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Mining companies prepare for a digital future

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Digital solutions are now embedded in every initiative undertaken by the mining industry, which means the benefits can be more easily tracked. Image credit: Leon Louw for WhyAfrica.

Mining companies prepare for a digital future 

Digital solutions are now embedded in every initiative undertaken in the South African mining industry, which means the benefits can be more easily tracked.

One hundred percent of the respondents that took part in a recent survey by PwC South Africa and the Minerals Council South Africa (MCSA) are making the transition to digital, including using technology for their ESG programmes.

Last week, PwC and the MCSA shared its second publication on The state of digital transformation in the South African mining industry: Ten insights into 4IR 2023.

According to Roger Baxter, MCSA CEO digital transformation is imperative for mining as it serves as the seamless thread through all the mining value chain processes, and enhances safety and health, security, production, and workforce and leadership capability.

“The implementation of these processes needs to be executed with care and responsibility,” says Baxter.

The first survey, which was conducted in 2021, focused purely on digital transformation and 4IR readiness.

The scope of the latest report was expanded to include environmental, social and governance (ESG) aspects to bring the industry in line with what is expected of companies in the modern world.

While survey respondents were predominantly CEOs, and/or nominated senior leaders from mining companies, organised labour representatives and mining engineering graduates also participated. The aim was to search for a broad range of opinions to understand the implications of digital transformation on South African mining.

The ten insights covered in the report are:

  1. Mining CEOs and their executives are being deliberate (Mining companies prepare for a digital future)

Compared to 2021, mining CEOs now are focused on innovation rather than a top-down initiative-based approach. In our previous survey, we saw CEOs driving the digital agenda from the top. Since then, there has been greater digital adoption as employees see the value of these solutions. As a result, digital solutions are now embedded in every initiative, which means the benefits of this can be more easily tracked. According to the survey, 100% of respondents are making the transition to digital, including using technology for their ESG programmes.  

  1. Technology is being applied where it has the greatest measurable benefit

Digital tools are providing miners with visibility and transparency of their business by reducing bureaucracy and, ultimately, providing them with the ability to make better decisions.

  1. The hunt for value requires cooperation and compromise

Cost leadership, efficiency, and profitability remain the number one concern of mining CEOs, with overall business sustainability and longevity coming in second. The fight for capital allocations is based on measured benefits, which has been a challenge in the past for digital programmes. 

  1. Digital tools don’t just measure, they contribute (the union perspective)

Labour unions are key stakeholders in the mining industry and have a unique perspective on the value of digital and 4IR. Two surveyed unions say digital technology is essential to improve health and safety, and plays a key role in communication, but that its greatest value is in providing workers with the insights they need to be successful.

  1. The imperatives for sustainability, and the crown jewels

Data is at the centre 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 ten years as trustworthy information is needed in real-time. This brings with it the need for Artificial Intelligence, machine learning and other big data technologies to make sense of large data sets.

  1. We are up to the challenge and have the tools we need to win

South African miners have not been satisfied with the progress in digital and 4IR transformation in the past few years. Mining CEOs agree that we have spurred on the development, use, and understanding of technology in the mining space, but unanimously agree that we could have done better. 

  1. Mining is about people — and we need to fight globally for talent

Leadership is key, however culture can replace scarce skills. The publication looks at how mining needs to create an environment that attracts young talent in a world that also needs data scientists and digital natives.

  1. ESG — critical for business survival or tick-box?

While ESG may be one of the latest buzzwords related to business and sustainability, the response to ESG 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. This requires a fundamental rethink in terms of the risks and opportunities presented by these drivers and the underlying systemic changes they demand. 

  1. ESG — regulations shape ESG requirements (for better or worse)

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. 

  1. ESG drives long-term value

Without a blueprint or clear regulations, miners have chosen their own preferred path and reporting for ESG. While unions say there is less focus on social and governance issues, all parties regard ESG as a path to a sustainable mining future, with digital as the means to accomplish these goals.

Ian Mackay, PwC Smart Mining Senior Manager says that digital transformation and ESG practices are paying off — qualitatively and quantitatively.

“Digital is successfully competing for capital in mining as it is providing measurable benefits and delivering real change,” says Mackay.

“What is also encouraging from the survey is that the ownership of the digitalisation strategy is no longer a business unit — instead, we find digital embedded in every project, and a renewed focus on measurement of real-world results,” adds Mackay.

According to Chrisna Evans, PwC Mining Operation Transformation Associate Director, there is an increase in the number of mining organisations investing in digital journeys, compared to the previous study.

“Based on where mining entities are on their journey, the next five years will present a potentially transformed mining sector and will eventually result in integrated digital mining operations that embrace the organisation’s value drivers and the benefits of 4IR,” says Evans.

Mining companies prepare for a digital future 

WhyAfrica provides on the ground information and business intelligence about the sustainable utilisation and extraction of natural resources in Africa, and can assist your company through:  

  1. Membership:
  • WhyAfrica’s membership offers great business insights to you, your company, and clients.
  • Amongst many other benefits, we will publish editorial content about you or your company on the WhyAfrica online platform and on all WhyAfrica’s social media pages – the annual fee is R5,500 and you can find out more or subscribe here: https://www.whyafrica.co.za/product/membership/ 
  1. Sponsorship:
  • WhyAfrica’s annual 45-day African Road Trip takes place in July and August. We will visit more than 30 project sites and this year we plan to visit the Limpopo Province of South Africa, Zimbabwe or Botswana, Zambia, Malawi, Tanzania, and Kenya. Sponsoring the Road Trip, or to be a WhyAfrica member, gives you unparalleled insight into the business environment of the countries that we travel to and the project sites we visit.
  • To be a member or sponsor allows you access to invaluable, on the ground, business intelligence and a great marketing opportunity for all companies doing business in Africa.
  • The main aim of our Road Trips is to promote Africa as an investment destination and to showcase Africa’s greatest companies, and projects to our large global audience, which includes a list of potential investors, venture capitalists and serial entrepreneurs.
  • To view the photos of last year’s Southern Africa Road Trip click on the gallery link or follow our Instagram account at why.africa https://www.whyafrica.co.za/road-trips/whyafrica-road-trips/. 
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Mining companies prepare for a digital future

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AgricultureEnvironmental Management & Climate ChangeEnergyESGInfrastructureMiningPolitical EconomyTourism and ConservationWater Management