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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 Aaron Cosbey on May 24, 2019 at 16:36

Really good input from Hugh Thompson and Michel Jebrak. On Michel's point about the uses of the rich data coming from the mine of the future, and at the risk of going slightly off topic, I've heard it suggested that one such use is supporting governments' efforts to stem base erosion and profit shifting. The more the tax authorities know about exactly what is being shipped out of the processing facility, the better able they are to assess whether declared value of exports is accurate. See this Deloitte report on the future of tax in mining. Of course, the prospect of a mining company allowing anyone access to its operational data is a bit daunting, and this comes back to Michel's original point.

Comment by Michel Jebrak on May 24, 2019 at 14:28

Coming back to the topic of the discussion, I think that a key point of the mine of the future will be the way to increase e-communications between mines and communities. 

One of the great potential for mine 4.0 is the hability to monitor the situation of the mine 24/7, and to share some of these informations with the population: how is the mine running, how are the impacts to the environment. It has the hability to increase transparency and confidence between the stakeholders.

But for such a goal, translation processes have to be developped.you cannot give such technical information directly. Government has been trying to publish national statistics, but few people are able to read and understand them. It is the same challenge for mining the mining data. This is like a new job to be develop, translation of real time mining sensors in understandable informations for both the mining management and the community. 

Comment by Hugh Thompson on May 24, 2019 at 2:10

Hi All - I've been meaning to get to this.....

Mining has always been an adopter of technology and change agent.
To understand the future impacts, I'd suggest to look to the 'recent past' examples.
One example is what happened in the South African underground gold and diamond mines since mid-1990's, and their struggle with mechanisation.
Luke comments on part of this, but also was the initial instance of those mines being very unproductive compared to their peers.
Finland and Sweden are interesting in this sense. Historically very strong mining operations countries. These died as globally competition caught them. But now are very much at the centre of mining technology advances globally.  Note the support in these countries for education of technicians and tradesman.  

The high job transition technologies (eg. mine haul truck automation - AHS) need a range of factors to be present, or absent, to be implemented.  Thats why - for example - there is only 1 AHS operation in Chile, despite the fact that Chile was the proving ground for AHS in 2000's.  And is a strong mining country.   Current AHS sites are in places like Australia and USA, and Chile. Next planned sites for AHS are Australia, USA, Chile (very likely) , Brasil (probable) & Canada (maybe).  I really doubt the mining industry will install AHS outside this group of countries - on a large scale - before 2040.   And thats' not because of the technology per se.

Different technologies have different impacts in mining. Most new technologies are not really labour saving per se, but aimed at cost reduction in the equipment or enhancing mineral recovery.
This, actually, has always been the case - and will continue to be. The real impact of this is that economic cut-off is lowered. So that either lower quality or more expensive deposits can be mined. Which would tend to increase total employment in the sector.  This links to the re-commissioning mention below.  (again, a theme seen before in mining, always prompted by technology advances)
As an industry, the cut-off grade for Gold mines is now half what it was in @1985. Copper and Fe are also significantly reduced.   It can also be argued that this (change in economics) may mean that more money is then available for distribution.  Remember that, as some here point out, there is now a wider range of ways a mining company needs to spend its' money as well.

I agree with a point by Michel Jebrak - what we are seeing in mining now is that the new jobs that are being added, are less 'mining centric'. These jobs get fostered / incubated in mining, but quickly migrate to other industries.  eg. AI control, machine learning, large scale & real-time data analysis, remote operations etc.  Thats great.  

Regards Isabelle' mention of scarcity of talent / attractiveness.
1) has always been this problem in mining. There are outreach programs looking to show mining as an attractive career option. But its' not an easy sell. 
2) This is a reason why tech doesn't get implemented at times. That is, can't be supported.
3) is mining more disadvantaged? Compared to some industries (finance / education / arts & entertainment), then "yes".  But our problems are shared with, say, agriculture, defence and infrastructure.

Comment by Aaron Cosbey on May 19, 2019 at 0:17

Thanks Luke, for those insights.  I hope you'll come back to the question of the role of mining companies in community development efforts when we get to that issue in week four of the discussions (starting June 3). I'm intensely curious as to how community development efforts like Anglo's work in Limpopo are working in practice, and whether they are scalable.

Comment by Luke Viljoen on May 18, 2019 at 3:42

Aaron and Isabelle:  The social licence to operate will continue to be major themes for future mines regardless of the adoption of future tech. The crucial issue I think, is to ensure that there is good communication and transparency between all stakeholders, namely the government, extractive industry, and communities regarding who is responsible for what aspects of local development as the model changes. In essence - building trust and keeping communication channels open are key.

I remember visiting Lonmin mine in South Africa a year after the Marikana massacre and seeing the living conditions of mine workers in neighboring communities. A lot of the discontent leading to the protests can be attributed to the inaction of both the mine and government. The mine failed to meet their CSR promises to the community, and the government failed to invest tax revenue into the community for even basic infrastructure such as water and sanitation. If we take away local employment from the picture due to future tech, mining companies will have to play a larger role in ensuring community needs are met. 

Isabelle: I think the sharing of infrastructure is a great method to help foster local economic activity. While necessary for their operations, FQM in Zambia has invested heavily on national road and power infrastructure.

Comment by Osvaldo Urzua on May 17, 2019 at 23:33

Rene, My impression is that Social License to Operate (SLO) requires to be updated for quite a while now. For instance SLO still refers to transactional relationship, which is part of the challenge that needs to be addressed. Probably the long commodity price boom postponed to advance in that direction.

I have been working in a new approach to deliver sustainable value, this is through a Safe, Smart, Inclusive and Green Mining through collective action.   

Comment by Rene Roger Tissot on May 17, 2019 at 21:54

I would like to join the discussion although my experience is in oil/gas. It seems (see Heffron et al The emergence of the ‘social license to operate’ in the extractive industries? 2017) that in some cases even with the promise of large social investments and jobs, communities are just rejecting the presence of EI companies (oil, mining). why? Perhaps after more than 20 years, the SLO concept its due for an update. Also, if technology will further de-link the already tenuous relationship between industrial mining and communities, the expected technical revolution could lead back to enclave activities, and  further erode by local communities to IM. Moreover, how this technology would impact small mining activities? interestingly some research appears to suggest that ASM has more impact on poverty reduction than IM. So, the question for host countries in Latin America or Sub-Sahara Africa is: if IM (because of market competition and low commodity prices) offers only meagre tax revenues, declining jobs prospects, increasing social tensions and potential environmental damages, what is in it for them? If rents were high enough, as in oil, governments would be tempted to look at different nationalization mechanisms to maximize its capture. This of course poses a hole new set of problems.  My point:are host countries properly assessing the value addition of IM in light of these technological changes?

Comment by Osvaldo Urzua on May 17, 2019 at 20:25
Hi Aaron, your make an important point. The social Licence scope is getting larger. There is a very diverse group of stakeholders whose acceptance level can impact a mining project. This group of stakeholders exist at local, regional, national and international levels and might have different interests! Possibly the Social Licence approach is a bit outdated
Comment by Isabelle Ramdoo on May 17, 2019 at 19:38

Hi @Audrey - please do :-) You are most welcomed!

Luke and Aaron: to add to your points on fewer community issues with new high-tech mines. I think as long as mining operations will happen close to local communities, there will be expectations that the mine will provide economic opportunities - and not just jobs by the way, but also procurement of goods and services, which will also become scarcer or will be different, if the mines become more automated (fewer jobs = arguably fewer employment related procurement; increased OEM contracts; etc). 

One of the questions therefore is: if the mine can no longer provide 'traditional' economic opportunities, are they willing or able to provide/ share some of their infrastructure and/or technological know-how with the community, to develop other economic activities? Renewable energy is potentially one of them; water saving technologies is another one; unmanned aerial vehicles to improve agri productivity could be another one. What will the 'CSR of the future' look like, so it can provide some offsets to the current traditional forms of economic opportunities?

Do some of you have practical examples of such offsets? Have any local community benefited from technology as a way to promote diversification?

Comment by Audrey Cash on May 17, 2019 at 19:05

Hello,

I would like to join the discussion.

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