How is technological development is changing the face of mining in Africa?
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The document discusses the transformative impact of technological development on the mining sector in Africa, detailing trends in disruptive technologies and their potential effects on both large-scale mining (LSM) and artisanal and small-scale mining (ASM). Key drivers include economic benefits, health and safety improvements, and the need for upgraded skills in the workforce, while challenges such as job losses and regulatory issues also arise. The conclusions emphasize the need for policy reforms and stronger partnerships between mining companies and host countries to ensure sustainable benefits amidst ongoing technological changes.
How is technological development is changing the face of mining in Africa?
- 1. Secretariat hosted by Secretariat funded by HOW IS TECHNOLOGICAL DEVELOPMENT CHANGING THE FACE OF MINING IN AFRICA? Isabelle Ramdoo MAY 7th, 2019 ABIDJAN AFRICAN DEVELOPMENT BANK AND THE NORDIC AFRICA INSTITUTE POLICY DIALOGUE: OPPORTUNITIES AND CHALLENGES FOR THE EXTRACTIVE SECTOR IN AFRICA
- 2. IGF - the only global forum for the mining/ metals sector – 72 member countries
- 3. Outline of presentation I. Trends in dsrruptions and technological innovations a) Disruptive technologies: a visual taxonomy b) Key drivers of technological change c) Speed: what technologies are coming? II. What are impacts do we expect? a) Affect LSM and ASM differently b) Differ between industry and host countries c) Tech adoption differs across the mining value chain d) Spotlights : Tech impact on the future of jobs and skills development III. Conclusions: a) What are the options? More questions than answers
- 4. VISUALIZING A SMART-MINE: INTELLIGENT, DIGITAL, CONNECTED, AUTOMATED, FLEXIBLE, SUSTAINABLE Source: Natural Resources Canada, https://www.visualcapitalist.com/potential-smart-mining/
- 6. (i) Disruptive Technologies: a visual taxonomy Digitalized ecosystems - IoT - Digital twin - Augmented reality - Blockchains Automation - Software automation (machine learning); - Labour automation (autonomous assets) Connectivity - RFID/ RTLS - Cloud computing Additive manufacturing technologies - 3D/ 4D printing Machine Learning: - Advanced analytics - Predictive maintenance Efficient energy technologies - Electronic vehicles - Smart energy systems Other technologies - Biological technologies - Water neutral processing Two main features, which when combined, make current technologies unique, attractive and scary Artificial intelligence Connected systems
- 7. (ii) Key drivers (or blockers) of technological changes 1. The momentum: A global phenomenon: objective - build more intelligence into production processes between machines and between humans and machines. 2. Perceived economic benefits: innovation is driving up efficiency and driving down costs • Productivity improvement (globally mining operations are about 28% less productive now than 10 yrs ago due to declining ore grades); higher through-put; increased access to lower grade at lower costs. • Cost of development v/s return on investment (capacity to invest: large v/s small mines; gr/t and ore grade recovery v/s and lifetime of mine…) • Labour market dynamics: supply (incl demographic shift); demand (for different labour with different skills set) and labour-saving costs 3. Health and safety of workers, in particular in extreme environment. 4. Technical feasibility: type and age of mine; new frontier/ geographical location; depth of ore body (since the start of the 21st century, over 75% of new base metal discoveries have been at depths greater than 300 m). 5. Political economy: social and political acceptance; regulatory acceptance and compliance
- 8. (iii) Speed: What technologies are coming in short- to medium term? - Not all technological development will materialize. A lot of hype around some technologies (e.g. flying autonomous vehicles, but not ready yet) - Some technologies are already being adopted (autonomous assets; knowledge graphs; sensors; drones; connected wearables; Digital twin). Rapidly spreading to lower-income countries (2 – 5 yrs) - In 5 – 10 yrs (MT): We expect mining environments to be more digitalized (connected; with deeper AI) and increasingly mechanised (more autonomous assets etc) Spotlight 1: Gold Fields Tech and Innovation plans: In 2017, Gold Fields started implementing the company’s global IT Strategy, with the following timelines, in three distinct phases, namely: Horizon one (one - two years): Foundational and modernization phase Horizon two (three - seven years): Transformation to the Gold Fields Mine of the Future Horizon three (seven years +): The Gold Fields Mine of the Future Since then, the following milestones have been achieved in Africa : ü In 2017, purchased high-precision GPS drilling rigs at Tarkwa (Ghana) to improve drill efficiencies. In 2018, focus was on mine optimisation through upgrading of Tarkwa and Damang fleet management systems and exploiting drilling opportunities through use of new GPS drill rigs. Drone survey technology was also rolled out at both mines. ü Rolled out drone survey technology in West Africa for pit, waste dump and TSF surveys ü In 2018, South Deep mine (SA) upgraded its underground wireless connectivity and radio communications systems, to use technologies such as real-time vehicle telemetry, people monitoring and environmental control. The mine also uses spatial data systems, allowing visualisation & monitoring of mining plans to improve efficiencies in mining processes
- 9. II. IMPACTS
- 10. (i) Generally, affects LSM and ASM differently Impact on ASM Characteristics: - Labour-intensive, no. going up (approx 10 million working in ASM in Africa (60 million indirect); 5 times more compared to 20 yrs ago); - High level of informality and seasonality. Tech adoption may be challenging Drivers for tech adoption: - Improve production and productivity - Ability to move to medium-scale Positive impacts - Higher productivity can improve yield and production, giving ASM scale to move up the value chain - Can leapfrog investments in tech by adopting and adapting ‘older’ technologies to improve work conditions and reduce environmental footprints Challenges - Limited access to finance ➠Limited capital equipment ownership (proliferation of ’lenders’ leading to abuse) - Without proper knowledge on use of tech can exacerbate accidents and environmental damage Impact on LSM Characteristics: - Capital-intensive: difficult to predict but for some tasks, number of workers to go down; other jobs will be created. - Highly sophisticated; tech adoption quite easy but skills shortage in developing countries critical issue Drivers of tech adoption: - Problem solving - -Cost efficiency - Improved productivity Impacts (see previous section) Worth noting: - Mining value chain more sophisticated, allowing wide range of tech to be deployed – not the case for ASM - Unintended consequences of loss of jobs if no other alternatives – move to ASM sector. In last 20 yrs ASM employment has grown from 2 to 10 million in Africa. Not all related to technology, but a large part due to lack of job opportunities elsewhere in the economy (poverty driven) Question: How do we use mining technology to transform poverty-driven ASM into opportunity-driven ASM
- 11. (ii) A double-edged sword that will impact industry and host country differently Mining industry - Cost savings & improved productivity - Increased competitiveness and viability of operations - Improved health and safety of workers at mine face - Greener ecological footprint and lower greenhouse emissions - Higher production ☛ higher exports ☛ higher revenues (royalties; export) - More productive companies ☛ potentially more profitable (?) = potentially higher taxes (?) - Less fatalities ☛ better working conditions - High tech jobs ☛ higher wages for local employees - Possibility for tech spillovers to other sectors ☛ enhanced diversification - Reputational damage due to reduction in labour - Diminished public trust due to unmet expectations for jobs and procurement ☛ impact on future license renewal - Regulatory backlash ☛ more regulations (force local content) ☛ More taxes to compensate? - Social unrest at mine face affecting mine operations - Job losses due to automation; rising inequality and lack of opportunity for lower-skilled - Lower local spending on food/ housing ☛ -ve impact on local economy - Lower tax receipts from employees - Less procurement opportunities - Labour unrest ☛ political instability - Larger investments ☛ more fiscal incentives ☛ lower taxes “Shared value” paradigm at stake: How can balance be restored? Host country OpportunitiesRisks
- 12. (iii) Tech differs across mining value chain ➠ impacts will be different (1/2) Exploration Mining operations (extraction) Mining processing Logistics and Transportation Trading End-to-end Big data and connectivity Drones/ spectre imaging/ connected items Big data/ cloud computing Sensors Wearables/ connected items Big data; cloud computing Sensors/ connected wearables; Integrated drilling; Mobile decision support; big data/ cloud computing Integrated operating systems; Blockchains/ smart contracts; Big data/ cloud computing Blockchains/ smart contracts/ Integrated operating systems Remote / integrated operating centres Automation Drones (auto-pilot) Machine learning; Autonomous assets; Integrated drill/ blasts Predictive maintenance Autonomous drilling/ blasting Robots Autonomous assets Predictive maintenance Autonomous assets (trucks; trains; ports; ships) Autonomous assets (ships/ trucks/ train etc.) Integrated automation Digitalized ecosystems 3D visualization Advanced analytics systems Advanced anlytics sys Digital twin 3D simulation/ modelling Sensors/ wearables Digital twin Digital twins Machine learning Digital twins Machine learning Blockchains Digital twin Additive manufacturing technologies 3D/ 4D printing (spare parts) 3D/ 4D printing (manufacturing) Efficient energy technologies EVs; smart energy techs; EVs; smart energy techs EVs; smart energy techs EVs; smart energy techs Others (water; biotech etc) biotechnologies Water saving technologies/ biotech Water saving tech; biotech; Types of technology Countries highly dependent on extraction and mineral processing activities are most at risk from automation of operational and repetitive tasks (where bulk of labour is employed)
- 13. Tasks to be automated and mechanization Tasks to be enhanced/ modernized Tasks to be flexibilized or outsourced New tasks created due to new tech needs Automation: Truck/ train drivers; Drillers; Accountants Digitalized systems: (e.g drones): geologists Big data/ digitalized ecosystems/ automation: Data analysis Software engineers App developers Sensors/ wearables/ automated assets: Mining engineers Surveyors Geologists Supervisors Data managers Cloud computing/ blockchains/auto mation: HR managers Procurement managers Digitalized ecosystems/ big data/ automation: Tele-operators Remote controllers Examples Spotlight 2: Tech impacts on the future of jobs DirectimpactsIndirect impacts Tasks to be restructured/ redesigned Capitalization effect: new occupations and tasks to be created more broadly as a result of new tasks in mining sector; new organizational structures; changing nature of existing tasks Difficult to predict the macro-economic impacts with certainty : complex, and sometimes mutually reinforcing Disruptive technologies will have fundamental impacts on labour market in 4 ways: ✧ Number of jobs: Difficult to predict, mine and context specific. But there will be net losers and net winners. Different technologies will have different impacts; felt unevenly by skills type ✧ Alter nature of tasks: roles will be different and more tech-savvy Bet. 30 – 40% of job losses (up to 75% for operators of mining equipment like truck drivers).
- 14. Spotlight 2: Tech impact on future of jobs (2) ✧Nature of firms will evolve: mining working environment will have different organizational structures, based on more coordination and inter-dependency among inter-disciplinary teams ✧ Demand for skills will change, with higher demand for more technical/ STEM skills as well as cognitive skills. Most successful strategy will leverage the best of artificial intelligence with the best of human intelligence Main employing occupation in the mining sector
- 15. Spotlight 3: What does that mean for skills development? Future jobs will require people with skills different from the current ones: Skills development programmes will have to embrace the following shifts: q Technological shift: Skills development programmes rests on three pillars: 1. More STEM embedded academic curriculum (starting from early childhood) 2. More foundational skills that machines can’t (yet) do: complex problem solving, cognitive skills; critical thinking, creativity, communications, coordination, people’s management, emotional intelligence; 3. Facilitate dynamic life-long learning so employees keep pace with technological progress and other factors of change q Shift to new management systems: nurturing innovation and new tech requires adapting skills and capabilities of staff to better work together, away from the traditional silo-approach (separate teams responsible for different parts of vc). Collaboration, in partic among workers who have never worked together will be key. Working ecosystems will be more Interdependent and inter-disciplinary; q Generation shift: skills development programmes will need to educate existing workforce to the new world of work, through innovative training; re-training/ re-skilling important for smooth transition for new types of tasks. q Career shift: Nature of careers is changing: job and career-hopping are the ‘new normal’. Continuous training for ‘frontline’ employees in transferable skills is critical so the latter can also shift, if or when their jobs are at risk.
- 16. III. CONCLUSIONS
- 17. q Here is the dilemma: Current mining policies frameworks in most developing countries (e.g. mining codes; LCRs; fiscal incentives; mining contracts) are not necessarily fit for the future of the mine. With possibly fewer and more complex jobs and less procurement opportunities, current approaches do not address fundamental challenges facing labour market nor do they stimulate innovations in supply chain development. Expectations will rise, industry won’t be able to respond and policies will fail. q For mining industry, benefits of technological change are rather clear, but more complicated for policy makers. The trickle down effects (+ or - ) on the wider economy exacerbates impact and challenges for policy makers. PMs need to be innovative to balance investment attractiveness while at the same time, provide jobs and business opportunities for the local pop. q In rethinking how to restore the balance of benefits between the industry and the host country, partnerships between both will need to be strengthened. Concretely, it means regular interactions and commitments at highest level to anticipate and prepare for change, and find alternative and sustainable solutions, in particular in the wider economy.
- 18. What are the options? More questions than answers Question 1: Do we need a new social contract? Companies must bear in mind that while they are busy working on improving efficiency, governments on their side, are busy with the regulatory environment that is likely to evolve. Regulatory pressures might have an impact on mining license and profitability. If this is not well managed, there are significant risks for both industries and society and none of them stand to win. Question 2: What critical policy reforms/ regulatory options for governments? - What policies to address skills shortage/ mismatch/ capabilities and labour market reforms? - Will we see new local content policies? (but what is ‘local’ and ‘content’ if mines are increasingly automated?) - New tax regimes? But does higher productivity necessarily mean higher profitability? - Should governments be looking at new forms of ownership structures (like in the oil sector), so they can share production?
- 19. Question 3: What other new forms of regulations are needed? Mines are likely to be more integrated and digitalized: But what about current intellectual property right structures; cybersecurity? Question 4: How can the wider economy benefit from new tech? Can the mining technology spill over to benefit other sectors? Can we find suitable offsets in the spectrum of mining technologies to mitigate negative impacts on labour, by promoting tech sharing with other economic sectors? How can we use capabilities and knowledge developed and acquired, thanks to new tech, to foster spillovers to other productive sectors? How can we stimulate more horizontal linkages between mining infrastructures and other economic sectors, to diversify the economy and provide alternative livelihoods to those who will lose most?