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As COVID-19 cases rise in Latin America, miners continue to ramp-up production

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As COVID-19 cases rise in Latin America, miners continue to ramp-up production

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Testing for COVID-19 is a key protocol at mines as they look to curb potential outbreaks.
Source: Pixabay

While cases of COVID-19 surge in parts of Latin America, the mining sector continues to ramp-up previously suspended operations, with analysts raising the possibility of fresh supply shocks should viral outbreaks force miners or governments to take more action.

Latin America accounts for almost half of new coronavirus-related deaths, according to the Financial Times, with Brazil emerging as a major epicenter. Analysts have noted that the surge in Latin America comes as other major economies that consume copper, China most notably, reopen.

In Chile, a union has warned that the situation is alarming, while in Peru, workers have pushed for more stringent health protocols. Still, it remains uncertain whether rising cases of COVID-19 will lead to new rounds of production cuts in Latin America, but analysts consider it a possibility.

"There is definitely a risk over and above the disruptions we have had already," BMO Capital Markets analyst Colin Hamilton told S&P Global Market Intelligence.

Mines in Mexico and Peru, where COVID-19 measures initially closed down operations, continue to ramp up, according to reports and government officials. Mines in Chile and Brazil, respectively major copper- and iron ore-producing countries, have largely sustained output amid the pandemic.

In Mexico, mining was declared an essential service in mid-May after the government largely suspended operations in late March. So far, mines under new COVID-19 protocols have not had any outbreaks of the virus, said Francisco Quiroga, Mexico's undersecretary of mines with the country's Ministry of Economy.

"What I have found is, first, proper measures are being taken ... not only inside mining units, but also outside," Quiroga said, adding that he has inspected mining operations in the past 15 days.

In Peru, where mine production was heavily curtailed in recent months due to the coronavirus, operations are ramping back up under stringent protocols, according to reports. Pablo de la Flor, executive director of the National Society of Mining, Petroleum and Energy, said that by the end of June, output should reach 80% of pre-quarantine levels, according to Reuters.

In March and April, Peru's copper concentrate production respectively fell 26.7% and 33.4% year over year, HSBC Global Research analysts said in a June 4 research note, adding that copper concentrate output in the country declined 17.4% year over year to 640,000 tonnes during the first four months of the year.

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While protocols at mines vary from country to country, curbing unnecessary traffic to operations and testing are among key measures miners have deployed. Quiroga said at-risk workers, such as those with diabetes, or workers with at-risk family members have been asked to stay at home, along with anyone showing COVID-19 symptoms. Workers are tested before they go to site.

"It is a very cautious approach, but it is also progressive," Quiroga said.

Quiroga said that overall, six workers had tested positive for COVID-19 before they entered some mine sites but it was difficult to pin down how many workers may have been affected by the virus as they are asked to stay home in the first place if they show symptoms.

"If you ask me, 'How many cases do you have confirmed?' Well, the answer will be an understatement because there are many people that obviously have the symptoms, but either they don't present themselves at the mine ... or if they do, and have some of the symptoms, they're asked to go back and be in confinement," Quiroga said.