With the recent high-profile accidents and burgeoning resource nationalism, the future of the mining industry has never been so topical. With costs also rising, the necessary operational and societal changes will need to be coupled with a technological revolution to deliver a re-imagined extractive sector.
The world stands on the brink of huge technological change, and the mining industry could be amongst the major beneficiaries of a fusion of technologies that has become known as the 'fourth industrial revolution' (4IR). This imminent transformation follows the first industrial revolution of the 18th and 19th centuries, which was characterised by steam power and the rise of the iron and steel industries; the second revolution (1870-1914), which saw the harnessing of electricity for mass production; and the third, digital, revolution of the past 40 years.
The current industrial revolution will build on the digital revolution, with a fusion of technologies to create new integrated processes. The 4IR term was coined in 2015 by Professor Klaus Schwab, the founder of the World Economic Forum. In his book, 'The Fourth Industrial Revolution', published the following year, Professor Schwab described the enormous potential for the new technologies. He said, "The changes are so profound that, from the perspective of human history, there has never been a time of greater promise".
Professor Schwab added, however, that the changes were also a time of potential peril. He expressed his concern that "decision-makers are too often caught in traditional, linear thinking, or too absorbed by immediate concerns, to think strategically about the forces of disruption and innovation shaping our future".
For the mining sector, these new technologies must be shaped to encompass, surely, a safer and more comfortable working environment, an equitable share of the wealth generated, greater operating efficiencies and an improved public profile. To achieve this we might need a new type of mining company.
To achieve such improvements, the CEO of Anglo American, Mark Cutifani, recently called for the various stakeholders to "work together to create a new mining industry". There will be myriad individual changes in this re-imagined mining industry over the next 30 years, but they can be grouped, perhaps, into five broad categories.
1. Safer and More Comfortable Working Environment
Automation has the potential to remove workers from harm's way but is also of concern to unions because of the threat, whether real or perceived, of lower levels of employment.
The Vice Chancellor of Witwatersrand University, Professor Adam Habib, has warned that industry "needs to find a role" for the unemployed when operations are digitised. Several speakers at the recent Indaba conference in Cape Town disagreed that there will be net job losses.
The CEO of Vedanta Zinc International, Ms Deshnee Naidoo, told Indaba delegates "there will not be job losses when mines are digitised". The CEO of Exxaro Resources, Mxolisi Mgojo (who is the current president of the SA Chamber of Mines) also argues that there is not, necessarily, a net loss of jobs. However, people need to be trained, he says, on the virtual mine, and the industry needs to "bring people with you, otherwise they will be suspicious".
The head of Exxaro Resources' coal division, Dr Nombasa Tsengwa, admits there is a "challenge with unions over jobs" but argues that the technological changes will allow work to be made easier, and safer.
2. Equitable Share of the Wealth Generated
There is no doubt that the wealth extracted from the earth needs to be more fairly distributed than in the past. The head of the UN Economic Commission's Natural Resources Division for Africa, Kojo Busia, has underlined the importance of this by observing that mining can have a "catalytic impact" on local economies.
Ghana's President, Nana Akufo-Addo told delegates at Indaba that the history of mining in Africa has "not always been a happy one", and pointed out the irony that "the continent with the richest resources has amongst the world's poorest people". The president added that there are "riches on the surface in the form of a young and dynamic workforce". He called for mining companies to be "part of the transformation", saying it is "time to make Africa prosperous … the people of Africa do not need to be poor for others to be rich".
Botswana's Minister for Mineral Resources, Green Technology and Energy Security, Eric Molale, has stressed the necessity of sharing the wealth derived from natural resources, and Nicole Bieske of Transparency International says "resources must benefit people". South Africa's Minister of Mineral Resources, Gwede Mantashe, agrees, saying "mining is not about rocks, it is about people", and that mining "must be seen to be benefitting local society".
On the corporate side, Mr Cutifani has long argued for the need to create sustainable jobs in the communities around mines, perhaps by providing access to mine infrastructure. We must, he said, "turn mines from being a negative to being a positive experience".
3. Greater Operating Efficiencies
In today's world, if you can imagine something, there is a high chance that you can create it. Mining methods, however, have not changed much since the publication of De Rey Metallica, in which Georgius Agricola catalogued mining in 1556.
Automation will likely be the key; of which there are, perhaps, six levels:
0 — No automation
1 — Initial mechanisation
2 — Line of site activity
3 — Remote activity
4 — Machine functions automated
5 — Intelligent machines.
Before the mining industry goes exotic, for example by extracting metals from under the sea or out into space, it needs to maximise the existing operations by making them bigger, deeper and better. This first step of innovation will include 'backyard opportunities', such as extracting metal from tailings.
Mr Cutifani is amongst those who predict that the next five years will see significant, step changes in technology. He sees, for example, new methods in identifying resources and sorting ore. He also predicts the much more efficient grinding of ore (with perhaps one-third less energy utilised and half of the water consumption).
Paul Mitchell, EY's Metals Advisory Leader, says that 'single point' solutions will become multiple solutions, and predicts that overall asset effectiveness (oae), currently under 50%, will be 65% oae within 10 years. The main issue, he said recently, is optimising productivity by solving the 'mine to mill' optimisation, and then extending it to 'mine to market'.
Mr Mitchell predicts that mines of the future will be different, with significant automation leading to more complex operations (with up to 20 working places), different extraction and blending methods, and different equipment (but not yet, he says, direct leaching from in-situ).
Gordon Smith, the head of technology at Anglo Platinum, says the starting point is always the orebody. The main issue when introducing new technology is about organising the work systems around the new technology, not the technology itself.
Agustin Costa of Boston Consulting Group predicts the early implementation of machine learning, where the machines control themselves based on incoming data alone. He recommends an early buy-in for staff with data visualisation, short-term results (to boost confidence) and embed the results into methodology.
4. Improved Public Profile
Tom Albanese, the former boss of Rio Tinto and Vedanta, notes that "mining is an essential industry but we must ensure that it is relevant to people". Too many people, he argues, think that all metals can be recycled. The industry needs to do much better in explaining its relevance, especially with the advent of electric vehicles and the burgeoning need for battery metals.
Technology should help make mining less disruptive, more environmentally friendly and also reduce accident rates, which will all help improve the industry's profile. Technology will also increase the likelihood of more women being employed, which will surely reduce the still too-frequent hostile encounters with stakeholders.
5. New Players
Mr Mitchell expects globalisation to be a big factor over the next 30 years, and says mining companies might be different, with more national and service companies. He noted the importance of Schlumberger in the oil industry, which invests much more heavily in technology than does the mining sector.
Companies are likely to consolidate, with the high capital cost of technology favouring the larger companies. The recycling sector in particular needs to "grow up", in the words of Mr Albanese, with too many family-sized units with lower environmental standards