Fresh management approaches, bold technological advances and firmer relationships with stakeholders are among the most vital aspects of a brighter future for mining, according to some of the industry’s most experienced consulting engineers and scientists.

“Aside from current pressure of the commodity price slump, productivity in the global mining sector is down almost 30% in the last decade,” said SRK corporate consultant Roger Dixon.

“South African mines need to move away from a dated management model if we want to address productivity in the longer term, and at the same time win the hearts of minds of employees and other stakeholders.”

Speakers at the 360⁰ Mining Perspectives seminar hosted by SRK Consulting recently in Johannesburg addressed challenges from energy costs and water constraints to social licence and the increasingly complex operating environment. A common theme, however, was that the long-awaited resource upturn was showing signs of gathering impetus, and that the sector was running out of time to prepare itself.

 

Slump outcomes

SRK global chairman Mike Armitage said that while the extended slump had thinned the ranks of the mining sector, it had left a more committed core of champions and practitioners who were taking projects forward despite the challenges.

“In the junior mining sector, for instance, there seem to be more mining people directly involved who really want to start and operate mines, rather than just trading in the value of mineral properties,” he said.

Looking at the future of the established mining industry, Dixon argued that mines must harness the power of technology to improve profitability.

“Capturing the value from digital innovations represents a fundamental shift in vision, strategy, operating model and capabilities in the mining industry,” he said. “In particular, much of the value creation in mining will shift from how well the operation moves material to how well it collects, analyses and acts on information to become more productive.”

 

Mine water

Mining was the focus of much attention regarding water usage and quality, despite consuming only of 3,3% of national demand, said SRK principal scientist Dr Andrew Wood.

This was mainly due to the legacy of mine-related water pollution in the form of acid mine drainage (AMD), and the expectation that the mining sector would soon be paying for most of the cost of remedial treatment for AMD in the Witwatersrand Basin, whilst cautioning that AMD is also a threat in parts of Mpumalanga, the Free State, KwaZulu-Natal, Limpopo and the Northern Cape,” said Wood.

He said the good news was that mining houses are aware of the challenges and are implementing AMD treatment to potable water quality, already in place in the eMalahleni area, and developing greater understanding of their Water Cycles and Water Use Optimisation, with key focus on optimising water use in the Concentrator and tailings circuits and recovery of treated sewage and process waters into operations to reduce fresh water demand.

 

Environmental concerns

Extending the environmental concerns into the broader realm of sustainability and social governance, SRK principal environmental scientist Darryll Kilian said many mining companies were still stuck in ‘compliance mode’ – placing at risk their long-term social licence to operate.

“Too often, company environmental and social management systems do not appear to be adequately funded and staffed, and are not integrated into the overall management system,” said Kilian.”

Increasingly important aspects of operation such as stakeholder engagement is frequently an ad hoc rather than a strategic function, he said.

“Many mines are consistently defensive about stakeholder relationships, insisting that relationships are good because there are no complaints,” he said, highlighting that strong links between the corporate level and operational level enhanced the integration of practice with policy.

The growing complexity of the mining environment was also addressed by SRK principal consultant Andrew van Zyl, who urged the sector to take time to understand new operating environments – especially when considering large and multi-faceted projects.

“In many parts of the world – Africa included – mining-related agreements take longer to negotiate due to lack of established regulations or codes,” said Van Zyl. “Issues of infrastructure, power, water and land need detailed discussion among stakeholders.

Now is a good time to do this; while finance is difficult to secure, companies have time to talk.”

 

Financing

On the question of financing, SRK corporate consultant Mark Noppe urged that mineral resource projects be presented in the correct context – for the benefit of all stakeholders.

“The market needs transparent, consistent and balanced views of a project’s technical confidence and development status,” said Noppe, who offered a concise framework for benchmarking projects’ progress.

“Inconsistent use of reporting definitions, supporting information, project assumptions and outcomes may be confusing and even misleading,” he said. “Confirming the correct project development context is essential for assessing the risk, opportunity, relative confidence and value associated with a resource project.”