UBS with the note:
Supply risk rise as Omicron seeds in Western Australian resources sector
In contrast to most other jurisdictions, WA’s pandemic response to date has been akin to an eradication strategy; the State has had very low COVID occurrence. Local media have reported an Omicron breakout at the Kemerton lithium hydroxide refinery near Bunbury in Western Australia, with 13 of 17 cases in the Bunbury cluster on site (link). Positive cases and close contacts are isolating and work at the affected section at Kemerton has been halted. WA has mandatory vaccination requirements for most mining workers and 14 day isolation periods for positive cases and close contacts. If Omicron spreads further, current isolation requirements could cause disruption for miners and their suppliers, similar to what BHP and S32 experienced in QLD/NSW in Dec-Q 21 (link to BHP and S32 note). WA is the world’s largest supplier of iron ore and lithium (spodumene concentrate), but is also an important supplier of nickel, gold, alumina and LNG.
