By Maria Combrink, deputy chair of Women in Mining South Africa (WiMSA)
Mining dates back to prehistoric times and has always been driven by the changing needs of society – from mining for flint to fashioning hunting tools in early times, to the most recent quest for critical minerals for cleaner energy and technology. Mining, despite having a significant impact on the environment and local communities, is critical to modern society and remains a significant contributor to South Africa’s economy in a complex and constantly evolving landscape. The evolution is driven by a number of trends, threats, and opportunities that change over time and are directed by the needs of society. These changes are not only driven from within mining companies, but also along the entire value chain of mining. Suppliers to the mining industry can play a critical role in addressing the trends, threats and opportunities faced in the mining industry.
Demand for critical minerals
One of the most significant trends currently is the increased demand for critical minerals around decarbonisation, defence and technology. The rise of renewable energy and electric vehicles is driving an increased demand for minerals like lithium, uranium, graphite, REE, vanadium and copper. This demand in turn can drive investing in exploration efforts to uncover new reserves and drive greater commodity diversity in the mining industry. Globally grassroots exploration has fallen by 10% in favour of late-stage exploration, with mine site exploration coming in a close second. This trend is driven by the investment climate that has since 2012 pushed commodity companies to focus more on extending known resources rather than risky early-stage projects and new geographies. Alongside the change in types of project investment, there was a shift in the types of commodities that are being considered for investment. As mentioned, the drive for critical minerals in clean technologies are on the forefront of this trend. This means that there is a decline in gold activity in favour of critical minerals. These trends towards specific stages of exploration, as well as specific commodities, might lead to a supply deficit in other commodities in the future, as the focus on greenfield exploration declines.
Technological advances
Another trend driving change is the growing emphasis on technological advances such as automation, data analytics and artificial intelligence. These new technologies can be deployed to improve efficiency, resource extraction and safety. Deploying innovation enables mining to stay ahead of the changing landscape by utilising data in near-real time, from an auditable single source of truth. This will allow companies to screen opportunities and risks, monitor performance easily and comprehensively, and quickly adjust and adapt. New technologies, such as autonomous remote mining and inspections, may in turn address labour diversity issues as the need for new or different skills can ensure that women, or people with physical disabilities can now enter the mining production arena. This shift in mining labour demographics is especially significant as the workforce ages: new tech advances could attract different talents that the industry may have overlooked previously.
Driving sustainability
New technology has consistently brought benefits to the mining industry. From increased productivity, higher throughput and operational safety to yet another driving trend – minimising environmental harm and the drive towards sustainability. The move towards more environmentally friendly practices is evident – from the commitment of a reduction in the carbon footprint, to more ethical and responsible water use throughout the mining lifecycle. This trend is not only driven by regulation and consumer practice, but also from the social impact experienced by mining communities, which is an integral part of a mining company’s social licence to operate. The continued geopolitical and social backlash that the mining industry faces drives the environmental, social, and governance (ESG) trends such as tailings management and a standardised way of reporting on ESG issues. The disclosure alignment for tailings – Global Industry Standard on Tailings Management (GISTM) – assists companies in the move towards responsible management of tailings facilities as it commands enforcement, assurance and oversight. Additional industry aligned reporting as enforced by the International Financial Reporting Standards (IFRS) Foundation’s disclosure standards will drive the nature of ESG reporting to bring about consistency, transparency and comparability across the industry.
Infrastructure challenges, policy uncertainty, water scarcity
Two major existential threats to the South African mining industry are infrastructure challenges and policy uncertainty. The aging infrastructure, power grids and transportation networks, are not only disruptive but add to the cost of mining in South Africa. Both the uncertainty in government regulations, policies and transparency and possible additional labour unrest create an uncertain investment climate in the country. To mitigate some of these threats, strategic focal points such as earlier engagement with labour unions, promoting greater governmental investment in infrastructure upgrades, and collaboration between industry bodies and government may lead to greater stability and long-term investment.
A third threat that will receive greater focus is water, as South Africa is a water scarce country. With the impact of climate change and the increased severity and frequency of droughts, which may hamper food production, there may be an increased financial cost and social risk especially in water stressed areas within the country such as the Northern Cape.
However, it is not all doom and gloom. There is an opportunity for suppliers to the mining industry to play a critical role in addressing these trends and threats. This can be done in a number of ways to allow the mining industry to adapt to its changing environment and the challenges that come with it.
The opportunity for suppliers
Firstly, suppliers can offer innovative sustainable technologies and equipment that promote responsible mining and reduce the environmental impact. Secondly, with the rapid advances in technology companies can develop and supply cutting-edge solutions – from tools and machinery to monitoring equipment – to enhance safety as well as operational efficiency. Thirdly, the issues in supply chains during and post-Covid has highlighted how establishing local manufacturing capabilities can reduce the dependence on imports and the impact of market volatility. Local manufacturing will create jobs and equip people with the latest skill sets, and in turn strengthen the mining supply chain. The adoption of green supply chain management may mitigate many threats the mining industry faces, while increasing employee satisfaction, operational and relational efficiency and enterprise performance.
It is evident that the trends discussed are driven over longer cyclical periods, but will remain relevant in 2024, while the growing pressure is to do more to address climate change and related ESG issues. Companies can take an approach where they adopt a mix of strategies. However, without the assistance and buy-in of suppliers, the risk will outweigh the rewards in an industry best placed to drive economic transformation. Credibility and accountability are essential to ensure continued investment in the South African natural resource and mineral wealth.
| Introducing Maria Combrink:
With a BSc Environmental Management, BSc Hons Geology, MSc, Compliance Management certification and several IT qualifications, Maria Combrink is a dynamic problem solver with multidisciplinary project management experience and a love for governance, compliance and data. She has more than 15 years of experience in data management, analytics and governance. Combrink believes that data is not worth anything if it cannot be used as information that will assist informed decision making. Measurable variables are vital as if it can’t be measured, it can neither be reported nor improved upon. Combrink is the deputy chair of Women in Mining South Africa (WiMSA) and believes that the workplace of the future is an accessible space for all. For more information on WiMSA visit: https://www.wimsa.org.za/ |
 Maria Combrink, deputy chair of Women in Mining South Africa (WiMSA). Supplied by Maria Combrink |