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The 4IR and possible impacts on mining

Professor Klaus Schwab, Chairman and founder of the World Economic Forum (WEF), coined the phrase “fourth industrial” revolution (4IR) in 2015 in his seminal essay: “Mastering the Fourth Industrial Revolution,” which became a core debate in Davos in November 2016.

The first industrial revolution was based on the use of steam power, railways and mechanisation to automate production. It changed the basis of the economy from an agrarian economy to an industrial economy. The second industrial revolution was driven by the diffusion of electricity into industry as the preferred source of power. It made mass production for mass consumption possible based on assembly line type processes. The third industrial revolution was based on the introduction of microprocessors and integrated circuits, and the advent of the computer age including robotics. The fourth industrial revolution arises out of the third, and is the digital age based on the internet of things (IOT), artificial intelligence (AI), virtual reality (VR), machine learning, big data and analytics.

 

Schwab argues that the 4IR is different from other previous revolutions because of the scope, scale and speed with which digital technology and capabilities will impact and disrupt society:

 

So, what are the implications for mining?

In an interview on CNN on 24 September 2019, the Global Managing Partner of internationally renowned consultancy McKinsey, Kevin Sneader, stated that the 4IR would impact 60% of jobs globally. Such jobs would either be redundant or capable of automation. It is fair to assume that the pattern will be the same for mining.

Since the commodity and financial crisis between 2008 – 2012, mining companies have embarked on a process of improving operational efficiency, effectiveness and cost saving. One strategy, which many mining companies have followed, is the concept of digital transformation to reach the status of an “intelligent mine” or the “connected mine.”

From this perspective, mining companies have begun, to a large extent, to embrace the 4IR mainly for survival, maintaining competitiveness and for fear of being left behind relative to their peer group. The fact that some mines (particularly in South Africa) are more mature, deeper and more expensive to operate than in other jurisdictions in Africa and elsewhere, has resulted in mining companies adopting various elements of the digital transformation strategy.

Much of this effort has focused on fleet management and predictive maintenance as well as C&I systems that allow companies to present their operational data in visual form (such as dashboards) in a control room environment. This assists them with real-time data for improved operational diagnostics and decision making.

Some companies have gone further by focusing on the “connected mine”, particularly by using cloud-based solutions and data analytics. Examples of mining companies that have followed these digital transformation initiatives include Debswana, Exxaro and Vedanta.

Many companies such as Vale in Moatize make extensive use of drones for mapping and surveying, which in itself is not new, but the cloud-based technology utilised for analytics and interpretation is becoming increasingly 4IR.
Other mining companies have focused on driverless mining trucks, autonomous production drills vehicles and renewable energy. The energy crisis in South Africa surrounding power utility, Eskom, has resulted in mining companies looking to solve their own energy security needs. This includes using solar and wind energy and as well as investigations into hydrogen fuel cell technologies to improve energy costs, reduce diesel emissions and carbon footprints. Anglo Platinum in South Africa has, in particular, been at the forefront of developing hydrogen fuel cell technologies for electric vehicles using platinum as a catalyst.

Internationally, Fortescue iron mine in Australia has pioneered the use of autonomous haul trucks in its operations: its fleet of driverless trucks has moved more than 860 Mt of material, travelled more than 28 million km between 2012 and 2018, increased productivity by 30% and improved the company’s overall safety record. Significantly, the fleet is operated remotely from Perth and the company has invested in redeploying and retraining more than 3000 of its existing employees to make the system work.

 

At the recent Africa Mining Summit held at the end of September 2019 in Gaborone, Botswana, Professor Frederick Cawood (a Director from the University of the Witwatersrand’s:

Mining Institute) argued that the 4IR’s impacts on mining may include the following aspects:

  • The future is already here i.e. the 4IR is already here and impacting the sector
  • Poverty in Africa and the lack of middle class will influence how the effects of the 4IR unfold
  • There are potential benefits from automation and mechanisation but repercussions could include the perils of social dislocation and inequality
  • Mining cannot be separated from energy and energy security, therefore energy related metals will become increasingly important for mining
  • Without a proper definition for responsible mining practices in the African context, mining companies will end up having to take on more and more of the responsibilities that should belong to the state. As poverty, unemployment and inequality increase in host communities and communities generally so will the demand for mining companies to fulfil these roles and responsibilities. Accordingly, the state’s role may become increasingly blurred when it comes to the provision of health, housing and education
  • Climate changes are already impacting consumption patterns and what companies mine – the world has to reimagine energy and mining waste (including tailings) in order to adapt
  • The mining “push” for technology has become a “pull” for mining technology – there are a number of different and potentially competing interpretations of “intelligent mining”, “intelligent exploration” and/or the “connected mine” but mining companies are increasingly focused on connectivity. Despite the lack of an industry accepted or standard definition, the approach should be less about a “gadget approach” and more about of a “way of doing things” that creates shared value, connectivity and interactivity. Essentially, where real-time decision making is based on real-time data, resulting in operational excellence
  • Retrenchment of old skills is very likely and there will be a demand for different and new skills – a such, skills development programmes and a different kind of education system and outcomes, particularly from universities, will be necessary
  • Mining matters in Africa and Africa needs mining – the world need the mineral inventory that the continent has, so it will remain relevant notwithstanding the 4IR, even if mining becomes deeper and more remote
  • “Mining for benefit” will be a key issue during the 4IR, which apart from innovation and potential impacts (negative or positive) it means no harm to communities and no harm to the environment as far as is reasonably possible. It also means shared, real benefits for community stakeholders
  • Africa needs growth but what is also required is equitable growth, similarly this principle applies to mining – mining needs to grow as an industry but there also needs to be an equitable distribution of risks, rewards and benefits for stakeholders
    Ultimately, 4IR represents a tectonic shift in the economic base of our society locally, regionally and globally and in all industries including mining. The exact nature of these innovations, impacts and disruptions will be unevenly distributed until such time as the dominant trends emerge. At best, the mining industry needs to focus on its ability to sense or strategically anticipate changes in its environment and navigate these changes as pragmatically as possible; with clear leadership, good governance and a willingness to innovate, reconfigure and pivot its human capital, physical assets and operations sustainably and competitively.

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