ROGER BAXTER Digital tools are providing miners with visibility and transparency for their business by reducing bureaucracy and, ultimately, providing them with the ability to make better decisions
Digital transformation is imperative for mining, serving as the “seamless thread” through all the mining value chain processes, and enhances safety and health, security, production, and workforce and leadership capability, according to Minerals Council South Africa CEO Roger Baxter in commentary on a report released by the council and advisory and tax services firm PwC South Africa.
The Minerals Council South Africa is representing the South African mining industry at this year’s inaugural London Indaba, with outgoing Baxter to give an address in his last month of employment at the council.
The indaba will be held at the Intercontinental London Park Lane hotel, in London, in the UK, from June 26 to 27.
PwC and the Minerals Council published the second shared report titled, ‘The State of Digital Transformation in the South African Mining Industry: Ten Insights into the Fourth Industrial Revolution (4IR) 2023.’
The publication encompasses new insights, validates existing insights from the first report and articulates mining organisations’ commitments to using digitalisation and technology for the creation of business in the mining sector.
Baxter says digital transformation is “non-negotiable”, with the implementation of related processes needing to be executed with care and responsibility.
The first survey, conducted in 2021, focused on digital transformation and readiness towards embracing the 4IR.
The scope of this latest report; however, has 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.
“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 PwC smart mining senior manager Ian Mackay.
The aim of the survey was to search for a broad range of opinions in an effort to understand the implications of digital transformation on South African mining and finds that, compared to 2021, mining CEOs are now more focused on innovation as opposed to a top-down initiative-based approach.
In the previous survey, CEOs were 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, meaning the benefits thereof can be more easily tracked. According to the survey, all respondents are making the transition to digital, including using technology for their ESG programmes.
Further, digital tools are providing miners with visibility and transparency for their business by reducing bureaucracy and, ultimately, providing them with the ability to make better decisions.
“There is an increase in the number of mining organisations investing in digital journeys, compared to the previous study,” reveals PwC mining operation transformation associate director Chrisna Evans.
She adds that, based on where mining entities are in 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.
Cost leadership, efficiency, and profitability also remain the number one concern of mining CEOs, with overall business sustainability and longevity coming in second.
The report also reveals that because labour unions are key stakeholders in the mining industry, they possess a unique perspective on the value of digital and 4IR.
In this regard, 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.
Another key theme emerging from the report is that data is at the centre of business success and sustainability in the modern 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.
Further, the report also highlights that South African mining CEOs, not satisfied with the progress in digital and 4IR transformation in the past few years, have spurred on the development, use and understanding of technology in the mining space. However, the report also finds that many CEOs could have done better.
In terms of people, the report states that mining is centred around people, and talent in the sector should be more highly sought out. As such, it suggests that mining needs to create an environment that attracts young talent in a world that also needs data scientists and digital natives.
Moreover, the report found that 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.
While legislation drives the responsible business agenda for South Africa’s mining industry, embedding ESG into a mining organisation involves more than simple compliance – it is centred on the ability to create long-term value, the report states.
All in all, the report recommends miners conduct a fundamental rethink in terms of the risks and opportunities presented by these drivers and the underlying systemic changes they demand.
The survey also reveals that the ownership of the digitalisation strategy is no longer a business unit — instead, digital is embedded in every project, and a renewed focus on measurement of real-world results.