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New tech in the mining sector: Trends and impacts

Mining is on the verge of a wave of changes like those that have swept over and redefined manufacturing, communications, finance, and other technology-transformed sectors. While this is good news in terms of productivity, worker safety, environmental impacts and other metrics, some types of technology will replace significant numbers of low- and medium-skilled workers, and many of the new jobs created will be difficult for locals to fill.

What will these changes mean for the complex relationship between mining operations, host communities, and host governments? We know that changing technologies are changing the status quo, but can we anticipate how it should change? This is the theme of our New Tech, New Deal dialogues, presented by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), Columbia Center for Sustainable Investment (CCSI) and Mining Shared Value (MSV), in partnership with the GOXI platform of the World Bank.

Over the next several weeks, our panel of experts will explore the relationship between mining companies and the communities who rely heavily on the social and economic benefits created by direct employment and employment-related procurement. We’ll dive into four key themes in turn, probing the strengths and weaknesses of different policy options and arrangements.

There are so many questions I hope we’ll address. Are we looking at a net loss of jobs? What kinds of new jobs will be created? Is skills training the answer? More local procurement? Higher taxes on mining activities? Should governments and mining companies negotiate new forms of contributions, like shared infrastructure, community development funds, increased beneficiation? What will be the impacts of new tech on women in the mining workforce? All of these questions have very different answers, of course, in different specific locations.

Our discussions here on GOXI will feed into the longer-term New Tech, New Deal project and, in particular, will inform an in-person round table to be held in Paris in late June focusing on these same issues, in effect enlarging the table to bring in a wider array of voices.

I’m excited to bring the experience and collective wisdom of the GOXI community to bear on these critical and under-explored questions. These issues demand group thinking. I hope you’ll weigh in with your thoughts over the coming weeks, helping us kickstart a discussion that is ever more urgent.

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Comment by Osvaldo Urzua on Thursday

Hi Isabelle, on you point about attracting talent, there is not single answer. For instance, in the case of Chile, there are many areas that are very attractive for young talents that are closely related to copper mining. For instance, electromobility in large fleet and the use hydrogen as fuel. Mining is providing a platform to participate in very sophisticated discussion. Something similar happens in Australia with the METS sector (Mining Equipment Technology and Services). Talents are interested in those knowledge-base companies.

Comment by Isabelle Ramdoo on Thursday

Hi Michel, great point regarding other industries: it's true that the mining industry is not the only one getting more sophisticated and that there will be a rife competition for talents. From your experience, how easy (or difficult) is it to attract talents from other industries to the mining sector, given that the latter is perceived to be less attractive. E&Y has identified this as a major risk in its Top10 risks for 2019-20. I was wondering if in Canada (or elsewhere) the mining sector was more disadvantaged than others. 

Regarding the social impact, I think the major challenge will be to manage the transition, in particular in lower-income countries, where those who are likely to be the most affected are lower-skilled and older (generally likely to be more impacted by unemployment). While there will be opportunities, those who might loose their jobs might not be the ones who will take the new opportunities due to (i) skills mismatch; (ii) the location of new opportunities. Also, countries over-dependent on the mining industry might have fewer alternatives to offer to those who will lose out. This transition is a potential social bomb for the industry and for the community.

Comment by Michel Jebrak on Thursday

The transformation of the mining industry is already on stream. In Canada, several mines (deep, dangerous...) are more and more automated.

It is changing the structure of the workforce: less people, more educated workers, better security, and better efficacity (that is the main resaon for automation!)

It has two consequences that are not always considered:

(1) Mining jobs are less and less specific: a 4.0 mine is similar to a 4.0 plant. Therefore, the migration of people from one industrial sector to another are more easy. The shortage of specialists appears only in a closed mining world. Recent observations in Quebec shows that people form the computer industry, mechanical or even spatial idustry may come to the resource industry. It is therefore a normalisation process. It will allows people to re-enter easily in other domain after the closure of the mine.

(2) Not all deposit are able to be mechanized: they need to be consistant, with high returns on investment that allows to spend more in technology. Some deposits displays too much variation to be predictible at that level. Therefore, these deposits will be probably mine by old faschion methods, includind ASM or semi-mechanized exploitation

The social impact needs more evaluations because it is not all negative. The luddite fear is an oversimplification. And the cinetic of this transformation process is very important. The school system in mining provinces will require some adaptations and the sooner the better.

Comment by Aaron Cosbey on Thursday

Jed – great questions. Actually, they’re a nice segue into the topics we’ll open in the coming weeks, where we’ll look at specific types of practices that have been suggested for businesses dealing directly with local communities. But also of course for governments regulating how that relation plays out; most resource-rich countries spell out their performance expectations in law or contracts with mining companies – whether in terms of requirements for agreements with host communities like the Canadian Impact Benefit Agreements, or in terms of specified mandates for local hiring or procurement. So next week, for example, we’ll ask whether local content policies like boosting local procurement, or mandating more downstream processing, can help address lost local jobs.

 

Jobs are at the heart of the matter. In the course of our research we’ve seen a handful of examples of new mines, or newly re-commissioned mines, projected to be running with a fraction of the workforce that would be expected under conventional technology. But the evidence base is thin, and it’s of course different from one operation to another. Anyone out there seeing evidence on the ground? Are jobs being lost? What kinds of new jobs are being created? Are locals filling them?

Comment by Jed Miller on Wednesday

Hi Aaron and colleagues. A question for you: Amid these rapid technological shifts, how can stakeholders level the playing field between affected communities and the private sector and government actors in any mining project? What about when local communities make deals directly with companies, instead of being dependent on terms set at the federal government level with those companies?

The Columbia Center for Sustainable Development, who are also project partners in these dialogues, recently published guides on community/investor contracts. CCSI writes that:

Communities may welcome investors on their lands because of the promise of local job creation. Yet some agreements do not have requirements or quotas for jobs to be undertaken by community members. Other agreements require the company to employ nationals of the country but not necessarily local community members. Community members may therefore be upset to discover that they are unable to get a job with the company, yet still have to bear the project’s negative environmental, social, and human rights impacts.


What are the best practices companies should consider when dealing directly with local communities—and vice versa? 

Comment by Osvaldo Urzua on Tuesday

Although it is obvious, it is important to mention at the beginning of this dialogue that technological change is unavoidable and therefore the transition to a digital and automated mine is not an option. Identifying and understanding what are the enabling conditions to succeed this transition and how this condition can be created is a key outcome that I expect of this dialogue.

A key element required to have an informed debate is the forecast of workforce and structure of the supply chain of the future. For instance, what is the difference between a mine that use a person-driven fleet of trucks, compared to a mine with autonomous fleet of trucks. Just for this particular process (transport), the change in the composition of the workforce would probably impact all level of skilled worker, i.e., low- medium- and high-skilled workers.  

Possibly, this kind of forecast is a public goods required in mining economies, in particular in those with low level of diversification.

Comment by Isabelle Ramdoo on May 13, 2019 at 18:46

Advances in technological change in the mining industry are an integral part of the 4th industrial revolution, which is leading to more efforts towards the automation of certain tasks and production processes and is bringing the application of intelligent networks across the entire mining value chain. Mining operations are becoming smarter, leaner, more efficient, more flexible labour-wise, and arguably more sustainable.

While this is nothing new, what is different today, is that the type and pace of change is occurring at a speed and scale never seen before. Therefore, we expect fundamental changes in the way mines operate; and in the way people live, work and relate to machines and their workplace.

But above all, we expect a fundamental transformation in the relationships between the industry (mining, their suppliers; tech providers) and between the mining industry and host countries (governments, local communities, other non-state actors etc).

Only a handful of business leaders or governments are able to foresee and understand the extent of opportunities and challenges that such systemic changes are likely to bring and hence prepare themselves in a strategic manner to embrace these changes and manage the impacts.

Adding to your questions, Aaron, are the current institutions and policies in place fit for those changes? If not how can they be adapted and modernized?

Similarly, how can the industry rethink its engagements with host communities in developing countries, if the number of jobs or business opportunities go down drastically? How to manage expectations and transitions? What does that mean for the 'social license to operate', if the very essence of what makes 'social acceptance' viable (i.e jobs), suddenly fade away? Could we think of different and more innovative forms of engagements, including by stepping up partnerships with other economic actors? 

Can we have some examples of how mining industries have managed those changes, and how challenges have successfully been mitigated and turned into opportunities? Anyone out there?

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