Implications of COVID-19 on the Global Mining Sector_ Crimson Publishers

 Implications of COVID-19 on the Global Mining Sector by Vlado Vivoda* in Aspects in Mining & Mineral Science_ Aspects in Mining & Mineral Science

 

Abstract
A cyclical industry is sensitive to the business cycle. Revenues are generally higher in periods of economic growth and are lower in periods of economic downturn. Mineral price cycles mean that mining companies’ expenditure on exploration and investment can vary considerably. Price fluctuations also have a significant effect on fiscal revenues, exchange rates and employment levels of countries rich in metals and minerals. The reasons for price cycles lie in the high volatility of demand for metal and mineral commodities and inflexible supply responsiveness. Demand for metals and mineral commodities is highly sensitive to changes in the rate of economic growth, partly because of the characteristics of the economic sectors in which these commodities are used. These economic sectors, which include construction and the production of capital goods and consumer durables, require large long-term investments, and tend to be more volatile than general economic activity. Demand for metals and mineral commodities is also sensitive to manufacturers’ stockholding. As economies grow, manufacturers tend to build up stocks in anticipation of increased production, adding to the demand for metals and minerals. When economies retract, manufacturers often reduce their stocks, thus suppressing demand for metal and mineral commodities

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