In keeping with its 2024 theme, ‘Embracing the power of positive disruption: A bold new future for African mining’, the Investing in African Mining Indaba is perhaps one of the best examples of embracing change without compromising on vision or long-term sustainability.

The event’s evolution over the last 30 years demonstrates that incorporating new ideas and adapting to changing needs is key to staying relevant, and its 2024 programme seeks to spark similar interventions within the African mining industry.

Event organiser Hyve Group’s Mining Indaba content head Laura Cornish comments that the industry and its stakeholders are “conventional in their approach to change and innovation and early adopters are few and far between”.

She stresses, however, that the Indaba is trying to address this trend towards conventionality through its ‘disruption’ theme and discussions aimed at “pushing stakeholders beyond their comfort zones to participate in uncomfortable conversations about real challenges in the industry”.

Given the theme, a significant percentage of those uncomfortable conversations will revolve around the future of work, the incorporation of artificial intelligence (AI) and new technologies, new business models and paradigms, and the effects of geopolitical instability on mining activity, economic growth and investment.

Regarding the geopolitical situation, professional services firm Deloitte Africa’s energy, resources and industrial leader, Louis Kruger, notes that high global inflation – which has resulted in higher interest rates and lower demand for some metals and is being driven by, among other factors, slower growth in China – has exerted downward pressure on some commodity prices in the short term.

Hyve Group global natural resources portfolio director Eve Harper agrees, adding that the weaker commodity prices have resulted in “a lot of production cutbacks and restructuring activity”.

However, she adds that the industry, being cyclical, “always recovers” and often uses quiet periods to “become more financially and operationally streamlined”.

Kruger concurs, noting that, in the short term, lower commodity prices will “force companies to continue to look at cost and efficiency to drive profitability”, but he highlights that interest in Africa’s minerals for the energy transition will continue for the foreseeable future.

“The global energy transition will drive significant demand in the medium to long term for specific metals. African countries have significant potential to capitalise on this shift in demand but will need to ensure clear, transparent and consistent policy, and a stable regulatory environment to attract investment.”

Even though disruption in the global energy industry has many positive connotations and outcomes for battery and critical metals producers, it will also require “uncomfortable conversations” about the future of coal, as well as how to balance the African continent’s need for reliable electricity supply with the somewhat lofty net-zero ambitions of the energy transition.

Yet, these conversations must happen because the mining and energy industries are being disrupted regardless. Moreover, Cornish stresses that, “if Africa wants to be recognised as a globally competitive continent, it must disrupt its outdated thinking and evolve”.

Meanwhile, professional services firm EY Africa AI and advanced analytics leader Kavi Pather explains that true disruption has significant and transformative impacts and does not necessarily speak to established entities experimenting with new ideas and technologies.

He explains that Clayton Christensen’s theory of ‘disruptive innovation’ “emphasises the role of technological advancement and customer preferences in reshaping industries”.

“It’s about new entrants and new business models, not just about incumbents adopting new technology,” Pather avers.

Therefore, while companies ponder the benefits and implications of disruptive technologies, they should also examine how the evolution and transformation of mining may affect their role and position within the industry.

Tricky Tech

While, as Pather notes, technology adoption is not the be-all and end-all of disruption, it is one of the more accessible facets of harnessing disruption. Further, many mining companies are employing disruptive technologies to boost efficiencies and improve their margins.

As Cornish notes, “the mining industry has embraced technology, largely since Covid-19”, but, to date, technology implementation has been “limited to basic adoption”.

“New technologies are emerging almost daily that can have far larger impacts on the operational performance of the mines, and we need to disrupt conventional technology adoption to push the mining sector into a different league of performance and delivery,” she says, adding that the Indaba is looking to expand on this topic through its technology programme.

Kruger adds that technological advances in terms of operational technology, Internet of Things (IoT) devices and increased computing power are enabling mining companies to augment decision-making on numerous fronts, thereby enabling better decisions, while advanced analytics and machine learning are “making predictive maintenance a reality”.

He notes that these advances contribute to better efficiency and improved safety performance.

However, even if the adoption and implementation of these technologies are somewhat limited in terms of their actual scope, cybersecurity risks are numerous and multifaceted.

EY Western Cape consulting and cybersecurity leader Candice Wilson notes that mining companies have experienced “a surge in cyberattacks in recent years”, placing cybersecurity firmly in the top five risks.

She notes that, while cybersecurity is a risk for all companies, it is particularly heightened for mining companies.

Firstly, geopolitical tensions – such as those emanating from the wars in Ukraine and the Middle East – have raised threats against many sectors, particularly industrial sectors like mining.

“EY’s Global Information Security Survey highlights that 71% of mining companies experienced an increase in disruptive cyberattacks in the last 12 months.”

Further, she notes that the convergence of information technology (IT) and operational technology (OT) in mining operations “increases the attack surface”.

“Mining companies operate in a digital, interconnected landscape with an increasing convergence of IT with OT systems. This convergence yields numerous benefits in improved efficiency, quality and productivity. But increased convergence also increases cyber risk where every connected asset represents another node and potential point of attack.”

Additionally, Wilson notes that less mature OT security creates a weak point, as traditionally, OT environments have been managed by operations functions rather than IT, with an emphasis on productivity and uptime, and therefore “a reticence to apply patches, conduct invasive testing and restrict access”.

She notes that this emphasis, coupled with the inherent differences in how OT security works, means that “OT environments tend to be less mature when it comes to cybersecurity”.

This scenario is exacerbated by the “scarcity of cybersecurity skills, especially in IoT and OT”.

Kruger echoes Wilson’s observation, adding that “Deloitte has conducted several penetration tests and assessments in the mining sector and, in all cases, we were able to gain domain administrator access within the first day or two of testing, and OT access from the IT environment soon followed”.

Consequently, Wilson suggests that mining companies align their cybersecurity strategy and governance structure to company priorities, ensuring that accountability is embedded at the board level. Further, mines should understand their top cyber-risk scenarios and ensure that they implement effective controls. They should also conduct regular cyber testing and deep dive into OT security controls.

Finally, mines should implement an operating model for cybersecurity that addresses the skills shortages, as well as conflicting priorities between IT and OT functions. This should incorporate the full ecosystem of third parties across the supply chain.

Kruger, meanwhile, cautions that initiating, expanding and sustaining an in-house cyber function is a costly affair that requires between 10% and 12% of the IT budget at inception to about 7% to 9% in steady state.

“This is simply not affordable for many companies, and the strategy becomes one of a few key individuals supporting a basket of technology-centric outsourced providers, typically systems integrators. This approach, while addressing the immediate technology operational requirements, does not typically address enterprise architecture, strategy and business alignment.”

He therefore suggests that miners partner with end-to-end service providers that can address the “complex, dynamic requirements of a modern mining operation”.

Disrupting Work

Cornish notes that, while the Indaba’s disruptive focus is on positive outcomes, “there are some perceived negative outcomes to disruption”. “Technology may directly impact on traditional operating methods on site,” she notes, however, it also “enables the creation of more mines that previously may have been considered unviable. It also offers the opportunity for upskilling”.

Pather points to the “overwhelming evidence that new technology creates more jobs than it destroys in the long term”.

“But let’s be real – there will be job disruptions and an effect on how those jobs are distributed,” Pather remarks. “How quickly the technology becomes mainstream will determine how painful the effect will be. But the positive is that AI can and does change the ‘skill premium’ by improving the value of less skilled workers.”

He states that AI expands the pool of workers, improves labour income and could potentially reduce inequality, “whichis particularly interesting in a South African context”.

However, the fact that technological disruption can stave off industrial decline, potentially reduce inequality and create new jobs in the long term is scant comfort to people in the here and now, and so Kruger suggests that companies focus on “better preparing for the transition and better enabling it” to avoid the negative elements outweighing the perceived benefits.

“Companies should take a long-term view, applying strategic workforce planning, taking a view on future demands and identifying future skills shortfalls and accelerate investments in training. This should include reskilling of the current workforce where work is changing. Further, the private sector and governments should continue to collaborate to build educational facilities and systems to generate the required skills,” he avers.

Cornish also champions increased collaboration between government and mining companies, not only for the potential benefits from a skills development perspective, but in terms of creating an enabling environment to enhance the mining industry’s economic contribution to gross domestic product.

“The mining industry and government operate in isolation, and this often leads to frustrations and a lack of investment. This traditional modus operandi needs to be disrupted,” says Cornish, adding that “mindsets need to be disrupted, so that decisions consider benefits at a country and continent level, and not merely on a company or government level”.

Given the continent’s mineral wealth and the potential benefits that can arise from embracing technological disruption in a practical and people-centric manner, African mining industries are well-positioned to capitalise on disruption in other sectors, even while navigating the impacts of macroeconomic factors beyond their control.

Yet again, the industry can take its cue from the Mining Indaba, with Harper stating that, “regardless of the current challenging situation, Hyve is seeing a significant uptake in support for our event in 2024 – demonstrating the value our customers derive from our offering.