, such as personal protective equipment, may start to favour local production, it says.
This would potentially lower transport demand as it would reduce the average distance of imports. “All else equal, this would result in permanently lower oil demand as GVCs are more transport-intensive than other forms of trade," the bank said. “It could also lead to shifts in the source of commodity demand as manufacturing hubs shift.”
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