GOXI

sharing in governance of extractive industries

Automation in Mining: Potential for Local Discontent

(excerpt from an unpublished paper: Mining at the Crossroads of Law and Development: A review of labor-related local content provisions in Africa's mining laws through the prism of automation.” – Nneoma V. Nwogu

Automation in mining is the substantive reduction and potential elimination of human labor from day to day mining operations.  Research, development and use of automated machinery in isolated components of mining equipment and machinery has always been a part of the industrialization process but the potential for full automation began to appear more vigorously in publications in the late 1990s to 2000s largely in response to the environmental hazards generated by mining activity and the alignment of environmental protection and development objectives by the 1992 Rio Conference on Environment and Development.[1]    

While debates around the potential automation-induced social destabilization in the mineral development sector has intensified,[2] studies on the exact impact on labor is still nascent.

“While there is not enough research into the impacts of automation on the size of the mining workforce, we have two broad estimates on which to base our scenarios. McNab et al. (2013) suggest that introducing fully autonomous equipment “would reduce the workforce of a typical open-cut, iron-ore mine by approximately 30 to 40 per cent.” In another report, Accenture (2010) evaluates the economics of three types of equipment (trucks, dozers and drills), suggesting that automation could reduce the number of operators in open pit mines by up to 75 per cent.”[3]

The impact of automation extends beyond the mineral development sector “as the boundary between automable and non-automable jobs advances across economic the landscape” and will likely result in “unemployment creeping up, downward pressure on the wages of more and more professions and increasing rewards for the fewer and fewer that can’t yet be automated…the transition will be tumultuous” [4]

While this is a global phenomenon, the impact on the African mineral development sector may prove unique and arguably more devastating on the economies of African countries.[5]  Africa is only beginning to view mining through a broader development-oriented lens that can help address future unemployment and over 23 countries have enacted laws to effect such a strategy following the 2009 adoption of the African Mining Vision by the Africa Union. However, these new laws do not contemplate automation. More specifically, addressing youth unemployment is a critical part of the development strategies of many African countries[6]  driven by the social challenges posed by the current youth unemployment rates of 60%[7]  and heightened by a forward-looking strategy that aims to facilitate a demographic dividend phase for the continent. While African governments are utilizing the mining legislation as one of means for responding to the domestic pressure to address employment, the mining industry is rapidly changing, putting into question, the potential for these mining laws to catalyze substantive increase in local job creation.

As noted earlier, automation trends suggest a gradual decrease in labor that will be supported by cost savings and safety justifications. This is evidenced by recent reporting on the retrenchment of 8500 employees in South Africa, where a mining company explained that the justification for the retrenchment included rising input cost while adding that the company recorded “the third successive quarter free of fatalities for the first time in its history, including 39 days in ultra-deep South African gold mines.”[8] Contextualizing the decision is a master agreement signed by the company a few years earlier to develop automated technologies to address the most difficult, “costly and dangerous mining activities” that will also increase “productivity and efficiency”.[9]  

Increased productivity, mitigation and potential elimination of environmental and human related hazards, and lower cost of inputs are valid objectives that should find support from all mining stakeholders. The rallying point must be one in which these objectives align with development strategies and legislation that may veer from ensuring local employment by mining companies to a broader notion of citizen benefits from mineral development. To do so, African countries will need to engage in a reframing of local content as it applies to employment. 

Can we think of ways to reframe Local Content in the Age of Automation?

(excerpt from an unpublished paper: Mining at the Crossroads of Law and Development: A review of labor-related local content provisions in Africa's mining laws through the prism of automation.” – Nneoma V. Nwogu 

[1] Hester, R.E, Harrison R.M, ‘Green Coal Mining’ in ‘Mining and its Environmental Impact: Issues in Environmental Science and Technology’ Royal Society of Chemistry, Oct. 31, 2007 argues that “automation of the overall production cycle should permit increased equipment utilization, improved product quality, allow quasi-continuous operation, and reduce manpower requirements and hazards”) citing A.T. Shaw, ‘Moving Towards the Integrated Face’, Colliery Guardian, September 1992, 192-196; See also O’Shea J, Polis M. ‘Automation in mining Mineral and Metal processing: Proceedings of the 3rd IFAC Symposium,’ Montreal, Canada, August 18-20, 1980.

[2] Crouch David. ‘Descent of the Machines: Volvo’s robot mining trucks get rolling,’ The Guardian, May 29, 2016; Norton Andrew, ‘Automation will end the dream of rapid economic growth for poorer countries’ The Guardian, September 20, 2016; Simonite Tom, Mining 24 Hours a Day with Robots, MIT Technology Review, December 28, 2016; Balch Oliver, ‘Automated mining will cost jobs and tax income: it’s time for governments to act, The Guardian, January 17, 2017; ‘Goodman Peter, S. ‘The Robots Are Coming, and Sweden is Fine, The New York Times. December 27, 2017

[3] Cosbey Aaron, et al. ‘Mining a Mirage? Reassessing the shared-value paradigm in light of the technological advances of the mining sector’ International Institute for Sustainable Development, September 2016.

[4] Pedro Domingos, The Master Algorithm: How the Quest for the Ultimate Learning machine will Remake Our World. Pg, 278

[5] Balch Oliver, ‘Automated mining will cost jobs and tax income: it’s time for governments to act, The Guardian, January 17, 2017, arguing that “It’s not just local jobs that might go. Local procurement in poor countries could dramatically reduce too. Based on data from two multinational mining companies, the report’s authors calculate that large mine operators in low-income countries spend about one fifth (21%) of their procurement locally. For OECD countries, that figure is closer to 91%.” See also Cosbey Aaron, et al. ‘Mining a Mirage? Reassessing the shared-value paradigm in light of the technological advances of the mining sector’ International Institute for Sustainable Development, September 2016, p.ix (arguing that (“at first blush, several factors seem to indicate that the effects will be more significant in developed countries, since baseline local procurement is higher there, as are personal income taxes, and since labour-saving technologies will be more quickly deployed where wages are highest. That said, there are reasons to believe that developing countries will feel the impacts more strongly, since more of them are over-dependent on the extractives sector, since adapting to change demands financial and technical capacity that many developing country governments lack, and in light of the expected shift from low-skills to high-skills jobs.”),

[6] See African Development Bank country strategy papers, https://www.afdb.org/en/documents/project-operations/country-strate...; See also World Bank country strategy papers, http://www.worldbank.org/en/projects-operations/country-strategies#3;

[7] ILO publication (2007). Youth in Crisis: Coming of Age in the 21st Century. See also, A. Cyril Awogbenle and K. Chijioke Iwuamadi, ‘Youth Unemployment: Entrepreneurship development program as an intervention mechanism,’ African Journal of Business Management, Vol. 4(6), pp 831-835, June 2010, p. 831.

[8] Dineo Faku. ‘Gold miner AngloGold incurs a loss of $93million in the last six months,’ Business Report, August 22 August 2017.

[9]Anglo American. (2013, September 11). Robotics for safer mining: A ground-breaking partnership. Retrieved from http://southafrica.angloamerican.com/our-stories/robotics-for-safer...

Views: 290

Add a Comment

You need to be a member of GOXI to add comments!

Join GOXI

Comment by Enkhjin Munkhjargal on March 26, 2018 at 19:16

It is a part of the 4th industrial revolution, and it is not just mining that is being affected by automation. Having worked in operations and planning, I am sure it will greatly improve efficiency, on which the mining industry has been lagging since the demand boom in 2000s, productivity, and most importantly safety. However, employment related challenges needs to be carefully managed when introducing mining automation.

Comment by Roy Jakola on March 20, 2018 at 2:24

The training gap is certainly going to become a bigger problem with the development of machine learning, and digitization in general, however the whole world is also dealing with these technology changes. Mining will be pulled along and adding value along the way.

Comment by Jeff Geipel on March 20, 2018 at 1:18

A timely and needed note of caution here, given all the buzz around automation and new technologies in mining. The more advanced the technologies get that are used in mining, the greater the challenge will be for education systems in low-income countries to provide the skills required to utilize them. Improving safety is paramount, but the mining sector cannot expect to open operations in developing countries using mostly expatriate workers and imported goods and services, and expect that host country citizens and governments will be welcoming. 

Comment by Jim Bennett on March 19, 2018 at 22:09

Thanks for bringing up this topic! Automation based on the digital transformation of production and the use of artificial intelligence (AI) to guide exploration and exploitation of natural resources is a big challenge to governments, private sector and civil society alike. Robotic miners / diggers and driverless trucks are only a few of the more visible options that many mining companies may adopt in the near future. Decisions to conduct mineral resource exploration and exploitation will depend more and more on economic forecasts based on AI using big data and deep learning. Digital transformation may disrupt production as well as capital and labor markets worldwide, not only in mining, and not only to the benefit of local populations. The uncertainty of mining outcomes will increase. The risk of local and global polarisation of human development outcomes is also great, driven by increasing gaps between global value chains and global wealth chains. Few governments can realistically expect to meet these challenges alone. But how many of them have even started to address these issues with local non-state actors and international partners? I would like to hear of some examples, whether they are best or worst practices.

Comment by Roy Jakola on March 17, 2018 at 21:22
Mining has evolved from an early era of pick and shovel where there was little true regard for safety and the environment. The industry has come a long way to becoming a part of a caring society. Ultimately mining has to become as safe as your living room and leave the environment as pristine as it was before it arrived.
This evolution will include taking the operator away from the dangers of the critical work face. In its place mining offers technology and this will translate to good paying highly skilled jobs. It’s a great trade-off for the labour intensive, difficult and unsafe period of times long past.

Conveners

           GOXI Partners

Translate

Videos

  • Add Videos
  • View All

© 2018   Created by Kobina Aidoo.   Powered by

Badges  |  Report an Issue  |  Terms of Service