World's largest gold miner names biggest COVID-19 operational challenge
The many instances of maintaining social-distancing is the most significant challenge when running operations during COVID-19, said Newmont's CEO, Tom Palmer, during an interview with Kitco yesterday.
Speaking from his home in Perth, Australia, Palmer said his company is reducing the number of people to just the essential number of workers required to keep the mine and processing plants running.
Palmer said the company, the world's largest gold miner with about 29,000 employees, has to work through the logistics of getting employees to and from their worksites while maintaining safe social distancing.
"It's around separation on buses, separation on airplanes, separation in dining rooms. You have to maintain that six-feet distance," said Palmer.
Newmont has pared back personnel at its operations to whoever is essential. Newmont now has 5,000 employees offsite, and Palmer said his company is sourcing technology to support staff working remotely.
Newmont has five operations that moved into care and maintenance during March and April after governments around the world passed COVID-19 restrictions. Some restrictions have lifted, such as Newmont's Cerro Negro in Argentina.
"Our big, world-class assets are still performing well," said Palmer.
Still, Palmer estimates the company is currently running at 75% production capacity. Newmont's Peñasquito in Mexico remains shut. Palmer said he has enlisted the support of various stakeholders, including the U.S. government, to find protocols that will allow the mine to open.
"We're taking a very conservative approach, ensuring we've got the health and safety of our workforce, along with local communities, front and center. We are ensuring that we're going through the appropriate engagement with all of the key stakeholders before we bring these operations up," said Palmer.
Palmer lauded the Australian government for its speed in handling the COVID-19 crisis.
"The mining industry worked very well early-on in the process to develop a set of protocols to allow mines to continue operating in Australia," said Palmer.
Regarding the industry's overall gold production and how that might impact the supply picture, Palmer expects just some short-term choppiness and disruptions. The bigger driver will be uncertainty.
"Gold was sitting at the $1,400-$1,500 price range before the pandemic came along, and now we're seeing global economic uncertainty plus the level of fiscal and monetary stimulus taking place. It's really pushing gold firmly into the $1,700 range, if not higher," said Palmer.
Regarding starting mines again, Palmer said his company applied lessons from past mines that were suddenly thrown into care and maintenance. There are a number of protocols to follow, such as turning over the engines on the haul trucks occasionally, to make mine site ready to commence operations.
He said getting a mine up and running again "should be a matter of weeks."