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Managing the practical risks of COVID-19 in mining

How have global mining companies mitigated the impact of COVID-19 and what are the longer term prospects for the sector?

Ali Boroumand, Head of Mining & Minerals and Simon Naylor, Associate, at DWF
|Jul 18|magazine9 min read

The global COVID-19 pandemic has required mining companies to act quickly in shoring up their business operations, taking steps to ensure their staff can continue to work in a safe environment, whilst also supporting the local communities in which they operate. 

Social distancing guidelines are already forcing mining organisations to impose strict limits on access to mine sites and manufacturing facilities, with day-to-day head counts reduced accordingly. 

Companies are modifying shift handover processes by staggering entry/exit timings and implementing virtual handovers to reduce contact. Whilst non-essential maintenance work will likely be postponed, mine operators will need to ensure that plant and equipment continues to be serviced, lest an additional risk of dangerous machinery arise in conjunction with the virus spread. 

Social distancing of course reaches beyond the working area. 

Onsite camps and facilities which service the mines in remote locations will need to adhere to the same processes. Organisations will need contingency plans in place should a COVID-19 case be detected at a site to mitigate against a widespread outbreak. 

Investment in testing facilities, PPE and access to medical professionals are a necessity, especially given the lack of availability of such resources in isolated mining areas or in jurisdictions where the public health sector is in distress. 

Some mining companies operating in remote regions of West Africa are going a step further. Endeavour Mining has for instance invested in ventilators and other medical apparatus to ensure that a level of medical care is available to their employees in regions in which they would otherwise not have access. 

Mine operators have also been providing access to these facilities to local communities, who are usually directly or indirectly linked to the operation of the mine. Companies who make such provisions can take comfort from a CSR perspective whilst also fostering productive, long-term relations with local communities. 

The pandemic presents an opportunity for mining organisations to rethink how they do business in particular in case of a second wave of COVID-19. Mine operators have long-since accepted that artisanal miners, independent miners who are not employed by the mine operator, will invariably set up in close proximity to a mine, sometimes even trying to gain access to the site itself. 

We are seeing examples of mining companies investing in initiatives to assist, legitimise and regulate artisanal mining. 

Allowing access to the same testing, PPE and medical facilities to artisanal miners could prove mutually beneficial to both parties. Mining companies have previously felt the reputational damage caused by a safety incident involving artisanal miners – managing the risk of a Covid outbreak amongst artisanal miners is therefore an important step for companies to take.

Whilst mining companies should be applauded for taking a "good citizen" approach, they must remain mindful of the extending reach of international bribery legislation. 

Corporate Governance departments will need to record what funds or facilities have been made available to local communities or artisanal miners, with an explanation that no commercial advantage is to be gained from such a move. 

This is of heightened importance if any CSR initiative or other offers of medical or financial assistance is made with the involvement of a central or local government official. Mining companies should have in place a detailed and considered bribery risk assessment, on which local level training is provided, to mitigate the risk of such suggestion of improper payments being made. Record keeping in this regard has arguably never been more important.

Companies should consider what additional steps they can take to help their employees (and their families) and other key stakeholders through this uncertain time. 

Those who adapt and improve their business operations to minimise the risk to the health and safety (including covid-19 and other pandemic risks) to their employees and contractors are likely to secure a competitive advantage against their competitors for years to come resulting in increased sales and profits

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