COVID-19 could change miners, says industry chief

The COVID-19 virus outbreak has had a significant impact on mining in the Americas with some jurisdictions shutting the sector down as part of preventative quarantine and isolation measures, while others have deemed it an essential service. Travel restrictions and interruptions to supply chains present dynamic challenges for miners and the solutions they are turning to to deal with the situation could change the industry forever, according to a veteran industry leader.
COVID-19 could change miners, says industry chief COVID-19 could change miners, says industry chief COVID-19 could change miners, says industry chief COVID-19 could change miners, says industry chief COVID-19 could change miners, says industry chief

SSR Mining's Seabee gold operation in northern Saskatchewan, Canada

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Decision-making processes will perhaps see the greatest change as a traditionally ponderous sector has been forced to cope with a dynamic situation and make critical decisions with major health, safety and economic ramifications with partial and incomplete information.

"We have had to make decisions with very limited information, and you cannot hesitate. The US [and UK] hesitated for a few weeks [before implementing virus propagation measures] and that could mean thousands of lives," Kevin O'Kane, senior vice president and chief operating officer at SSR Mining, told Mining Magazine

O'Kane joined SSR in 2018 from BHP Minerals Americas where he was asset president at Pampa Norte. He spent much of his plus-30-year career with BHP, leading safety and productivity improvement, cost reduction, organisational and cultural change processes, including at the world's biggest copper mine, Escondida in Chile.

"Leadership needs to be able to react more quickly to issues that occur," O'Kane said.

"People that can adapt effectively to these changes are who need to be leading the company. This will mean bringing in management from other industries with more experience dealing in more dynamic environments."

O'Kane hopes the virus response of the mining sector will act as a catalyst for greater collaboration in the future.

"This is an incredible opportunity to have larger groups of people across industries and countries collaborate in a way that didn't exist before," he said.

"All the large mining companies probably have similar [institutional] shareholders, therefore for those shareholders, collaborating more effectively between companies to get economies of scale would be an advantage. The more effectively we collaborate the more productive and safer we are and the faster we can make decisions because there is more trust. Tailings storage facility (TSF) failures have impacted all miners in terms of disclosure but also in the redesign and rehabilitation of hundreds of TSFs at enormous cost. The only way of getting people comfortable with mining is for us all to do a better job together.

"Our competition is not necessarily other mining companies but other industries. In the fight for capital, how do we differentiate ourselves?"

With miners ever ready to tout the benefits they bring to their host communities, they have a real opportunity to show their mettle and that this is much more than lip service to obtain a social licence to operate, particularly in emerging markets. "Emerging markets are going to be [economically] decimated and the number of people going below the poverty line is getting bigger," O'Kane said.

Mining Journal has seen miners across Latin America step up to the plate to volunteer assistance to local communities from food packages and potable water deliveries to medical supplies and donations of masks and incubators.

The current crisis has brought home the wide-ranging impacts the utilisation of digital communication technology can have, which will endure. "The mining industry has been slow to adapt to new ways of working but the need to create a different type of interaction means we need to adopt technology," O'Kane said. "Necessity is pushing us to do things we have been contemplating for a while. We had already been implementing new processes so executives travel less, and this has accelerated. Using social networking tools like Microsoft Teams is a much more effective way of having meetings, sharing and working on documents together. The quality of the tools today is so far superior than even a few years ago so our travel will be reduced as a result."

Across the Americas, the majority of white-collar head office staff are working from home, providing a tangible pause for thought about the way companies are operated. Long before COVID-19, when Mark Bristow became CEO of Barrick Gold following its merger with Randgold Resources in 2018, one of his first moves was to devolve management to the operations and slash the head office headcount.

COVID-19 will usher along the redefinition of what a head office is and potentially result in the downsizing of HQ real estate and costs for some, while also giving them access to a more diverse talent pool.

"We talked in the past about having people work from home and there was anxiousness about performance and productivity. Now we are having to do it and we see the same output with less stress and people with more time available as they don't have the commute. Connecting people with a common agenda is also enabling us to see a level of leadership and who true leaders are," O'Kane said.

Such new working patterns will likely help with the mining sector's efforts to diversify its workforce. "People are more relaxed, happier, which can help with recruitment and retention. The younger generation and the diversity of people mining is trying to attract don't want to work at site; they want to live in cities. We have already recognised that we need to operate differently as an industry and the pandemic should accelerate that," he said.

COVID-19 will see many companies redesigning processes and jobs, accelerating moves towards automation and remote working already under consideration. In the near-term, scenario planning to determine under what conditions work can resume is testing management.

"It is difficult to pick a date, so we just call it day one. What are the conditions we need to see on day one at our site which will permit us to be safe to start up again? There are certain things we can't do if we can't move people," O'Kane said.

"In Nevada, Saskatchewan and Argentina there is recognition that moving people across borders creates issues. A 14-day isolation period is not enough for us to know if someone is infected and infecting their work colleagues. We need to reduce risk and exposure and therefore we need to know where people have been when they have been away. This leads to planning questions such as should we have people from out of province or smaller communities or people over a certain age on site? When put these constraints on you can see which staff you are missing and in which roles. This will dictate how you can start back up again or not."

The health implications of COVID-19 are unlikely to have a sudden end and could take months if not years for the virus to fully run its course, which means travel restrictions could remain in place in some areas for considerable time. This adds to the case for hiring locally as well as giving companies a greater appreciation of which are critical roles.

"We have seen communities reluctant to have people go to our sites and then return home because the communities don't have the capacity to respond if workers are infected with COVID-19," O'Kane said.

"The difficulty moving people around due to travel restrictions could continue for the next couple of years and will put more of a focus on local hires. You may need to accept a lower skill level locally, which means you need to make more investment in your people and look for different ways to access the so-called higher quality person that doesn't come to site.

"When shift schedules were designed, no attention was paid to the potential for cross-contamination of people. If you have roles that are unique or critical, you have to keep people apart so you can maintain operations if someone becomes infected. I can see shifts getting longer and with no overlap for hand over. This was recognised before and now out of necessity we need to change," he said.

 

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