THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
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THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
THE IMPACT OF COVID-19
ON EMPLOYMENT IN MINING
1. BACKGROUND collapse, creating a perfect storm for a
looming deflationary economic crisis.
COVID-19 is possibly the most disruptive
global event since the 1929 Great Mining is an economic bedrock in many
Depression. resource-rich countries, with developed and
developing nations alike benefiting from
Though it is a health pandemic, COVID-19 its meaningful role in poverty reduction,
has grown into an unprecedented social inclusive growth, and social development.
and economic global crisis. International Like other economic sectors, however, the
institutions1 are revising the world’s mining industry has not been spared from
economic outlook regularly throughout the negative consequences of COVID-19
the outbreak. Within the first few months, outbreaks. Tight working conditions at mine
revisions are worsening and are likely sites are placing workers in the frontline in
to become more severe, depending on terms of health and safety risks, prompting
the speed and scale at which economic the industry to quarantine workers when
activities recover. national lockdown regulations did not force
them to do so.
COVID-19 is unleashing multiple economic
shocks. On the supply side, lockdown This briefing note looks at the impact
measures are disrupting global supply of the pandemic on employment in the
chains as a result of sudden factory mining sector and provides an overview of
closures and the temporary suspension immediate responses taken by governments
of air, maritime, and land transportation, and mining companies. Acknowledging
among others. On the demand side, that this crisis is unprecedented—and such
restrictions on the movements of people events may occur in the future—the paper
and the closure of non-essential economic suggests additional measures governments
activities have significantly cut down on and the mining industry, individually or
consumption. These are leading to massive collectively, could take to strengthen the
capital outflows from emerging markets as resilience of employment in the sector
investors’ confidence tumbles, exports and moving forward.
revenues decline, and commodity prices
1THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
The paper highlights three key issues: Relief The viability of the mining sector is
packages must look to the long term. To heavily reliant on stable and predictable
be truly effective, relief packages must be market conditions and functioning supply
designed strategically to respond to the chains. Any major disruptions to the global
realities of the labour situation, both now economy can result in acute uncertainties,
and in the future. threatening production and productivity,
with consequences for workers, suppliers,
New regulatory frameworks and and local economies.
investments must be developed. As the
global economy recovers, mining activities While large-scale mining contributes
will slowly resume, but we will not be significantly to many developing countries’
able to afford business as usual. New national incomes, it is not a major direct
and permanent protocols and working employer due to its capital-intensive nature.
conditions will have to be established, which According to ICMM2, the mining industry
will require new regulatory frameworks and directly contributes around 1%–2% of total
investments. employment in a given country.
The mining sector must create resilient However, two important factors must be
safeguards. The industry needs to build underscored:
resilience to insulate the labour market and
supply chains against the inevitable repeat Large-scale mining plays a critical
of similar events. economic and social role in remote areas.
Large-scale mining activities are localized
in remote areas with underdeveloped or few
2. IMPACTS OF COVID-19 ON major alternative economic sectors. Mining
EMPLOYMENT IN MINING plays a critical role for host communities,
where it is often the largest—if not the sole—
Up to 305 million full-time workers in all job creator and provider of vital services,
economic sectors around the globe could including a variety of social services, such
lose their jobs in the second quarter of as health care and education.
2020 due to COVID-19. These losses may
disproportionately impact lower-income Large-scale mining creates more business
countries, given their weaker health in host countries. Mining activities have
institutions and sanitary conditions, the significant multiplier effects on the local
number of workers in the informal sector, and national economy through the creation
migrant workers and/or workers holding of indirect and induced employment and
precarious jobs elsewhere, and the limited business opportunities. ICMM3 estimates
fiscal space governments have to mitigate those opportunities can contribute up to
the impacts of the forthcoming recession. 15% of national income in certain countries.
COVID-19 is exposing the weak points of
global labour markets. Mining companies
of all sizes are radically slowing down
or halting their operations while workers
are forced to stay at home. While new
technologies and Internet connectivity
allows many employees to work remotely,
this option is not available equally to all
economic sectors or companies and does
not apply to all jobs.
2THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
FIGURE 1. EMPLOYMENT RISK HEATMAP FOR MINING COMPANIES ALONG THE MINING VALUE CHAIN
Exploration Construction Extraction / Mineral Closure and
operation processing decommissioning
HIGH- MID-TO MID-TO
HIGH-TECH LOW-TECH
LABOUR INTENSITY CAPITAL HIGH-TECH HIGH-TECH
LOW JOBS HIGH JOBS
ID-JOB MID-JOB LOW JOB
Risk level per group of workers
Direct employees
Highly skilled
Technical
Low-skilled
Contractors
Suppliers
Suppliers of goods
Service suppliers
Risk scenarios that can exacerbate the impact on employment
Extended lockdown, with negative implications on employment, productivity, and future investment plans
Stop-go policies due to new waves of virus spread, causing new lockdowns
Credit crunch facing less resilient mining companies (juniors, mid-sized companies etc.), leading to reduced operations and
investments
Local supply chain risks and knock-on effects on jobs, due to bankruptcies of SMEs
Lower investors’ confidence in the future global economic prospects
Commodity price slumps* due to uncertainties over global demand and/or supply of raw materials recovery
Low Low - med Med - high High
*See S&P Global analysis: https://www.spglobal.com/marketintelligence/en/news-insights/research/covid-19-impacts-to-metals-prices-
volatility-is-here-to-stay-part-1 and https://www.spglobal.com/marketintelligence/en/news-insights/research/covid-19-impacts-to-metals-
prices-volatility-is-here-to-stay-part-2
Source: Author diagram.
Workers are being temporarily laid off at Specific parameters determine the demand
mines and across supply chains due to for labour. During the production phase,
mining operations scaling down as national the types of operations, the degree of
lockdown restrictions take effect. The mechanization or automation, the types
heatmap in Figure 1 shows the variations in of minerals being extracted, geological
labour intensity and employment risks for specificities, and other criteria will determine
different groups of workers across the mine the demand for labour.
life cycle. The key takeaways are:
Breadth and depth of local supply chains
Labour requirements are not the same is crucial. Local procurement creates
across the mining investment cycle. Demand employment spillovers through the
for labour varies according to the number of development of business activities to
projects and their levels of development. The service the mines. Induced employment
construction phase, for instance, requires opportunities are also created in the local
a larger number of contractual workers community, through satellite economic
to build mining facilities compared to the activities such as hotels, restaurants, shops
operational phase. etc. The deeper the linkages, the higher the
impact on indirect and induced jobs.
3THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
2.1 IMMEDIATE IMPACTS Employment status affects job security
Markets, supply chains, and employment and salaries. Not all employees have the
are immediately impacted as many same status within mining companies. In a
governments impose sudden national nutshell:
lockdown restrictions to limit the virus • Some mine workers are considered
spread. “essential staff” because they perform
tasks necessary for the functioning
2.1.1 IMPACTS ON MINING ACTIVITIES of operations. These workers maintain
Impacts on mining activities vary their jobs and salaries.
significantly across countries, depending on • Others who are able to work remotely
the following factors: retain their activities and salaries.
National policies enforcing lockdown. Some • Workers who do not fall under the
countries have imposed lockdowns whereas two categories above are temporarily
others consider mining an “essential service,” demobilized. They are more vulnerable
allowing activities to continue under certain to income cuts if there are no
conditions. agreements and safeguards in place.
• The situation is more complex for
The health situation at the mine sites. contractual workers, such as fly-in,
Some sites closed operations to limit the fly-out (FIFO) and drive-in drive-out
spread of the virus among workers and local (DIDO) workers, and informal or cross-
communities. border migrant workers. Layoffs imply
The commodities at stake. Energy the loss of any means of subsistence,
commodities, such as coal, are exempt and workers who are already ill-
from national lockdowns. Metals, such equipped to face hardship (in the
as zinc, copper, nickel and iron ore,4 are absence of social safety nets and legal
more severely impacted, seeing price and protection for their rights) are likely to
production declines as a result of global be hit the hardest.
industrial collapse. Gold,5 a safe haven National legislation determines job
during crisis periods, sees its price increase and salary security in exceptional
as production continues. circumstances. Most countries allow
mining companies to follow the “no work,
2.1.2 IMPACTS ON DIRECT EMPLOYMENT AND
no pay” principle, meaning demobilized or
SALARIES
temporarily laid off staff are not entitled
Jobs in underground mining face higher to remuneration if no tasks are performed.
risks. Underground mines can be a vector However, as part of the suite of measures
for faster virus spread because activities to prevent economic hardships, countries
require large groups of workers to descend are executing payment schemes to support
into the mines in packed elevators. companies in keeping jobs and paying
salaries. Some large mining companies
Some countries, like South Africa,6 initially
guarantee the jobs and salaries of their
ordered all underground mining activities
permanent staff during lockdown periods,
to be placed on care and maintenance to
while others are negotiating with unions to
protect workers. In other countries, like
reduce wages.
Poland, industries themselves temporarily
closed underground mines to limit the
spread of the virus after cases were
confirmed at mine sites.
4THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
Status of project development has an of insolvency and bankruptcy because they
impact on the numbers. As highlighted in have less capital cushion and less financial
Figure 1, the construction phase is more resilience to weather market disruptions
labour-intensive. For example, the 15-day and reduced orders.
quarantine in Peru slowed work on Anglo
American’s major Quellaveco copper project Many local suppliers are supported by
to protect workers, demobilizing at least deliberate or mandated local content
8,000 out of the 10,000 construction policies. However, unless mining companies
workers pending safer conditions to restart agree to continue to source goods locally
project development. The company did not and have the capacity to stock, a prolonged
guarantee the salaries of those workers, as lockdown will undoubtedly pose serious
projects were contracted out. threats to the viability of these carefully
cultivated upstream linkages.
Even when countries have not imposed
limitations on mining operations, 2.2 LONGER-TERM IMPLICATIONS
restrictions on the movement of people The COVID-19 pandemic will have longer-
and supplies defer project development. In term consequences on employment in the
Mongolia, Rio Tinto’s Oyu Tolgoi underground large-scale mining sector as a result of the
development project expansion is slowed following:
due to limitations of access of staff,
construction workers, and technical 2.2.1 MINING CAPEX FORECASTS AND CURRENT
specialists. INVESTMENTS
2.1.3 IMPACTS ON LOCAL SUPPLIERS AND According to GlobalData, prior to COVID-19,
COMMUNITY ECONOMIC ACTIVITIES CAPEX expenditure was projected to
increase by 11% in 2020. A number of
COVID-19 severely affects the sourcing of projects are now delayed and investments
local and global inputs. At the local level, put on hold. The top 20 mining companies
slowed economic activities and temporary have announced significant cuts in their
business closures considered “non-essential” CAPEX for 2020: Glencore plans to cut
cause difficulties for local procurement of CAPEX expenditure plans from USD 5.5
mining goods and services. billion to USD 4 to USD 4.5 billion; Rio
In general, governments are adopting a Tinto cut at least USD 1 billion from an
pragmatic approach to limit disruptions initial prevision of USD 7 billion; and Anglo
in the supply of goods and services to the American revised its CAPEX guidance by
mines. In South Africa, Argentina, Brazil, about USD 1 billion.
Chile, and Panama, frameworks were Those companies whose CAPEX is in non-
established for the continued supply and US currencies may be negatively affected
transportation of essential services to the by the rise of the US dollar against most
mines. other currencies; some projects may be
Jobs and local suppliers’ earnings are shelved until more favourable exchange
severely impacted due to the pandemic. rates are once again in play. Deferred
Collapse of demand and disruptions in projects will necessarily affect jobs in the
production lines from mining companies sector, either through temporary layoffs or
temporarily closing, or under care and fewer employment opportunities, including
maintenance, will burden economic for temporary construction jobs.
activities in local communities. Small and
medium enterprises (SMEs) face higher risks
5THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
2.2.2 STRUCTURAL CHANGES IN EMPLOYMENT provides lower risks of disruptions, lower
MODELS transportation costs, shorter delivery times,
COVID-19 is highlighting shortcomings in supply stability and resilience, and more
the labour market. In Australia, the virus is benefits to the local economy long term.
prompting many companies to reduce their
FIFO and DIDO workers due to restrictions 2.2.4 DRIVE TOWARD AUTOMATION
on travel within the country. This will leave a Mine sites are temporarily closing to prevent
permanent mark on the employment model the spread of COVID-19 to employees and
with two possible consequences: increased local communities. Mechanized mines with
opportunities for local employees or an fewer staff have not slowed their operations
accelerated pace of automation of some to the same extent as labour-intensive
tasks to reduce future risks. mine sites, as experienced in the automated
Pilbara mines in Australia, which have
In other countries, closed borders are halting
recruited more workers as development
the temporary use of cross-border migrant
projects continue, and Syama mine in Mali,
workers, with direct consequences for those
whose production remains uninterrupted
workers’ livelihoods and remittances. For
despite the crisis.
instance, Mozambique and Lesotho are
important providers of migrant workers to Mining companies may be considering
South African mines, though border closures longer-term solutions to prevent similar
and dwindling activities prevent many from risks in the future. One solution is labour-
working. This may affect the long-term use saving technologies, such as automation.
of migrant workers in South Africa, where While uptake for some automated
unemployment rates are high. The pandemic technologies (like self-driving haul trucks
may also prompt migrant workers to join and remote operation centres) has been
unions and/or negotiate better working slow so far, we may see their use accelerate
conditions in future contracts. as companies look to improve productivity
and reduce costs.
2.2.3 SECURING LOCAL ACCESS TO CRITICAL
SUPPLIES IN A CHANGING GLOBAL SUPPLY CHAIN The pandemic may accelerate the pace
of technological adoption already in the
The sudden disruptions in global supply
pipeline. However, it is unlikely COVID-19 will
chains are exposing mining operations’
be determinant in fast-tracking the move
dependency on global sourcing, despite
toward full automation8 in the near future.
governments’ efforts to improve local
This is in part because of the complexity
content regulations. The compounding
of the industry, the cost of technology,9
effects of national policies to close borders
significant differences in the ability to run
and factories, delays in inputs and deliveries,
robots in various environments, and the
and rising costs7 of global sourcing
likely aversion of investors to big changes in
exacerbate risks of overdependence on
operational models, particularly where there
these global markets.
are such uncertainties about the future.
We may also see companies change their That said, some operations deliberately have
practice of choosing low-cost suppliers not introduced labour-saving technology
overseas to supporting localization of part for fear of backlash from workers and host
of their supply chain, particularly critical governments, though those barriers may
supplies, if industrial capabilities exist and now be significantly lowered.
local businesses can guarantee quality
and standards. Though localization can
increase costs in the short term, it also
6THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
3. SHORT-TERM RESPONSES get back to work, with some12 publishing
safety guidelines for mines operating during
PROVIDED BY GOVERNMENTS, COVID-19.
COMPANIES, AND UNIONS
Mining companies13 are taking similar
Given the limited space for monetary policy measures to prevent the virus spread
actions, all countries—developed and across their operations for their workers
developing alike—are taking unprecedented and communities. One example is Anglo
budgetary measures to insulate, or at least American’s “WeCare” program, which
limit, the economic and humanitarian shocks covers its 90,000 employees and full-time
of the pandemic through extraordinarily contractors globally during the pandemic.
large stimulus packages. Many companies have contributed to
National Solidarity Funds14 to back extra-
Even if the spending details of most stimulus budgetary efforts of governments.
packages remain unclear, the majority
contain emergency measures to facilitate Workers’ unions play a particularly important
access to health care and bridge public role in calling upon governments and mining
health gaps, specific measures to support companies to close mines to protect workers
local businesses, in particular SMEs, as well and to guarantee some forms of social
as social safety nets in support of the most protection. In South Africa, the Association
vulnerable and disadvantaged individuals of Mine Workers and Construction Unions
and households. Fiscal support packages in went to court to request adequate health
advanced economies10 have laid the ground and safety guidelines and protocols to
for recovery. protect mine site employees.
3.1 MINING DECLARED AN “ESSENTIAL 3.3 MEASURES TO PROTECT EMPLOYMENT
SERVICE” AND LABOUR INCOME
Despite strict economic lockdown policies, This unprecedented economic lockdown
many countries have allowed mining will have sweeping consequences for
activities to continue. Governments in employment and labour income. Most
countries like Canada, Australia,11 South governments are providing temporary
Africa, The Philippines, Peru, Brazil, and income support across all sectors, with
Colombia have declared mineral exploration, beneficiaries including furloughed workers,
processing, and related supply of goods workers forced to work fewer hours, and
and services as essential services. These self-employed workers unable to have
measures allow workers that are critical for an economic activity during national
operations to go back to the mines, under lockdown periods.15 Lower-income mine
strict sanitary conditions. They also allow and contractual workers are also eligible for
supply chains to start functioning again. those benefits.
3.2 MEASURES TO SECURE THE HEALTH OF Some governments are also taking measures
EMPLOYEES AND PREVENT THE SPREAD OF to protect all employees’ rights, such as
DISEASE obligations for companies to pay insurance,
pension, and health contributions during
The pandemic is first and foremost a emergency situations. This is the case in
health crisis, with countries increasing their Chile, where the government enacted the
health spending budgets. With respect to Employment Protection Law in April 2020 to
mining, many governments are establishing protect families' income from loss of work.16
strict rules as a condition for workers to
7THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
Most large mining companies have rolled they have sustained contracts. Normal
out corporate plans, setting out immediate payment terms are guaranteed for orders
actions to ensure the protection and safety passed prior to national lockdowns. Other
of workers, livelihoods in their communities, measures to help with their cashflows
and payments of their regular local suppliers. include accelerated payments for
outstanding orders and reduced payments
Many countries apply a “no work, no pay” terms to support Indigenous communities,
principle, meaning companies are not legally like BHP in Australia, or advanced payments
obligated to pay their workers during a to local SMEs for orders passed, even before
government shutdown. However, in many invoices were due, like Vale in Brazil. In South
countries multinational mining companies Africa, companies with enterprise or supplier
have agreed to pay the salaries of their development schemes, such as Petra
permanent staff, at least during national Diamonds, Anglo American and Exxaro18 are
lockdown periods. In Australia, mining providing payment holidays, in particular for
companies are providing extended and SMEs, in respect to interest and repayment
paid-leave support to their employees and on loans.
contractors who required self-isolation
or have health vulnerabilities. Similarly, in In Chile, the decision of Codelco to
South Africa,17 Anglo American is paying the temporarily suspend its contracts with
basic salaries of all of its 45,000 employees, suppliers has prompted contractors to
guarantee their housing allowances and negotiate the issuance of guarantee
paying the contributions to medical and tickets and replace them with general
pension funds during the lockdown period. insurance policies to release liquidity to
allow contractors to have credit capacity.
3.4 MEASURES RELEVANT TO LOCAL BHP has established a USD 25 million fund
SUPPLIERS to support its own contractors19 and is
To prevent massive bankruptcies and taking a significant portion of the cost of its
limit challenges faced by local suppliers, contractor companies to sustain the salaries
governments and mining industries are of demobilized workers.
taking measures to support local businesses
and SMEs. Most of those measures are 3.5 FISCAL MEASURES
aimed at limiting their financial risks. Many large stimulus packages provide
generous cross-cutting temporary measures
In Argentina, a government measure such as tax relief and refund, not only to
helps mining suppliers collaborate with households but also to companies.20 Chile,
contractors to evaluate compensation or for instance, has temporarily suspended the
minimize demand disruptions. In Mexico, monthly provisional payments of corporate
the Mining-Metallurgical Operation Best income tax21 and postponed VAT payments22
Practice Guide: Health Contingency 2020 for three months to free up liquidity for those
SARS-CoV2 (COVID-19) recommends companies. Specific measures are provided
SMEs that are part of mining value chains for SMEs through anticipated income tax
should be given special consideration and refunds23 and postponement of income tax
supported economically. Many government payments. Many countries are taking similar
measures, although not specifically targeted measures, and although not mining-specific,
at mining suppliers, remain relevant for those some of those measures would also apply
meeting the required conditions. to the mining sector. Measures for SMEs are
Although many mining companies are also set to benefit suppliers of goods and
sending Force Majeure notifications to services to the mining sector, if the latter
suppliers, some support those with whom qualify under the limit of sales prescribed.
8THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
Lower global demand and reduced The unprecedented stimulus packages and
operations are causing a decline in certain corporate plans are critical to slowing down
mineral prices, pushing some companies the socioeconomic hemorrhaging. However
to seek temporary relief from their tax necessary, in and of themselves, those
obligations. Other parts of the sector (such temporary measures are not sufficient to
as gold) are thriving, and governments resolve systemic challenges and prepare
should carefully target any tax relief to those the economy and the labour force for future
companies that are in serious financial crises.
distress.
Governments and mining companies must
The IGF prepared a guidance on Mining Tax therefore work collaboratively to find durable
Policy Responses to COVID-19, with policy solutions to improve the resilience of both
recommendations to support impacted the labour market and supply chains.
people, protect economies, and what
governments should consider when providing 4.1 RELIEF: SHIFTING FROM BLANKET
tax relief to the mining sector. MEASURES TO TARGETED SUPPORT
Most relief packages provided by
3.6 CORPORATE SOLIDARITY FUNDS governments are general and cross-sectoral.
Many mining companies are strengthening To make them effective for the mining sector
their community initiatives. In Australia, in the long term, measures must be tailored
BHP established an AUD 50 million Vital to respond to the realities of the labour
Resources Fund to support local and situation in the sector. They must also be
regional health networks and other essential appropriately framed, bearing in mind what
community services. The company intends the future of work will look like. For instance:
to use the fund post-crisis to complement (i) Any COVID-related short-term
government initiatives for training purposes. support given to mining companies,
Similar initiatives are reported across many contractors, and suppliers must be
mining companies in South Africa, Canada, made conditional upon keeping jobs
Namibia, and Botswana. and salaries during the pandemic.
(ii) Minimum wages and social protection
4. MOVING FORWARD: WHAT schemes applicable to mine workers
OTHER ISSUES SHOULD must be reviewed to ensure non-
permanent staffs, such as temporary,
GOVERNMENTS AND MINING contractual and migrant workers, are
INDUSTRIES BE THINKING OF? also adequately covered.
(iii) Workers’ contracts, in particular
The COVID-19 pandemic is considered by
for non-permanent staff such as
many to be a black swan event: a rare and
temporary, contractual, and migrant
unexpected crisis with unpredictable short-
workers, must provide more security
term impacts but long-term consequences,
during unforeseen circumstances.
including on people’s livelihoods and global
economies. However, it is not unlikely that (iv) There needs to be a consistent
in the future, the mining sector will have to application of minimum standards with
face similar recurrent global events, such as regards to health and safety to protect
those resulting from rising climate change all workers, across all mining companies,
risks or disruptions due to geopolitical within a given jurisdiction.
uncertainties.
9THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
(v) It is important to formalize social (iii) Measures need to extend to the local
dialogue, including with labour community to prevent any future
unions, to ensure oversight on disease contamination from outside.
working conditions in such future
circumstances. 4.3 RESILIENCE: PREPARING FOR FUTURE
BLACK SWAN EVENTS
4.2 RECOVERY: RESUMING USUAL BUSINESS, COVID-19 is fundamentally different from
BUT NOT BUSINESS AS USUAL previous crises. While demand for some
The recovery of mining, related business minerals decreases as economic activities
activities, and workers’ interaction will be slow, for the first time, this falling demand
a longer-term process. It will take time for is being matched by significant supply-
the industry to ramp up to full production side disruptions. Policy responses must
and employment capacity, pending a safer go beyond the urgently needed stimulus
health environment for workers domestically and support, aiming to “build back better,”
and the global resumption of demand for ensuring the sector emerges from the crisis
commodities. more resilient and viable.
Besides the uncertainties regarding the pace The current stimulus packages and
and time of the global economic recovery, corporate plans provide needed short-term
one outcome that seems to emerge from support to lower-income and vulnerable
this unprecedented crisis is that while workers but will leave those groups just
business will have to resume, it is unlikely as vulnerable, jobless, and poor when the
that it will be business as usual. New and measures are removed. Policy responses
permanent health and safety protocols will should provide stronger mechanisms to build
have to be put in place. For instance: a resilient workforce.
(i) Mining companies must redesign Given the catastrophic impacts of
workplaces to be more spacious and to COVID-19 on employment, earnings,
limit the risk of disease spread. While and livelihoods in the mining sector, it is
this is easier to do in offices, those imperative to strengthen the resilience of
measures will be more challenging on workers to future such events. Key measures
the ground. Mining companies will have include:
to invest more in protective equipment
and technology and rethink spatial (i) In the short to medium terms, retraining
organization at the mine face, with and upskilling workers forced out of
possible impacts on the cost of labour the mining labour market due to the
and the number of people that can crisis to ensure their transition to
work in a given space. other economic sectors. The corporate
solidarity funds could be kept after
(ii) Governments need to strengthen the the crisis to provide such support
regulatory frameworks and ensure to durably invest in the training of
consistency in their mine safety communities for future employment,
regulations while being more rigorous not only in the mines but also in other
on their application and inspections on economic activities, which can be done
the ground. in partnership with those economic
sectors.
10THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
(ii) Conducting a proper risk analysis of (iii) Rethinking and coordinating local
the mining job market (per occupation) content strategies across sectors, to
to be able to forecast appropriate possibly re-shore or localize some
employment relief support for future types of critical mining procurement
such events and to cater for the future with broader applications (e.g., PPE).
of employment in the mines, as the (iv) Developing strategic regional value
industry adapts to be safer. chains to reduce the exposure risks and
(iii) More generally, developing dependency on just a few emerging
comprehensive skills strategies to markets.
address the vulnerabilities of the labour
market and to ensure adequacy of
competencies with industrial needs.
(iv) Increasing private and public ENDNOTES
investments in R&D and innovation
to equip local businesses with digital 1
In April 2020, the IMF projected that the global
solutions, allowing them to provide economy would contract by 3% in 2020, while the
OECD projected a decline of 5% in global GDP. See
flexible working environments. IMF. (2020). World economic outlook, April 2020: The
(v) Completely rethinking current great lockdown. https://www.imf.org/en/Publications/
WEO/Issues/2020/04/14/weo-april-2020; OECD.
corporate social responsibility policies (2020). Coronavirus: the world economy at risk.
toward impact investment instruments, https://www.oecd.org/economic-outlook/
aimed at creating sustainable 2
Source: ICMM (2016). Role of mining in national
businesses for local communities and economies (3rd ed). https://www.icmm.com/romine/
at reducing dependency on mining jobs. index
3
ICMM, 2016.
Supply chains have been disrupted around 4
Mining Technology. (2020). Mining operations on
the globe and will resume at different scales hold due to Covid-19 drops to 729. https://www.
and times, raising the question of the mining-technology.com/comment/mining-operations-
resilience of mining supply chains and the hold-covid-19-drops/
importance of securing access to critical
5
S&P Market Intelligence. (2020). COVID-19 impacts
to metals prices: Volatility is here to stay - Part 2.
supplies for seamless production. This https://www.spglobal.com/marketintelligence/en/
means: news-insights/research/covid-19-impacts-to-
metals-prices-volatility-is-here-to-stay-part-2
(i) Governments providing targeted
accompanying support measures to
6
The decision was reviewed to allow underground
mines to operate at 50% as from May 1, 2020, subject
strengthen the industrial bases and to having COVID-19 health protocols in place. See
allow local businesses to capture larger South African Government, Department Of Co-
parts of mining procurement markets. Operative Governance And Traditional Affairs. (2020).
Disaster Management Act: Regulations: Alert level
(ii) Designing sustainable financial 4 during Coronavirus COVID-19 lockdown. https://
instruments on favourable terms for www.gov.za/documents/disaster-management-act-
local businesses, such as restructuring regulations-29-apr-2020-0000
funds for enterprise development—not
7
Air Freight prices have skyrocketed as a result of a
drop in global air cargo capacity, which is down by
only to provide urgent short-term 29% compared to the same period in 2019 according
cashflow support, but more importantly to Accenture’s Seabury Global Capacity Report
to support the growth of local and the predominating use of available capacity to
enterprises. transport personal protective equipment (PPE) and
medical supplies. COVID-19 also had a major impact
on global shipping markets, due to a combination
of factors, including in particular a slump in demand
as production in (and exports from) China dropped
significantly. See Accenture. (2020). COVID-19:
11THE IMPACT OF COVID-19 ON EMPLOYMENT IN MINING
Impact on air cargo capacity. https://www.accenture. 18
Exxaro, for instance, has announced funding
com/ro-en/insights/travel/coronavirus-air-cargo- of approximately ZAR 73 million from its fund for
capacity small enterprises and is willing to consider payment
holidays from enterprises with its ESD loans.
8
See International Mining. (2020). Is COVID-19
going to speed up the automation of mining? https:// 19
The company has reduced the number of employees
im-mining.com/2020/03/27/is-covid-19-going-to- in its operations from the existing 7,310 to 4,910 and
speed-up-the-automation-of-mining/ reduced contractor workers from 21,911 to 11,289 due
to the Covid-19 health emergency
9
Technology is not always cost-efficient in some
jurisdictions where labour can be procured at lower 20
For a comprehensive overview of fiscal stimulus
cost. packages, see the IMF COVID-19 Policy Tracker.
10
See the comprehensive EU response to COVID-19: 21
This measure is relevant for about 700,000
https://www.consilium.europa.eu/en/press/press- companies.
releases/2020/04/09/report-on-the-comprehensive- 22
VAT payments are postponed for all companies with
economic-policy-response-to-the-covid-19- sales below UF 350,000, making it possible to pay in
pandemic/ 6 or 12 monthly instalments at a zero real interest rate,
11
In Australia, States and Territories have decision- depending on their size: a measure that provided a
making power to make laws for their respective states. buffer for some 240,000 companies.
For example, the Government of South Australia 23
SMEs received their refund in April 2020. This will
has identified mining and energy sectors as key allow greater liquidity to be delivered to more than
industries for ongoing economic activities of the 500,000 SME companies (sales of up to UF 75,000
State. The sector therefore remains operational, on per year) for USD 770 million.
the understanding that all measures will be taken to
protect workers.
12
See for example South Africa and The Philippines.
13
For a comprehensive overview, see https://www.
icmm.com/en-gb/health-and-safety/covid-19
14
The South African Solidarity Fund for instance,
has obtained pledges from the country’s wealthiest
families and from several mining companies, such
as Anglo Gold Ashanti, Anglo American, South 32,
African Rainbow Minerals, Exxaro.
15
See the ILO COVID-19 tracker, which provides a ©2020 International Institute for Sustainable Development
comprehensive overview of policies implemented by
governments, employers’ and workers’ organizations June 2020
by ILO in 188 countries and territories. Written by Isabelle Ramdoo
16
On April 20, 2020, the President announced the
creation of an "Emergency Family Income." The For more information about the
initiative is expected to reach 1.78 million affected IGF please contact the Secretariat:
vulnerable families with informal incomes.
17
In South Africa, the government has established 220 Laurier Avenue West, Suite 1100
Ottawa, Ontario Canada K1P 5Z9
a COVID-19 Temporary Employer-Employee Relief
Email: Secretariat@IGFMining.org
Scheme, where employers unable to pay salaries due
to financial distress can apply. The scheme covers
part of the salary and applies to workers earning up
to ZAR 17,712 (approximately USD 945) per month, IGFMining.org
guaranteeing at least the minimum wage. Mine
workers are not eligible because mining companies
@IGFMining
do not meet the two necessary conditions, that is,
“financial distress” and workers’ salaries, what are
above the cap set by the scheme. Secretariat hosted by
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