Modern Mining March 2020

managers alike integrating ESG principles into their decision-making. Particular attention is being placed on how companies are dealing with issues such as cli- mate change, water management, health & safety and communities – all important aspects of mining operations. “Overall, the pressure on mining companies has increased dramatically. From an investor point of view, there is about US$25-35-trillion of global inves- tor funding attached to the ESG principles, which means that if a mine doesn’t comply with these stip- ulations, they get excluded from that capital base,” explains Swart. From a commodity perspective, Swart believes this has a significant impact on most South African and African operations at large where significant of baseload in the next coming years will still come from coal. He reasons that mining companies will be forced to diversify their energy mix, but the real- ity is that a country like South Africa “won’t just flip a switch and leave coal just like that”. He also rea- sons that there is also a big job dependency in coal mining, not just people who are directly employed, but also companies upstream and downstream of the sector. However, it’s important to drive home the point that mining companies that don’t prioritise the SEG values may find themselves shunned by an invest- ment community intensely focused on delivering both financial and social returns. The report sug- gests that companies that succeed will be the ones who lay a proper foundation today by establishing clear strategic goals and aligning operations to achieve those goals through financial discipline and the mitigation of risk. To respond effectively to investor expectations, the report suggests that mining companies will likely need to “move away from a mindset that relegates corporate social responsibility to a discrete function”. Instead, they should consider revising their business models to tackle some of society’s biggest issues – from stakeholder engagement and creating a reg- ulatory dividend to investing in renewable energy, getting proactive about the low-carbon economy, localising procurement, strengthening diversity and inclusion, respecting human rights and fostering cross-industry collaboration. On the road towards intelligent mining Digital technologies, artificial intelligence and ana- lytics solutions have the potential to transform the mining industry. While many companies have launched digital programmes, companies often are not deriving the value they originally hoped for. A retrospective look at this trend was taken in Deloitte’s Tracking the Trends report, summarising key lessons learned and where companies need to focus going forward.

It has been about two to three years since many mining companies started down their digital journeys in earnest. Looking back over this time, Swart says “we have seen some firms making strong advances but others struggling to realise the full return on their intelligent mining investments”. Now may be a good time to take stock and review some of the lessons learned so that companies can optimise their digital journeys and unlock sustain- able value. The report states that technology is not the sil- ver bullet. Many have assumed that technology will be the solution to a particular problem. People are also critical, but very often companies need to fix the underlying process. Without that underlying process redesign, technology can become a bandage, trap- ping the underlying value to the organisation. “Over the past three years, more mining compa- nies have started to digitise. Some have seen value in their investments, while others haven’t. One of the reasons for failed digitisation regimes is that more often companies are focused on technology and not the people,” says Swart. Digitisation is not a technology implementa- tion, he says. “It’s about changing the behaviour of people because you are putting information in their hands and how they use that information to drive dif- ferent behaviour is important in the success of the overall digitisation programme.” Intersection of talent and community To capitalise on the digital revolution, the Tracking the Trends report suggests that mining compa- nies need a thorough understanding of the impact that digital transformation can have on work, the workforce and the workplace, and in turn on the communities in which they operate. Digitalisation, automation and remote work models, including remote operation centres, could potentially disrupt up to 60 or 70% of mine site roles – an impact that will likely be felt most across entry-level roles, which often includes diverse talent,

Many mining companies are embracing intelligent mining through investments in automation and technology modernisation.

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