By David Duval
The Covid-19 pandemic is still impacting the global economy and the virus’s impact will likely be felt for years to come. In addition, the prospects of finding an effective vaccine in the near term appear to be slim to none.
Estimates for the availability of a vaccine range from a year at the earliest to several years and perhaps never. Given the economic consequences to date, all this uncertainty is hardly a confidence-building scenario for Canadian business including the minerals sector.
The SARS pandemic in 2003 – which was nowhere as widespread and deadly as Covid-19 – was the opening salvo in an ongoing pandemic threat that will continue to be a major public health concern. There is still no SARS vaccine which no doubt largely relates to the fact that SARS failed to come back the following year.
However, Brett Finlay, a professor at UBC’s Michael Smith Laboratories, suspects that Covid-19 is “probably going to be here for the long term.” In the past, it has taken 10-15 years to get a vaccine approved, he notes, given the stringent regulatory climate imposed on medical research and human testing. “Making vaccines is a $200 million to billion-dollar investment to get it out to the public,” he adds.
So, what does this mean to critical economic drivers such as oil & gas, mining, forestry, agriculture and other industries whose products are not only job creators but are major sources of dollar-supportive foreign exchange?
Companies have been forced to adapt to the new reality and in many cases stringent regulations have been imposed on them by governments within Canada and abroad. Indeed, there’s hardly a mining company around that hasn’t faced production losses and the financial impact has been arguably worse for junior explorers who typically raise money through private placements but are still struggling to meet financially onerous listing and compliance issues with regulators.
Major companies such as Barrick Gold, which jointly operates the Veladero gold mine in Argentina, has stepped up to the plate and purchased hundreds of thousands of test kits to help combat and contain the spread of the virus in Argentina and within communities adjacent to its mines. While there is some question concerning the reliability of finger-prick antibody testing kits to screen workers, Barrick feels the testing is adequate for screening purposes.
Barrick is one of only a few mining companies that has experienced a pandemic. The company has been through two Ebola pandemics and already had protocols in place to deal with them. Of particular concern for the company was its relationship with Indigenous employees and the communities they live in.
Barrick CEO Mark Bristow noted in a recent Financial Post article that “In both Canada and Nevada we have worked with our first-nation communities to lock them down because that was a big social risk,” he said. “Their view is they always get really damaged in pandemics like this. So we put in place support structures . . . gave them support on food and medicine and everything else.” Because of operational shutdowns, Barrick reported the lowest quarterly production since the third quarter of 2018 and is hardly alone.
Kinross Gold has adopted Covid-19 protocols including a ban on all non-essential business travel, individual site management controls and screening to limit access to mine sites, isolation plans and on-site isolation facilities, emergency medical preparedness, supply chain contingency plans and alternative work arrangements for employees.
Across the company, a number of precautionary steps have been taken to promote awareness of the importance of hygienic practices, such as frequent and proper handwashing. In addition, the company is following the protective measures outlined by the World Health Organization.
Strict practices and protocols have been adopted at mine sites to help prevent exposure to COVID-19 and include: implementing physical distancing measures at all sites; enhanced screening process at entry point; limiting face-to-face interactions to the extent possible; and postponing non-essential deliveries and visits by external personnel.
These protocols are adaptable to just about any segment of the economy including the exploration sector which generally operates in more remote areas but often involves a conglomeration of personnel camped in a relatively confined area.
In addition, field personnel can have interactions with small isolated communities, many of them Indigenous, who are especially vulnerable to Covid-19 given the limitations of health care services in remote areas.
In a business segment that’s been struggling for years, Covid-19 is but another challenge for mineral explorers and their employees. Most have been unable to visit their offices, field work and business travel have been reduced or eliminated and face-to-face meetings avoided. In many parts of Canada exploration is seasonal and the window of opportunity to prepare and implement exploration programs has passed, leaving companies with another year of overhead and no results to attract financing. With the federal government bailing out most of the country, you’d think there would be some crumbs left over for our exploration sector.