The mining industry is in a crisis, says digital engagement company Wyzetalk CEO Gys Kappers. He points to the country’s inability to ensure the “right” legislative, administrative and operating environment, which is being compounded by a decline in resource demand, weakening prices and increasing volatility.

“Many also need to mine deeper to reach new deposits, which is resulting in a significant increase in the cost of extraction . . . these costs are forcing mining companies to make difficult decisions to sustain short-term operations, while still adhering to long-term objectives,” comments Kappers.

Moreover, advanced technologies are severely impacting on the broader industry. “Emerging products and services require new materials, which is changing the mix in the demand for minerals and metals and this is expected to continue. This, of course, has long-term implications for the demand for primary resources. . . and, for the foreseeable future, this state is the ‘new normal’.”

Kappers suggests that the mining industry will have to embrace this disruption as both a constraint and an enabler. He states that, with digital disruption, most observers cite the example of machinery optimisation and how the mining industry can leverage digital technology to deal with the productivity and safety challenges it faces. “In fact, most focus on the technology dimension . . . and underemphasise the people management and organisational dimensions.”

He states that few consider the new realities of work, such as the changing role of jobs and the new jobs that will emerge. “Even less is said about how this digital transformation might be managed – a difficult process characterised by many knowns and even more unknowns. What will the mine of the future look like?”

Kappers says that change in every respect is required for survival. “If mining companies are to succeed, they will require a deeper understanding of the shifting community to improve the social divide.” He adds that increased demand for business transparency and accountability globally is forcing the sector to relook at how people and the industry are managed.

“There is an unwritten set of expectations of the employment relationship distinct from a formalised contract and this psychological contract will define the employer-employee relationship,” says Kappers.

He says that this relationship needs to shift to view workers as people with families – rather than just the ‘hands’ to engender bottom-line improvements, which will result from better engagement and collaboration. “Shifting people from an income statement expense to a balance sheet asset is critical.”

Kappers proposes a shift towards innovative thinking that influences the way mining companies engage with workers, their surrounding communities and those from their labour-sending areas. “New technologies and ways of connecting have the potential to influence a different outcome for the broader community – one that makes the mining house and community share the responsibility for a changing landscape with divergent future scenarios.”

He states that new tools result in new emergent management philosophies and so mines have to consider what it will take to appropriately transform the current management philosophy in ways that will enable them to leverage the potential benefits of digital technology and transformation.

“As in any other age, management in the digital age should be concerned with the deployment and coordination of people and resources at various levels of the organisation to steer a new course to realising strategies. The difference here is that the organisation and its key resources will be digitally enabled, with a view to becoming far more efficient,” Kappers claims.

He adds that structures and jobs will become fluid and permeable, merging into value ecosystems rather than value chains. “People will work in virtual teams and disband as needs change.” Hence, the management challenge will lie in data analysis and deploying and coordinating people and digital resources in ways that will enable the best possible results.

Kappers states that innovation should drive more than cost reduction – it can help mitigate and manage risk, strengthen business models and foster more effective relations. “Mining companies need to prepare to shift traditional entrenched models, plan for future scenarios where collaboration is at the centre of a lean operation and use digitalisation to enable and drive the industry forward,” he concludes.