Does COVID-19 Affect the Business Sustainability of Mining Industry? Some Indonesian Evidence


This study aims to investigate whether COVID-19 affects business sustainability in terms of the economics of the mining industry in Indonesia. Specifically, this article examines whether the economic sustainability of mining companies improved or worsened after the COVID-19 attack on the country. The current research measures economic sustainability using the Altman Z financial distress model and profitability. Using 43 publicly listed companies in the mining industry as a sample, the analysis of the Wilcoxon signed rank test reveals that the Altman Z score increases significantly in the period after the COVID-19 contagion as compared to those before the contagion. Meanwhile, there is no difference in the profitability of the mining industry before and after the COVID-19 contagion. The results suggest that the mining industry remains strong despite the huge effect of the COVID-19 pandemic, which led to a decrease in the coal price due to the large scale social restrictions. The financial performance of the mining industry shows an improvement, as marked by an upward trend in the Altman Z score from 2018 to 2021. The profitability of the mining industry has been stable from 2018 to 2021. This study offers evidence of the mining industry’s financial condition in the Indonesia Stock Exchange (IDX) when COVID-19 attacked Indonesia, at a time when the gold price reached its maximum and the president banned the export of mining products’ raw materials.

Keywords: economic sustainability, financial performance, Altman Z-score, financial distress, profitability, COVID-19

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