Preparing for the known unknown after COVID-19
Aviate. Navigate. Communicate.
If businesses charting a course through the COVID-19 crisis where pilots coping with a mid-air emergency, their training would tell them to follow these three key steps.
And while many chief executives are doing something similar as they protect their people and their business, communicating key decisions along the way, there could be a fourth step: change course to an unknown airport.
For Amanda Lacaze, rare earth miner Lynas Corporation’s chief executive and managing director, the one certainty emerging from the COVID-19 crisis is uncertainty.
“I don’t think any of us know what is going to happen in any of the areas of the economy coming out,” Ms Lacaze said in a Committee for the Economic Development of Australia livestreamed panel event, which examined how the resources industry was managing the COVID-19 crisis.
“I might be a multi-billionaire if I knew, but I don’t. But what I do know is that it will not be what I expect, so therefore I need to create muscle in the organisation and operating platform which gives us room to be able to respond to changes in market conditions.”
Ms Lacaze was joined in the panel discussion by Chamber of Minerals and Energy WA Policy and Advocacy Director Robert Carruthers and Neometals Chief Executive and Managing Director Christopher Reed.
Ms Lacaze said that at the corporate level she had led four turnarounds.
“In the early stages it has the same hallmarks as the challenges from the pandemic,” she said.
“It’s essential to make decisions each day; it’s essential to keep a focus on the future and form a clear view on when you should shift from crisis management to a more normal management mode.
“Crisis can be very seductive. When every decision seems critical and life is moving at a fast pace it is only human to feel special and really important.
“The Australian resources sector is uniquely prepared to implement relevant measures. Health and safety are already top priorities in our industry.
“Ensuring that in all instances we have two-way communication is an important way of making sure our workforce remains engaged with the business during this time.
“Of course, there will be some changes and we will think why didn’t we do that before and so those changes will remain after the crisis passes.”
For Mr Carruthers, it felt like “we are getting to the end of the beginning in terms of that urgent rapid response and we’re in the new abnormal”.
“It’s a question of how long we remain in this situation,” he said. “It’s important to continue to focus on health and safety and business continuity across the board and having an eye to the future; looking over the horizon and making sure we can seize the opportunities that will come on the other side of this for a rapid recovery and it’s the resource sector that will be in the forefront of that.”
Mr Reed said government and State agencies could assist the sector by recognising and taking account of how restrictions were affecting exploration activities.
“If we look at the exploration industry, and Australia has a very large exploration industry, we need to preserve the exploration companies to preserve those jobs,” Mr Reed said.
“We can certainly take a couple of months to collate all that we have done in the past 12 months to prepare exploration programs and get ready to execute those when we are able; when the travel bans are lifted.”
The State Government could assist by allowing exploration exemptions for COVID-19, recognising that explorers cannot conduct activities to satisfy minimum expenditure requirements.
“To preserve the exploration companies’ balance sheets, they may need to have to look at suspending the rentals on the mining tenements for a period of time,” Mr Reed said.
“That then hopefully would lead to a discussion with local councils to suspend their rates on the mining properties.
“We could look at the Mining Rehabilitation Fund contributions, given that not a lot of activity is happening.
“Keep the approvals processes going for exploration programs and have everything ready for when we can executive our plans.
“Nothing stimulates economies in rural areas like drill rigs turning.”
Separate to the CEDA discussion, and with a deep understanding of the importance of keeping drill rigs turning, is leading global mining-tech company IMDEX.
With 20 offices internationally, sales in 102 countries and a presence on 70 per cent of mineral drilling projects globally, IMDEX and its clients are dealing with government restrictions in multiple jurisdictions.
Restrictions in some countries are easing, allowing mining and related activities to resume.
Chief Operating Officer Paul House said five key elements meant IMDEX was well prepared to protect its people and its business in the early stages of the crisis.
“We have been undergoing a digital transformation for the past two to three years, which has made the transition to working from home relatively seamless,” Mr House said.
“A key component of our value proposition is technologies that enable clients to work remotely, efficiently, securely, and safely.”
The company’s supply chain and ability to service its clients were not affected.
“Since the escalation of the trade war between USA and China, we worked hard to streamline our supply chain and ensure we had multiple contingencies in place,” Mr House said. “We also ensure we remain competitive in all market conditions.
“Our strong and cohesive leadership team is experienced in responding to such industry changes, whether it is cyclical, financial or pandemic, across all our regions of operation and we maintain frequent contact with clients and their changing needs.”
IMDEX is moving from responding to the pandemic to ensuring systems and training are in place to keep it ahead of competitors.
The focus is on delivering and expanding online customer service and training, and highlighting cloud-based products that enable clients to work from home and still receive critical data in real time.
“We are finding new ways of working that will benefit our company and our clients for the long-term and will remain in place after the pandemic eases,” Mr House said.
“IMDEX invests heavily in research and development. We have always worked with industry to solve problems and this period is no different. It just means that we have to think creatively — and we have some of the best in the business doing that.”
Mr Carruthers said he did not want to see the crisis “wasted”.
“See where our strengths have come from when we have had our backs against the wall,” he said. “We have responded incredibly well as individual organisations.
“As an industry we are working alongside government. That is the critical point. That we just don’t go back to our normal, competitive instincts, that we do maintain that level of collegiality; that we do look at the lessons learned.
“It’s in everyone’s best interest that the resources sector comes out strongly on the other side of this.”