The storm in the mining sector has been brewing for some time. When commodity prices were booming, most mining houses put off plans to innovate and streamline, enjoying the blue sky opportunities and reaping the rewards of the market peak. Then, when the clouds gathered and prices plunged, innovation was again put on the back burner as keeping the lights on – let alone making a profit – became the number one priority.
The clouds are now growing increasingly darker as government regulations add pressure on mining houses to not only make profit but to ensure job sustainability in the sector and, at a greater level, drive transformation.
But it’s not all doom and gloom, just yet. The current climate highlights that the more constraints the environment presents, the more mining houses need to optimise the remaining variables – and technology is the key to achieving this.
Disrupting the mining industry
We desperately need to see an “Uberisation” of the mining sector in South Africa. This involves a collective drive toward the combination of technological advancements and big data that made ride-sharing company, Uber, so successful and revolutionary.
While Uber and the mining sector may not be immediately comparable in our national conscious yet, there is nothing stopping the latter from taking inspiration from how the former disrupted business as usual in its industry.
Uber’s software changed the way people across the world move, with the power to catch a taxi almost anywhere, at any time and at the touch of a screen. Most importantly, though, it is powered by big data. In just one example, the company’s “surge pricing” approach uses predictive modelling of all drivers and customers at any time to adjust its price structures to meet supply and demand constraints.
In the same way, big data has also made it possible for Uber to efficiently match drivers and clients, reducing waiting time and increasing car utilisation, real-time information can empower decision makers at mines.
The mining sector needs the same technological revolution and it needs it urgently. We’ve already seen advancements to mining equipment in the form of automated machines that test the levels of harmful gasses following a blast and in wearables that monitor the vital statistics of mine employees.
While these types of innovation are crucial, mines need to take the next step and monitor as many variables as possible in order to be able to accurately predict what is coming. For example, a system of monitors across a mine’s fleet would provide enough data for predictive modelling that would indicate when each machine or vehicle would need maintenance, providing enough planning time, avoiding downtimes and ensuring continuous operations.
However, this is not only about the improvement of mining processes. The technological revolution in mining is also about the improving the level of skills. Will there be resistance to technology in the mining sector due to the perception that it will result in job losses? Yes. For centuries there has been a fear that innovation equals job cuts, yet history has taught us time and time again that, in fact, this is not the case. The Luddite fallacy, the economic observation that new technology does not destroy jobs but rather changes the nature of work for the better, comes to mind.
We have already seen how advanced sensors provide live information and rather than replacing operators, this technology is actually training and empowering them to make better decisions.
To overcome the mindset that technology will endanger jobs, there needs to be a shift in this perception by government, mining houses, labour and the public in general through the use of data and studies to show that technology can actually lead to more jobs, greater skills transfer and more importantly upskilling of people with portable skills.
It is technology, not subsidies, that will add value to the mining sector in South Africa. This industry needs to compete globally and subsidies are not a sustainable method to encourage healthy competition. An increase in productivity is what can make a real difference to boosting our activities in the global market, but we need the technology in order to be ready to do so.
The time for the revolution is now. What the mining sector needs is enlightened companies that recognise that technology and innovation are the best ways of surviving the stormy situation they are facing, which will only entrench their positions as market leaders when the commodity cycle turns.
South African mining firms say plans by government to charge them two-thirds of the cost for treating water pollution resulting from their operations are unfair and would put the ailing industry under further financial strain.
South Africa, one of the world’s biggest metals producers, has been hit by a slide in commodities prices that has come on top of widespread labour unrest among miners. Mining output in May plunged by 18 percent, the most on record.
“Any further financial pressures would certainly threaten the sustainability of the industry,” said the South African Chamber of Mines’s executive for environment, Nikisi Lesufi.
Lesufi said the chamber also opposed the levy because mining companies had adhered to the laws and regulations that were in place at the time.
“It is the industry’s view that AMD legacy issues are the responsibility of the state,” Lesufi said, adding that it could not comment on the design and implementation of the levy because had not been privy to the department’s plans.
Acid mine drainage (AMD) results from the outflow of acidic water from mines, and often affected water supplies develop pH levels similar to those of battery acid, rendering the water harmful to humans as well animal and plant life.
South Africa’s water ministry on Wednesday said it would charge mining firms 67 percent of the cost for treating polluted water emanating from their century-long operations in Johannesburg’s mining belt.
Water is already scarce in South Africa, which is in the midst of its worst drought in over 100 years as an El-Nino weather pattern has caused rainfall levels to plummet.
Water Affairs Minister Nomvula Mokonyane said the cost to government would be 600 million rand ($38 million) a year, and that government would cover the anticipated recoveries from the mining sector prior to the implementation of the policy.
“It will be difficult for government to find mines still standing that can pay this proposed AMD levy. Many have simply closed down,” said professor of governance at Wits University Mike Muller.
“The rehabilitation funds that should have provided for these costs have also often largely disappeared with very little accountability.”
The African Association for Public Administration and Management (AAPAM) says there is need for the continent to improve in areas of waste management.
The AAPAM delegation from Kenya led by Ronald Jumbe said waste management was cardinal because the environment in economic zones on the continent was being negatively impacted.
Mr Jumbe said this during a conducted tour of the Lusaka South Multi Facility Economic Zone (LS-MFEZ) in Lusaka on Thursday by 45 public administrators and managers.
He said the LS-MFEZ plan was a good initiative which would bring in foreign exchange for the country as it was not only meant for local but export market as a whole.
Mr Jumbe said the Kenyan delegation was eager to learn how Zambia had implemented the economic zone.
He said Kenya had huge industrial Export Processing Zones (EPZ) that utilise local raw materials, in terms of labour and human resource to manufacture products for both local and export markets in the region.
“Countries in this region need to improve in the area of waste management. This is because the environment in economic zones in most countries around the region is being impacted negatively,” he said.
Mr Jumbe said another experience his team learnt was that local people were involved in the LS-MFEZ process which was a different concept in Kenya.
He urged LS-MFEZ management to continue upholding the involvement of local people.
Zambia, a member of international bodies and signatory to a number of international treaties, hosted the 37th AAPAM Roundtable meeting, where more than 500 delegates assembled in Lusaka to tackle and seek solutions to issues of public administration at continental level.
The annual conference was held at Mulungushi international Centre (MICC), from February 29 to March 4 under the theme, “Transforming Public Administration and Management (PAM) in order to contribute towards the Agenda 2063 within the context of the Sustainable Development Goals.”
CAPE TOWN – A study into innovation in Africa’s mining sector has shown that mining houses will need to innovate if they want to succeed in a sector marked by plunging commodity prices, deeper and more dangerous mines, greater geographical complexity and labour unrest. The ‘Innovation State of Play: Africa’ report, compiled by Monitor Deloitte and Mining Indaba, shows that the African mining sector is midfield in terms of innovation focus and impact. It scores on the lower end of competence on the industry maturity scale, but is slightly above the Canadian average.
“This hints at an opportunity for the continent to push ahead and truly lead through innovation, particularly as the operational context lends itself to thinking and working differently to unlock efficiencies,” said Deloitte Africa mining leader Andrew Lane. The study, the second of a three-part series which also covers Australia and Canada, examined current perspectives on innovation through a series of executive interviews. It also used the Innovation Scorecard survey methodology developed by the Deloitte innovation unit, Doblin.
Based on responses from mining executives, the current breakdown in Africa’s mining innovation was a relatively balanced 61% core, 23% adjacent and 16% transformational. This innovation ambition matrix is considered to be healthy. It follows a similar trend to the Canadian market. Core innovations are defined as innovations that optimise existing products for existing customers, while adjacent innovations are those that expand existing business into “new to the company” business.
Transformational or new innovations are considered breakthroughs and inventions for markets that do not yet exist. While the African market has a strong focus on core products and markets, including technological solutions to optimise old techniques as and when needed, the survey determined that there is significant scope to unlock higher levels of adjacent and transformational innovation. The study found that companies find it a challenge to spread risk. Lane said innovation needs to address the mine system holistically, incorporating it into social, labour and stakeholder spheres. “This is a view that is more inclined to be embedded in Africa’s mining players and one behind which there is a rallying call to capitalise on more.” Lane said companies need to be clear about what they are working on and how they envision their businesses of tomorrow if they want to unlock the potential of innovation and create a sustainable mining sector. “Importantly, senior management needs to champion innovation, while the appropriate governance structures need to be in place.”