MINING SECURITY

SA’s R400 billion mining industry and its mega security challenges

Spread over and under vast tracts of land throughout South Africa, mines, which according to the Minerals Council of South Africa, contributed around R400 billion to the GDP (Gross Domestic Product) in 2020 and employ an estimated 450,000 people, are extremely difficult premises to safeguard. Aside from the age-old challenges of theft, illegal mining and staff management, mines now have to factor the Covid-19 pandemic into their business plans too.

Mining industry worldwide: statistics and facts

As with most industries, the Covid-19 pandemic has impacted heavily on the global mining sector, according to market and consumer data provider, Statista.

“The dependency of various high-techindustries on rare earths is a recent issue — coal, on the other hand, is still one of the leading global energy resources. Consequently, the mining sector is pivotal to the world’s economy. Mining companies and mine employees endured temporary mine closures in line with some countries’ lockdown regulations, outbreaks of the virus at work sites, and other issues during 2020, in relation to the pandemic.”

Major challenges

“The mining industry’s performance has been disrupted by criminal activities, community unrest, activities of procurement mafia and poor service delivery at municipal level,” says Roger Baxter, CEO of the Minerals Council South Africa. “Illegal mining is a multi-billionrand industry, and it is a considerable problem for the mining sector. Not only does it represent significant challenges and threats to national security and socioeconomic development, but it also increases the risk of the establishment of alternative and illicit economies.”

“Illicitly produced commodities are fed into the illegal market where the government loses out on royalties, income tax and value added tax. It also increases vulnerability to transitional organised crimes, and other serious cross-border crimes. It therefore presents a serious risk to the sustainability of the mining industry and its ability to contribute to a meaningful future for all South Africans. Illegal mining and organised crime are usually inter-related as illegal mining is very often spearheaded by globally connected criminal syndicates.”

“The growth in illegal mining could be attributed to a combination of a difficult socio-economic climate, limited resources at the disposal of law enforcement agencies such as police, immigration, border controls and prosecuting authorities, thriving syndicates, gaps in legislation to charge illegal miners and the absence of a formal regulatory framework to manage the challenges presented by artisanal mining. There is, unfortunately, no distinction between illegal mining and artisanal mining activities, and the absence of clarity on government’s policy position around artisanal mining creates ambiguity on what law enforcement agencies are required to do to manage the issues,” he says.

“We can’t put a value on security disruptions to our members or the mining industry,” adds Allan Seccombe, Head of Communications at the Mineral Council South Africa. “The Minerals Council estimates that, so far this year, coal exports are 20% down, translating to a loss R10bn, while iron ore exports are seven million tonnes below target, equating to a loss of R15bn in the year to date. One of the biggest factors hampering exports is the theft and vandalism of Transnet rail infrastructure.”

Power

Another troubling area is that of power supply, he continues. “Ongoing uncertainties around electricity supply, and electricity tariffs that are rising faster than CPI (Consumer Price Index), are contributing to high mining input costs, which have been rising at about an average of eight per cent per annum for some time now.”

Seccombe says an additional problem related to community unrest is the growing exploitation of grievances by individuals or groups demanding that mines grant them preferential supply or employment contracts, using community protests as a way to intimidate or coerce mining companies into these deals or face disruptions to operations. “With many municipalities failing to deliver basic services, communities are easy targets for those wishing to stir up anger against mines. The Minerals Council is working closely with the police to proactively address the problem.”

Zama zamas

A report by Africa News says there are tens of thousands of “zama zamas” (which in isiZulu means ‘those who try and try again’) in South Africa, where the unemployment rate is over 30%. It goes on to cite the National Association of Independent Miners (NAAM), which puts the number of abandoned mines in South Africa at around 6,000.

“Illegal miners’ disregard for the law will not be tolerated”, avers Major General Joey Kers, Acting Provincial Commissioner of SAPS (South African Police Service) in the Northern Cape. Quoted in a media statement on 8 July 2021, his comments followed a multi-disciplinary, crime intelligence-driven operation in the Namakwa district that led to the arrest of 37 illegal mining suspects.

The impact of the Covid-19 pandemic on the mining industry

“The Covid-19 pandemic has affected the commodity markets in a variety of ways,” says Andrew Swart, Global Sector Leader – Mining & Metals at Deloitte, in his article “Understanding Covid-19’s impact on the mining and metals sector”.

“Company operations have been affected through isolated outbreaks and government mandated shutdowns and the demand for many commodities remains low, with a lower near-term demand on the horizon.”

Adds Seccombe: “South Africa was no different, as a national lockdown was ordered by the government in March 2020. The mining industry was one of the first industrial sectors to return to full operations sooner than others because of the close cooperation and collaboration between the Minerals Council and the Department of Mineral Resources and Energy to return employees safely back to work.”

He continues: “The South African mining industry’s response to Covid-19 has been comprehensive, collaborative and effective. Covid-19 will be with us for the foreseeable future, and we will continue to develop and implement leading practices to save lives and livelihoods. We will be guided by Standard Operating Procedures and in compliance with the DMRE (Department of Mineral Resources and Energy) Guidelines for a Mandatory Code of Practice on the Mitigation and Management of the Covid-19 Outbreak. We will continue to monitor and support vulnerable employees.”

“At work, we will continue to implement precautionary non-medical measures to prevent the spread of Covid-19, such as screening and testing, social distancing, the wearing of masks and sanitising. More than that, companies will continue to provide education and communication to employees and community members around Covid-19, and how to prevent it. Our efforts to address the impact, and limit the spread of Covid-19, extend beyond the mine gate and are aimed at alleviating, where possible, the burden on public resources and providing support to communities.”

On 23 September 2021, the Minerals Council South Africa issued a media statement announcing that it had reached a Covid-19 vaccination milestone within the mining workplace, with more than 200,000 employees and contractors either fully or partially vaccinated.

Solutions to infrastructural constraints

Says Roger Baxter: “While there has been welcome progress on infrastructure reform, such as allowing the construction of embedded 100MW energy projects and moving towards private sector participation in the country’s ports, more urgency is needed to unlock the economy. Greater collaboration and a focus on joint problem solving will lead to better solutions and practical implementation. The five most critical structural and institutional reforms are the urgent stabilisation of South Africa’s fiscus; opening Transnet and Eskom to private investment and competition; the complete reform of the civil service; improved law enforcement to halve crime in three years; and creating policy and regulatory certainty to create global investment competitiveness. Mining and related sectors may materially grow investment, production, exports and value creation for the country, through continued collaboration on critical reforms that will unlock this investment.”

To this end, Seccombe says Transnet and the Minerals Council are exploring areas of cooperation to boost productivity on the export channels and to address security concerns that have restricted SA’s bulk-mineral exports at a time of high prices. “South Africa has not realised the full benefit in taxes from offshore sales of thermal coal, iron ore, chrome ore and manganese because of constraints on the railways and at the ports.”

Screen capture of Minerals Council South Africa’s main webpage at https://www.mineralscouncil.org.za/minerals-council-position-on-covid-19

Paradigm shifts

Roussos Dimitrakopoulos of McGill University in Montréal, Canada, is an advisory board member of SAIMM (Southern African Institute of Mining and Metallurgy). In his article on sustainable development and digitalisation, published by SAIMM, he speaks of new paradigm shifts in the mining industry. “Most technical aspects of a mining complex/ mineral value chain are substantially affected by uncertainties (stochasticity) stemming from multiple sources,” he says. “These range from the materials available in the ground to the operational performance of a mining complex, including the ability to adapt to endogenous and exogenous changes. The effects of uncertainty are compounded by multi-level decisionmaking.”

“With new technological developments, it is possible to quantify and account for these uncertainties, as well as to assimilate new information collected as a mining complex operates, including data from various sensors.”

“To date, new geostatistical simulation frameworks and smart(er) simultaneous stochastic optimisation approaches allow us to perform the strategic planning of industrial mining complexes under uncertainty at a new scale of intricacy, not imagined a decade ago. As always, new challenges and opportunities emerge, thus it is hoped that the development of new paradigms will extend to stochastic ’self-learning’ mining complexes. Selflearning will capitalise from developments in artificial intelligence (AI), enabling engineering production systems to learn from operations and respond to new, real-time incoming production information collected by a wide range of online sensors, already available in industrial mining complexes. New digital technologies and related R&D (research and development) will continue to create technological step-changes and paradigm shifts to advance the performance of mineral value chains and support the sustainable and responsible development of mineral resources — all new, advanced and exciting developments for both the mining industry and academia.” he concludes.

Contributors

Statista

Website: www.statista.com

Email: support@statista.com

Phone: +44 (0)20 8189 7000

Minerals Council SA

Website: www.mineralscouncil.org.za

Email: aseccombe@mineralscouncil.org.za

Phone: +27 (0)11 498 7100

SAIMM (Southern African Institute of Mining and Metallurgy)

Website: https://www.saimm.co.za

Email: communications@saimm.co.za

Phone: +27 (0)11 834 1273