Rio Tinto’s Tomago aluminium smelter in Australia has developed a wide range of contingency plans to address persistent shortages occasioned by the ongoing global coronavirus pandemic.
“Anything that comes by a container is being delayed,” CEO Matt Howell lamented in a wide-ranging interview with domestic financial media this week. He said the shortages, which included protective equipment, chemicals, and specialty raw materials, are likely to continue for quite some time.
“We’ve got an amazing procurement team that has really looked forward for months, to like, if this particular supply line no longer works, where do we get it? What’s our plan A, what’s our plan B, what’s our plan C? So we haven’t run out of anything. That’s purely as a result of the fantastic work that our procurement team is doing to be proactive rather than reactive.”
In addition to shipping shortages, the Tomago aluminium smelter has been forced to battle labor shortages as well, as the new omicron variant of COVID-19 has taken a serious toll on the site’s work force.
Howell expects that labor outages for illness will continue through the summer, exacerbating a repeat of power outages experienced in past summers. In an effort at combating the labor shortages, Tomago has brought back previously laid-off employees and current employees on vacation.
“We’ve got dozens of new staffers as a precautionary effort to guard against people not being available, and we’re running rapid antigen tests morning and night,” Howell explained.
“It is disruptive … we’re really tight for labour,” he noted, saying that at the facility, up to 50 people are absent from the 350-400 laborers at any one time.
“We’re managing to keep the place running, but it’s only on the back of the continuous screening program, so this occurs every morning for four hours, every afternoon for four hours. It’s pretty expensive.”
Howell said that the plant was happy to pay for rapid antigen testing at the aluminium smelter from its own coffers rather than taking advantage of government-subsidized testing materials.
“Compared to the annual cost of our safety program it’s a rounding error, so we don’t begrudge the fact that we’ve got to buy those tests, and we’d rather have them administered by a nurse than have employees do it themselves because it is possible to, quite frankly, to get it wrong if you don’t sample properly.”
Although he is hopeful that the worst is behind them, Howell remains concerned that supply-chain challenges will remain for the foreseeable future.
“What’s happening in Europe, particularly the reported omicron infections, that just appears to be escalating on a daily basis, and we know that will have impacts on manufacturers that we depend on.”
“We know and understand this is going to go on for some period of time. We just have to again be thinking out months in advance and have contingency plans available should critical supply lines just dry up,” Howell concluded.