MARK CUTIFANI: Next-generation societal values should drive mining

The world is undoubtedly different from that of the turn of the millennium. We have seen enormous advances in technology, and have made significant strides in infrastructure, health and education. On this journey, mining continues to play an essential role in enabling human progress.

Despite mining’s clear contribution to almost every aspect of modern life — from food production to our homes, transport, clean energy and communication, which has — improved the lives of billions of people  — mining continues to face a crisis of reputation.

We are still seen as an industry that takes more than it gives, even though we drive such a large proportion of the world’s economic activity, whether directly or indirectly, while disturbing a small fraction of the earth’s surface.

If we are going to continue to play an instrumental role in powering human progress into the future, we need to ask ourselves some tough but necessary questions about our values as an industry.

We need to connect the future of mining with next-generation societal values. These are the values of increased transparency, responsible technological innovation, sustainability and shared prosperity, all of which are emergent in our world and are shaping a very different future society.

Mining in 2020 is an entirely different ball game to when I started my career more than 40 years ago. To produce 40kg of copper in 1900, we had only to extract two tons of rock. NowToday, because of declining grades, to produce the same quantity of copper the rock required has increased by a factor of 16. Likewise, the energy needed has risen 16 times, and water consumption per unit of copper has doubled.

Worldwide, our industry is on the cusp of a significant change led by the accelerating pace of technological innovation. Digitalisation, automation and artificial intelligence are all opening up opportunities for the industry to be safer, as well as more productive and environmentally and socially sustainable.

Mining has a safer, smarter and more sustainable future — and that is the future we are working towards at Anglo American. This is a future in which we eliminate workplace fatalities once and for all, a future in which we radically improve our productivity and the way we use land, energy and water, and a future in which our communities thrive — with better health, education and increased levels of employment — long beyond the life of any mine.

This is at the heart of our innovation-led approach to sustainable mining, which we call FutureSmart Mining. This approach brings together step-change innovations in technology, digitalisation and sustainability that are transforming how we source, mine, process, move and market our products. At its core, FutureSmart Mining is about transforming our physical and social footprint.

Think of a landscape, with little of what’s going on in terms of mining, with mainly underground operations that use less water and energy. We see FutureSmart Mining delivering on this future: minimising our physical footprint while enabling us to supply metals in a reliable and predictable manner, while creating enduring value for our shareholders, communities and society as a whole.

Raw materials

Climate change is one of the defining challenges of our time. We cannot ignore or underestimate its global impact and implications for every sector of the economy and human life as we know it now. There is, however, one point that is lost in the debate, and that is the fact that the transition to a low-carbon economy cannot happen without the products of mining.

The metals and minerals that we produce are the essential raw materials for all our modern lives — from the platinum group metals (PGMs) that clean vehicle emissions or enable hydrogen energy, to the copper essential for renewable energy, our phones and other devices.

Mining is the cornerstone of the energy transition, and we are already seeing this change. On PGMs alone, the Hydrogen Council predicts that 18% of energy demand by 2050 will be met by hydrogen.  This shift has the potential of creating at least 4-million new jobs globally and contributing significantly to new and clean energy supply worldwide.

The picture is equally favourable for copper, which is a critical metal for a new era of clean, green, renewable energy. Copper is at the heart of every wind turbine, electric vehicle and solar panel, while also helping efficient energy storage.

As we reckon with climate change, we must all play our part to reduce our reliance on carbon and get emissions down, while also acknowledging that mining is an enabler of this transition — and a critical one at that.

In SA, we must work collaboratively with the government to ensure the mining industry has an adequate supply of sustainable, cost-effective and reliable energy.

None of us can doubt the impact rolling power blackouts has on the viability and competitiveness of SA’s economy, including our mining industry. Load-shedding hinders productivity, affects the functioning of critical equipment and creates a safety risk for our people, especially in underground operations.

We support the government’s efforts to deal with the structural problems at Eskom. But more needs to be done. There is no better place to start than by drastically streamlining regulatory processes to enable the establishment of self-generated power that can supplement Eskom’s constrained capacity.

We are encouraged by mineral resources & energy minister Gwede Mantashe’s indication of support for self-generated power in SA. This is a positive step in solving the mining crisis.

The mining sector can play a major role in it. Several pilot projects are in the pipeline, including our large-scale solar photovoltaic (PV) project for the Mogalakwena PGMs mine, and our role in helping develop the 100MW Kathu Solar Park in the Northern Cape.

Improve lives

Creating a supportive environment for projects such as these can immediately add additional power to the national grid, ease the burden on Eskom and proactively help develop sustainable energy that the industrial users that power the economy can rely upon. We must act decisively to solve SA’s energy crisis to prevent any further loss of momentum for the country’s economy.

In thinking about the next decade and what it holds, it is important to reflect on the power of being purposeful in how we envisage the future of mining. Our success as an industry is not only measured by the ounces, carats or tons we mine, it is also measured by whether we improve people’s lives.

As our global population grows, we expect to see even higher demand for the minerals and metals that are essential to the products and services that power human progress.

While we may get the fundamentals right — of maintaining cost and capital discipline, mining more safely, sustainably and innovatively — we will not move the dial if we don’t connect these fundamentals of mining to the next-generation values of increased transparency, responsible innovation, sustainability and shared prosperity.

Mining has the opportunity to not only continue positively powering human progress, including through technology, towards a cleaner, greener, more sustainable world, but to do so in a way that is more closely aligned to what society expects of us. That is how we will deliver enduring value — locally and globally.

• Cutifani is CEO of Anglo American.