The market kicked off the week on a positive note but one sector didn't get invited to the party!
The S&P/ASX 200 Index (Index:^AXJO) (ASX:XJO) jumped 1.4% in late morning trade as sentiment got a boost by the federal government's latest attempt to keep people in jobs and prevent them from being crushed by debt.
This is one reason why many consumer discretionary stocks are outperforming despite mass store closures with the Wesfarmers Ltd (ASX: WES) share price jumping 2.1% to $32.92 and the Myer Holdings Ltd (ASX: MYR) share price surging 11.4% to $0.12.
Mining stocks under pressure
But one sector that's been left behind is mining even though the group is seen to be far better placed to weather a coronavirus downturn.
The BHP Group Ltd (ASX: BHP) share price slumped 3.2% to $28.11 and the Rio Tinto Limited (ASX: RIO) share price reversed 1.4% to $84.55 at the time of writing.
The weakness coincides with news that the Western Australian government will bar fly-in, fly-out (FIFO) workers.
Ban on FIFO workers
The ban will reportedly be implemented within days, according to the Australian Financial Review. The move is a further effort by the state government to control the outbreak of the COVID-19 pandemic.
The ban will bring the state's FIFO policy inline with its 14-day quarantine rule for all travellers. The transient workforce had been exempted from the rule in the past.
BHP, Rio Tinto and Fortescue Metals Group Limited (ASX: FMG) have large iron ore mining operations in WA and BHP is working on mitigating the impact of the new restrictions.
Overcoming the new restriction
The Big Australian relocated 300 of its workers from the eastern states in the past month to help ease what is anticipated to be a skills shortage.
BHP, as well as its peers, have extended rosters and ensuring better protection for their workers to help lower the risk of spreading the virus.
Many consider the WA's ban on FIFO inevitable. Most states have a policy requiring interstate travellers to self-isolate for 14 days and that makes the work arrangement unworkable.
A number of gold miners are also reported to be caught up in looming FIFO rule change. These include Saracen Mineral Holdings Limited (ASX: SAR) and Northern Star Resources Ltd (ASX: NST).
Foolish takeaway
It feels strange talking about skills shortages when an anticipated one million Aussies could be out of work. The upside for the miners is that their workforce will probably be more willing to accommodate changes to their work conditions.
The new restrictions aren't expected to change the fundamentals for the sector either. The tailwinds, such as the forecast pick-up in Chinese demand for our minerals and strong balance sheets, have not changed.
If my positive view on the sector comes to pass, this will be the second time miners help prop-up our economy during a crisis.
