The role of mining in the economic development of many countries can not be ignored. When we look through history, it can clearly be seen that the most powerful economies and the highest level of welfare belong to the countries which have the most powerful mining activities. It is not only because of the efficient usage of natural resources in countries but also because it helps create social growth policies in developing countries.
Change of price of gold since Covid-19 pandemic
Without mining activities, we can’t think about the automotive industry, construction industry, or technological devices that we use to ease our daily life. Because mining is the base of these sectors, it provides raw material to those sectors.
While mining has a vital role in the economy, it’s not easy to process. Stages of mining (extracting ore and mineral processing) require really hard work and manpower. Even though necessary precautions are taken in the plants, when we consider the current situation that the whole world is facing right now, we can see that more precautions should be taken.
A lot of mineworkers’ accommodation is usually inside the plant, and it’s provided by the mine companies. Because of environmental issues, mining institutions must be far away from the city, which makes the plant some kind of a village to workers that they have to live. That leads to an increase in time workers spent together.
When authorities analyze all the circumstances in the sector, they have decided to shut down the mass production, which leads to supply chain disruptions. The ones that haven’t been shutdown decrease the working hours and employment. Huge losses are expected in different income groups in future days.
These temporary or permanent pauses have different kinds of impacts on demands and prices. While demand for copper, nickel, and platinum decreased, prices have dropped in direct proportion to decrease of demand; precious metals like gold and silver increased their demand and price right from the start of the Covid-19 pandemic.
“The International Monetary Fund (IMF) believes that the virus will reduce global growth by 0.1% in 2020. China’s growth could fall to 5.6%, which is 0.4% lower than the organization’s January outlook. Meanwhile, Moody’s Analytics believes that the outbreak could reduce U.S. growth during the first three months of 2020 by six-tenths of a point to 1.3%.”
It’s obvious that a difficult period is ahead of the mining industry and correlatively to the other industries as Covid-19’s economic impact shaping up to be significant. Because not only workers and businesses are affected so the governments. With the rise of the price of gold and precious metals, the new economic model of the World will be specified.