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The state of digital transformation in the South African mining industry

The state of digital transformation in the South African mining industry: Ten insights into 4IR 2023 report is now available. The report provides new insights, validates existing insights from the previous report, and articulates the mining industry’s commitment to using digitalisation and technology for the ultimate creation of business value in the mining sector.

The Minerals Council South Africa, in collaboration with PwC and the Mandela Mining Precinct, launched its first study into ‘the State of Digitalisation and 4IR in SA Mining’, in 2020. The study’s findings were summarised in ten insights. These insights were globally well received and disseminated.

The 2020 Study focused on digital transformation and 4IR readiness. The 2022 study was expanded to include ESG aspects into the study to bring the industry in line with what is expected of companies in the modern world.

Below are some key insights that were identified:

Insight 1: Mining CEOs and their executives are being deliberate: In contrast to 2021, the mining CEO is focused today on innovation rather than a top-down initiative-based approach. Leaders now see Digital and 4IR as a de facto part of mining. According to the survey, 100% of respondents are making the transition to digital, including using technology for their ESG programs.

Insight 2: Technology is being applied where it has the greatest measurable benefit: Digital is providing miners with visibility and transparency of their business – it is reducing bureaucracy; and ultimately providing us with the ability to make better decisions. The major data driven decision making platforms will be maturing from 2025-2027 and are expected to challenge our assumptions around how we mine.

Insight 3: The hunt for value requires cooperation and compromise: Cost leadership, efficiency, and profitability remain the #1 concern of mining CEOs – with overall business sustainability and longevity #2..The fight for capital allocations is based on measured benefits which has been a challenge in the past for digital – digital programmes are often difficult to qualify before execution, requiring a ‘leap of faith’; and Indirect benefits are difficult to measure, as is the ability to enable future value.

Insight 4: Digital tools don’t just measure, they contribute (the union perspective): Labour unions are key stakeholders in the mining industry and have a unique perspective on the value of digital and 4IR. Two surveyed unions tell us that digital technology is essential to improve health and safety and plays a key role in communication. They also told us the greatest strength of digital is that it enables workers and provides on the job assistance.

Insight 5: The imperatives for sustainability, and the crown jewels: After seven decades of peaceful trade, the world is starting to de-globalise in 2023. Data is at the centre of business success and sustainability in this new world and data will be the most intensely managed part of the mining business over the next 10 years, because trustworthy information is needed in real-time. CEOs anticipate a shift from reactive to proactive management – which requires these new tools.

Insight 6: We are up to the challenge & have the tools we need to win: South African miners are not satisfied with the progress in digital and 4IR transformation since 2019. The CEOs agree for the most part that the past three years have spurred on the development, use, and understanding of technology in the mining space, but unanimously agree that we could have done better.

Insight 7: Mining is about people – and we need to fight globally for talent: Leadership is key, while culture can replace scarce skills. Mining needs to create an environment that attracts young talent in a world that also needs data scientists and digital natives. However we also hear about success stories where the workforce is enabled and transformed digitally over time – without importation of new skills.

Insight 8: ESG – critical for business survival or tick-box?: While “ESG” may be one of the latest buzzwords related to business and sustainability, the response to environmental, social, and governance 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. That requires a fundamental rethink in terms of the risks and opportunities presented by these drivers and the underlying system changes they demand.

Insight 9: ESG – Regulations shape ESG requirements (for better or worse): While legislation drives the responsible business agenda for our mining industry, embedding ESG into your organisation is more than just compliance – it is centred on the ability to create long-term value.

Insight 10: ESG drives long-term value: Without a blueprint or clear regulations, miners have chosen their own preferred path and reporting for ESG.  The unions argue that there is less focus on social and governance issues as larger attention is given to environmental protection, but all parties regard ESG as a path to a sustainable mining future, and digital as the means to accomplish these goals.

You can download a summary of the report here:

Ten Insights into 4IR Digitalisation and ESG for SAMI (2nd edition)

And the full report here:

23-29196 4IR Mining Report

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