The Mining Industry’s Generation of Something New

LAGOS (Capital Markets in Africa) – A few years after this century’s commodity boom, which was primarily driven by China’s resource-intensive manufacturing and infrastructure sectors, many segments within the global mining industry are facing challenges that have caused severe price declines, increased volatility and lowered utilization levels. To add to this, the current value-chain is being challenged by macroeconomic conditions and increasingly pervasive new technology. As a matter of fact, the digital transformation of mining companies is expected to persist indefinitely and as a result, define the mining industry’s new normal.

Conventional mining requires extortionate fixed – asset operations and machinery, the maintenance and depreciable life of which can substantially impact production output, operating costs and ongoing capital expenditure. In order to move beyond stagnant growth and deliver exceptional shareholder, customer, and safety value, mining companies are increasing the utilization of automation, robots and operational software.

Previously, automated hardware was restricted to carrying out specific tasks it had been programme – ed to do. In recent years, robots and machinery have been modified to perform tasks with a high degree of autonomy, working for extended periods without human intervention. According to a recent report by Markets and Markets Research Private Ltd, the technology trends in autonomous operations and robotics technology are expected to provide substantial value to the mining industry and its stakeholders, and ultimately, create a mining automation market worth over USD 3.29 billion by 2023.

In addition, the adoption of mining automation in various mineral ore sites has increased the number of strategic partnerships between mining automation equipment vendors and other communication system providers. For instance, in June 2016, BHP Billiton Ltd awarded a contract to Atlas Copco AB (Sweden) for the autonomous upgrade of 18 drill rigs. Similarly, Calibre Group has completed the first autonomous train deliveries across Rio Tinto’s Pilbara mining operations, establishing the world’s first automated heavy locomotives that haul ore hundred of miles to port terminals. Rio Tinto’s automated operations in Australia are reportedly intended to preview a more efficient future for all its mining operations and reduce the need for human miners. Meanwhile in Africa, joint venture partners Rand Resources and AngloGold Resources have automated the Kibali operations in the Democratic Republic of Congo to the extent that remote operators function underground from safe air-conditioned cubicles, while managing the loaders on the open stopes of the underground operation that descends close to 800 meters below surface into a massive orebody.

An extract from the INTO AFRICA July 2019 Edition: Trading Africa’s Prosperity. The article is written by Itumeleng Mukhovha, Corporate M&A Associate, Baker McKenzie South Africa. To read the full article, please download by clicking: INTO AFRICA PUBLICATION: July 2019 EDITION.

Itumeleng Mukhovha is a Corporate M&A Attorney at Baker McKenzie, Johannesburg, a Global Shaper of the World Economic Forum, a writer and a philanthropist who is making positive contributions in disadvantaged communities in South Africa. She was listed as one of the Top 200 Outstanding Young South Africans in 2018 by Mail and Guardian; and was included on Avance Media’s list of the Top 100 Most Influential Young South Africans, also in 2018.