Mining Companies Must Rethink Their Operating Models in Response to COVID
The global pandemic has disrupted mining operations around the world. The Latin America region has been the most impacted — Peru, Chile, and Mexico are the top three countries with the highest revenue at risk. The rising number of COVID-19 cases in these countries is also contributing to export challenges and supply chain shortages. Since there is no way to know how long the disruptions will continue, or what new challenges may come our way, it’s vital for mining companies to rethink their operating models in response to COVID, to ensure they have the tools, agility, and technology to both persist and profit.
Recently, research giant McKinsey advised mining companies to rethink their responses to the pandemic, and outlined a “5R” approach: Resolve, Resilience, Return, Reimagine, and Reform. Similarly, in Understanding COVID-19’s impact on the mining & metals sector, Deloitte speaks about three dimensions of managing the crisis: Respond, Recover, and Thrive. Extrapolating from these insights, we offer up our own take on how mining companies can survive and thrive in the new global economy.
Meeting the immediate challenges head on
Most mining companies acted early and decisively to address the immediate challenges stemming from the coronavirus pandemic. Many sites were closed, social distancing and other personal protection measures were put into place, and employees were asked to work from home when feasible. Since many of these measures will likely need to continue for months or more, it’s time for mining companies to incorporate them as standard operating procedure.
- Embrace remote work: Companies in every conceivable industry are rethinking the workplace. Technology that supports remote work will remain critical. Allowing a portion of the workforce to continue working from home can be both a safety measure and cost-saving strategy for now and the foreseeable future. Mobile access to critical business applications is essential in this scenario.
- Hone maintenance strategies: As operations slowed or stopped, many mining companies adjusted their maintenance strategies to prioritize critical production equipment. The ability to stay on top of maintenance schedules is vital to ensure that money is spent wisely on the equipment that needs it, when it needs it.
- Prioritize communication: Clear, timely communication is a must during the best of times, but when face-to-face meetings are not possible, it’s imperative. Mining companies must prioritize communication and customer experience across the whole value chain, sharing financial, operational, and performance data in timely, secure ways with those who need the information.
Form a resilient strategic response
As mining companies begin to return to limited operations, many are looking to make some strategic changes to enable them to respond optimally given the continued uncertainty.
- Maintain financial visibility: When times are uncertain, cash is king. Mining companies must gain and maintain a clear understanding of their cash position and prepare rolling forecasts to allow them to continually plan over the coming months and years. Real-time visibility into finances has never been more critical.
- Strategic project management: Mining companies throughout the world are reassessing their open and planned projects. Some projects may be fast tracked, others resequenced, and others placed on hold or canceled entirely. Effective project management tools are a definite asset in this task, providing detailed costing and status data that fuels better decision making.
A catalyst to move forward
The pandemic has companies rethinking their digital strategies, and is actually accelerating companies’ digital transformations, driving them to be fast and fluid. Mining companies will benefit by using the crisis as a catalyst to rethink how and where work is done.
- Invest in technology: The majority of mining companies plan to accelerate their spending on technology in response to the pandemic. From incorporating autonomous drones to the automation of repetitive tasks, technology is key to succeeding during uncertain times.
- Cloud-based business functions: Cloud-based business solutions are uniquely capable of providing the agility — the fast and fluid capabilities — needed to allow mining companies to adapt and succeed in the new normal.
- Global capabilities: While Latin American has been hard hit by the virus, indications are that the mining sector here is well positioned to recover. Mining companies with global operations can use this time to pivot to address local challenges — localizing their supply chains, optimizing their procurement processes, and improving multi-site visibility for example.
Respond, recover, and thrive
The pandemic has placed many long-held assumptions into chaos. Workers cannot be productive unless they’re in the office. Medical care must be delivered in a doctor’s office. These kinds of quaint presumptions and legacy approaches have been turned on end. Similarly, mining operations must rethink their ways of doing business, envision new efficiencies, and embrace technology as a path forward.
Caron Mining Solutions is a comprehensive, powerful, and easy-to-use mining industry ERP solution, built on Sage ERP software, that addresses the challenges modern mining operations face. Learn more about Caron Mining Solutions here, or by contacting us here.