Mechanise or die out, Chamber of Mines warns

(Netwerk24)
(Netwerk24)

Cape Town – If the mining industry sticks to its conventional extraction methods the industry could die out almost completely by 2033, said Chamber of Mines vice-president Neal Froneman at the Mining Indaba. 

At a media conference held on the sidelines of the 2017 Mining Indaba on Wednesday Froneman, also CEO of Sibanye Gold, said with conventional mining methods the industry will see a sharp decline in gold production by 2019/20 and may become extinct 13 years later. 

However, this dire outlook for mining changes radically when mechanisation becomes part of the equation. 

“Work done to date,” Froneman said, “indicates that mechanisation significantly extends mine life, preserves mining employment, improves safety and health, and allows mining of lower-grade ore bodies and deeper resources.”

Mechanisation also creates an environment conducive to 24/7 operations until 2045 and beyond in the gold sector, higher skills utilisation and job preservation. 

The industry has set a milestone for the implementation of a cyclical drill and blast suite of equipment that mechanises all activities in the stoping (the process of extracting ore or minerals from an underground mine, leaving behind an open space known as a stope) and development cycle, including remotely operated equipment, Froneman said.

READ: SA needs mindshift about artisans 

With new equipment, which allows the conventional drill, blast and clean cycle of working, work can be done 24/7 by miners skilled in the use of remotely controlled equipment from safe, healthy sites.

If this process of introducing new technology and the manufacture of high-tech, robust and specialised mining equipment is to be achieved, then industry, manufacturers, researchers and developers will need to collaborate to the full, sharing their knowledge and skills for a common good. 

“The process cannot be completed overnight, so we have to prepare for a staged approach that may differ in the gold and platinum group metal (PGM) sectors,” Froneman said. 

Froneman said contrary to popular perceptions that are sometimes expressed, he has “no doubts” that technology will create a substantial number of sustainable jobs and more than offset the inevitable continuing decline. 

“Without a shift in mining methodology, the industry will fail to mine South Africa’s deep-level complex ore bodies profitably, and this will inevitably result in the sterilisation of resources, which will hasten the closure of mines prematurely and cause significant job losses.” 

Research, according to Froneman, suggests that job losses to the tune of 200 000 by 2025 could affect two million people indirectly if the mining sector continues on the current trajectory. 

He pointed also out that modernisation goes hand in hand with mechanisation. 

“And what do we mean by a modern mining industry? In brief, a modern mining industry will optimally extract and beneficiate the country's natural resources, causing no harm to people or the planet,” Froneman said. 

“It benefits both the local community as well as the national economy. It procures locally, is a preferred employer of well-skilled people and creates appropriate risk adjusted returns for investors. 

“Regulations, taxation and incentives are consistent, transparent and recognise mining as a long term driver of economic growth.”

Read Fin24's top stories trending on Twitter:

ZAR/USD
16.92
(+1.33)
ZAR/GBP
21.36
(+0.76)
ZAR/EUR
19.18
(+0.84)
ZAR/AUD
11.82
(+0.73)
ZAR/JPY
0.16
(+1.03)
Gold
1808.26
(+0.80)
Silver
18.73
(+2.61)
Platinum
848.00
(+1.37)
Brent Crude
42.97
(-0.05)
Palladium
1925.00
(+0.44)
All Share
55870.69
(+1.13)
Top 40
51558.75
(+1.25)
Financial 15
10275.29
(+1.87)
Industrial 25
77503.35
(+0.84)
Resource 10
52793.47
(+1.49)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1786 votes
I am taking a hit, but should be able to recover in the next year
23% - 2342 votes
My finances have been devastated
34% - 3499 votes
It's still too early to know what the full effect will be
25% - 2520 votes
Vote