Since 1886, South Africa’s economy has been closely tied to the mining industry. The discovery of gold, diamonds and platinum catapulted South Africa into the biggest African economy for the better part of the 20th century and still ensures that we remain the continent’s most diversified economy.
The mining industry has faced challenges over the years. Waning demand from China as its infrastructure build programme had to be halted due to the 2008 Global Financial Crisis was the first significant challenge we had to overcome. This was followed by the decreased demand and production during the Covid Pandemic and the current infrastructure challenges posed by Transnet that are causing bottlenecks when exporting coal to European markets (where there is currently significant demand).
The biggest challenge remains the modernisation of mining methods. Of course, this modernisation impacts jobs; however, shareholders argue that this impact should not always be prioritised over operational efficiencies.
Where are we when it comes to the impact of the Fourth Industrial Revolution on our mining industry? I recently read an interesting article which discusses ten key insights.
Mining CEOs and their executives are being deliberate
The PwC article points out that, in contrast to 2021, the mining CEO is focused today on innovation rather than a top-down initiative-based approach.
Leaders now see Digital and 4IR as a de facto part of mining. According to the survey, 100% of respondents are making the transition to digital, including using technology for their ESG programs.
Technology is being applied where it has the greatest measurable benefit
The PwC article adds that digital is providing miners with visibility and transparency of their business – it is reducing bureaucracy; and ultimately providing us with the ability to make better decisions.
The major data driven decision making platforms will be maturing from 2025-2027 and are expected to challenge our assumptions around how we mine.
The hunt for value requires cooperation and compromise
The PwC article points out that cost leadership, efficiency, and profitability remain:
- The top concern of mining CEOs – with overall business sustainability and longevity; and
- the fight for capital allocations is based on measured benefits; and Indirect benefits are difficult to measure, as is the ability to enable future value.
Image By: Sandvick
Digital tools don’t just measure, they contribute (the union perspective)
The PwC article adds that labour unions are key stakeholders in the mining industry and have a unique perspective on the value of digital and 4IR.
Two surveyed unions tell us that digital technology is essential to improve health and safety and plays a key role in communication. They also told us the greatest strength of digital is that it enables workers and provides on the job assistance.
The imperatives for sustainability, and the crown jewels
The PwC article points out that after seven decades of peaceful trade, the world is starting to de-globalise in 2023.
Data is at the center of business success and sustainability in this new world and data will be the most intensely managed part of the mining business over the next 10 years, because trustworthy information is needed in real-time. CEOs anticipate a shift from reactive to proactive management – which requires these new tools.
We are up to the challenge & have the tools we need to win
The PwC article adds that South African miners are not satisfied with the progress in digital and 4IR transformation since 2019.
The CEOs agree for the most part that the past three years have spurred on the development, use, and understanding of technology in the mining space, but unanimously agree that we could have done better.
Mining is about people – and we need to fight globally for talent
The PwC article points out that leadership is key, while culture can replace scarce skills. Mining needs to create an environment that attracts young talent in a world that also needs data scientists and digital natives.
However we also hear about success stories where the workforce is enabled and transformed digitally over time – without importation of new skills.
ESG: critical for business survival or tick-box?
The PwC article adds that, while environmental and social governance (ESG) may be one of the latest buzzwords related to business and sustainability, the response to environmental, social, and governance drivers is not in any way new to the mining sector.
However, the way in which mining companies in South Africa need to engage with these drivers is changing. That requires a fundamental rethink in terms of the risks and opportunities presented by these drivers and the underlying system changes they demannd.
Image By: Boris Bukovský via Pixabay
ESG: Regulations shape ESG requirements (for better or worse)
The PwC article points out that, while legislation drives the responsible business agenda for our mining industry, embedding ESG into your organisation is more than just compliance – it is centred on the ability to create long-term value.
ESG drives long-term value
The PwC article addas that, without a blueprint or clear regulations, miners have chosen their own preferred path and reporting for ESG. The unions argue that there is less focus on social and governance issues as larger attention is given to environmental protection, but all parties regard ESG as a path to a sustainable mining future, and digital as the means to accomplish these goals.
It is clear that the mining industry is in a period of transition. If rolled out effectively, this could lead to significant value and the continuation of a world class mining industry.
The Mystery Practitioner is an industry commentator that focuses on the shifting dynamics and innovative thinking that BRPs and turnaround professionals will need to embrace in order to achieve success in their businesses.
