Challenging economic conditions have led to difficulties in the South American mining industry. Throughout the continent, border closures and transportation disruptions have made a major impact on productivity. Mining jobs are crucial to the South American economy, together with the export of mined materials. Copper and iron ore are two important exports, and their major export recipient is China.
Hector Sosa Flores, a mining industry expert, explains the ways in which current economic and social problems are being dealt with today.
Land border closures due to the COVID-19 pandemic have had the effect of restricting the flow of goods and personnel for business purposes. When commerce cannot flow freely, it causes serious problems for the workers, suppliers, and customers of the mining industry. These countries have experienced major problems due to the pandemic and have restricted their commercial activity as a result.
Chile closed its borders to non-resident foreigners starting in March. Non-residents from foreign countries were asked to return to their countries of origin. With an increasing caseload and a desire to block travelers from highly affected areas like Brazil and the United States, Chilean officials made the difficult decision to close the borders. The closure applies to land and air travel alike. Chile has also imposed a 14-day quarantine on returning citizens from all other countries regardless of their COVID status.
Despite these closures and the severe impact that COVID-19 has had on the country, the majority of Chilean mines remain operational. In April 2020, the mines of Chile produced more copper than they did in April 2019. This year-over-year increase points to the continuing demand for copper among world industries.
Brazil has closed its land and air borders to non-commercial traffic, but commercial trucking operations are still able to continue. The impact of the pandemic in Brazil has meant that lockdown procedures are necessary for public health. Brazilian citizens and foreign nationals are restricted from entering other countries.
Brazilian mines were closed for an extended period of time due to the pandemic, but as they have reopened, they have been quite productive. Increased demand in China for iron ore is driven by the steel industry. China’s steel production is up by more than 5 percent between June 2019 and June 2020. Brazil is one of China’s top suppliers of iron ore.
Ecuador put one of the severest border closures in South America into effect in March 2020. During this closure, not even citizens were allowed to cross the border. Despite this issue and the immense humanitarian impact on the Ecuadorian people, the mines reopened in May 2020. Mining affects 33,000 jobs with another 100,000 connected to the industry.
Commodity freighters have continued to operate during the pandemic, bringing vital supplies of raw materials to industries around the world.
While land borders in some countries largely remain open to commercial traffic, it is more difficult for mining companies to find truck drivers who are willing to work today. These truck drivers may be worried that they could contract the virus and pass it on to their families if they visit other countries.
Across the continent, foreign miners have been forced to leave their worksites. This has led to a precipitous drop in mining output. Mining is a highly skilled and often dangerous job, meaning that it is difficult to hire new workers when the previous employees are unavailable.
Transportation issues are also a serious problem in the mining industry. Rail and highway links have been broken. Driving trucks through the mountainous areas of South America has always been challenging, but with the border closures, it has become next to impossible in many areas.
Some countries are beginning to reopen their borders, although there has not yet been a significant improvement in disease conditions in the Americas. Commerce needs to move forward, and exports and imports need to resume.
Mining companies should always follow national and local regulations when reopening their mines. As time passes, the restrictions will begin to ease. Countries need to be encouraged to reopen their land borders when it is safe for everyone concerned.
Hector Sosa Flores understands the difficulties faced by the South American mining industry during the current upheaval. The gradual reopening of land borders across South America will make it much easier for commerce to flow across international borders. This will help to put the mining workforce back into action and provide important raw materials to foreign and domestic businesses. It is hoped that the virus will begin to subside and that further closures will not be necessary in this vital industry.