New York — Global mining company BHP said Thursday it is ramping up safety for its workers to keep its facilities going as mining companies around the world halt operations in the battle against the coronavirus pandemic.
The pandemic has battered global markets on fears it is pushing the global economy into recession.
In a statement to the market BHP said operations continues with additional monitoring and procedures in place to reduce the risk of coronavirus transmission among its workforce.
For now there has been no material impact on BHP's operations or supply chain "with our workforce able to access our mines and platforms safely and operate effectively."
S&P Global Ratings said earlier this week that a global recession is highly likely in 2020 because of the pandemic.
"As the coronavirus pandemic escalates and growth heads sharply lower against a backdrop of volatile markets and growing credit stress, we now forecast a global recession this year, with 2020 GDP rising just 1.0%-1.5%. The risks remain firmly on the downside," the analysts said.
BHP CEO Mike Henry said: "Keeping our operations running is critical for jobs, our communities and for the economy. We are not a business that can do all of our work remotely and we are fully focused on action to reduce the risk of transmission at our sites and in our offices. We know the situation is difficult and we are encouraging our workforce to look out for each other, their families and communities as we manage through this together."
Many governments are urging social distancing to slow the spread, or flatten the curve as it is widely being called, including measures such as work from home where possible.
The statement said that although BHP is largely seeing no disruption to supply chains, it is seeing some pockets of disruptions to items such as disinfectant.
"While markets have been volatile, our products are still in demand, and with the exception of oil, which has come off quite sharply and more recently, copper, commodity prices have held up well. Encouragingly, there is increased activity in China as regions are ramping up production with strong government support," the statement said.
Oil has been hammered lower by not only by coronavirus, but also by a price war between some of the producer states. This has seen the price crash out to almost $20/b.
Bellwether metal copper had been holding up until Wednesday when it saw its biggest one day fall since the great financial crash of 2008-09.
As of 0820 GMT the London Metal Exchange copper price was spot bid on the exchange's electronic platform LMEselect roughly $71 lighter at $4,655/mt. The trading range so far saw a high of $4,785/mt and a low of $4,371/mt.
"This volatility is brutal," a trader said, "but it's here to stay. Who knows how low the markets can go?"
Some of the measures BHP has implemented include:
"The challenges presented by COVID-19 are fluid, and change on an almost daily basis. There can be no guarantees about what further measures might be implemented by world governments or the directions that world markets might take," the company added.
Business continuity plans are being tested at sites and offices and employees are prepared to manage through a range of scenarios where corona virus limits workforce capacity or access to infrastructure or temporarily limits or suspends production, it added.
BHP is also implementing measures to support small business partners and regional communities through accelerated payment of outstanding invoices and the reduction of payment terms from 30 days to seven days.
"While uncertainty remains high, our operations are running well and our financial position is strong with net debt of $12.8 billion at the lower end of our target range, and cash and cash equivalents of $14.3 billion as at December 31, 2019," it added.
