Mining - November 2022

Tapping into Africa

The importance of Africa to the global mining industry cannot be overstated. Africa has abundant mineral resources that drive the modern world – from lithiumion batteries that power many smartphones to vital copper materials used in electrical wiring.

Africa is also rich in gold, silver, copper, uranium, cobalt, and many other metals that are critical inputs to manufacturing processes worldwide. Yet, as well as being a top producer of these valuable resources, the continent has some of the largest remaining untapped reserves.

How do we tap into this potential? How do governments of countries like Burkina Faso and Côte d'Ivoire attract mining investments so that everyone stands to gain? The questions may be simple, but the answers are far more complicated, as our Africa Special Report this issue explores.

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From the pits of Australia to the coal fields in South Wales, mining companies like BHP, Rio Tinto and others are hunting for workers to fill the labour shortage gap. Mining companies worldwide have warned that a lack of skilled labour in the sector will affect output and reduce production capacity. According to Reuter's Factbox, BHP warned that a tight labour market, supply chain snags, and inflationary pressures would continue through fiscal 2023 after it reported a lesser-than-expected iron ore output for the fourth quarter. Rio Tinto also forewarned that pandemicrelated labour shortages in Western Australia and rising inflation would hit its earnings in the second half. Others like Allkem, the lithium miner and Whitehaven Coal, alerted that labour shortages remain a crucial challenge for their operations.

Despite these issues, the world's big miners are optimistic. We can attribute this optimism to the growing call for sustainability, energy transition trends, and other developments triggering demand for selected commodities.

Coming off a decade of challenges and underinvestment, the mining industry now enjoys strong balance sheets and P&Ls. This shows the industry is about to experience growth, even though mining executives must now be proactive about talent and labour shortage.

In Australia, when the COVID-19 pandemic was affecting economies worldwide, the Australian mining and resources industry experienced a surge in activity. The Australian Bureau of Statistics reported that employment in the resources sector grew by 8.5% between February 2020 and November 2020. However, when countries started closing borders, problems erupted, including the lack of skilled foreign workers and local staff shortages due to travel restrictions, lockdowns, and interstate border closures. This caused many companies to struggle with productivity.

Prolonged border closures added to an already small talent pool to wreak havoc on Australia's resources industry, according to Steve Knott, the chief executive officer of Australian Resources and Energy Group.

Mining struggling to attract next generation

A 2020 report by Canada's Mining Industry Human Resource Council (MiHR) revealed that the labour gap is tighter than in other sectors in the country despite earnings in the mining sector increasing (nearly 40%) more significantly than the average for all industries in the last decade. This means that for every job vacancy in mining, there were less than three potential job seekers across Canada, compared with the average of six job seekers for every vacancy in other industries.

Filling the talent gap is an issue affecting all industries, but mining is impacted more than others. What is your skills shortage strategy?

WRITTEN BY: LANRE-PETER ELUFISAN

In the US, mining and logging sector employment, excluding oil and gas, declined to about 176,900 in April, down 8.1% compared to April 2019, according to US Bureau of Labor Statistics data. US mining employment has fallen 20.4% over the past ten years.

Strategies for finding talent and adapting to the skills shortage

To address this shortage of skilled labour, mining executives and chief human resource officers must design a strategic plan to hire and retain a qualified workforce. Below are some ways to meet the need for talent.

Flexible and remote work policies attract mining staff

The World Economic Forum's Preparing for the Future of Work report found that around 95% of surveyed mining companies are adopting strategies that create more remote working opportunities. However, the sector is more fieldwork than work-from-office roles. But new opportunities are coming from the digitalisation and electrification of modern mines. However, for fieldwork

roles like geologists, engineers, drillers, trade technicians, operators, and laborers, employers need to give room for flexibility, like having a balanced ratio of weeks-on to weeks-off with a mix of benefits.

Attract the next generation of mining workers Skills shortages are now a common feature of the global economy, especially in countries with an ageing population, where nurses, truck drivers, and engineers are scarce. For the mining industry, the shortages are so severe, partly because of the commodities boom that caught it more or less by surprise. To fill this gap, mining companies should start investing in strategies to attract the next generation of mining workers. They can do this by offering paid internships or scholarships to potential employees. For example, in the early 2000s, Anglo American paid to put 1,000 South Africans through universities and have since been investing in improving education in the country.

Stephen Enders, head of the mining engineering department at the Colorado

School of Mines, says enrolments in professional programs crucial to mining are also down substantially, even though demand for mined materials key to decarbonisation is high and expected to rise. Miners must learn to attract Gen Z and millennials to work at their companies through innovative job fairs, internships, scholarships, and career symposiums that help them understand the relevance and benefits of the work. The trick is to get their attention early because the labour market is more competitive today.

Train and retrain your mining workforce

To attract and retain a solid workforce, mining companies should have in-house training to broaden their recruitment pool and remedy the lack of critical skills among new entrants. It will help fasten the learning curve for recent graduates who understand job requirements more in theory than

practice. Employers can also hire retired explorers to train newer geologists and engineers in missing skills areas like hard rock, seismicity, and resource modeling. They may also offer cultural-sensitivity training to foster community relations, as it is typical for the site team leader to interact with mining communities. Although some employers hire specialists, others opt to train new and existing employees. Nowadays, many mining workers need advanced education and skill levels. So whatever approach you take, provide individual and proactive large-scale training to create upskilling opportunities for your people. This will enhance overall productivity.

Look both ways (hiring local and foreign mining workers)

It is always a good idea for mining companies to invest in the development of local communities. This typically comes as

corporate social responsibilities. However, companies can adopt training workers from mining communities. That means finding workers among the local population. Rio Tinto offers such a thing, providing basic literacy courses to raise the indigenous portion of its workforce to 15%.

Asides from that, skilled immigration is another solution. To give you an idea, Australia is creating new visas for temporary workers, enabling companies to recruit from countries like the Philippines, China, or Africa. With the swelling demand for materials critical to the clean energy transition, mining companies have the work but now need the workers. They must look within their community and overseas for the best quality and skilled workforce.

Encourage diversity and inclusion

Australian Federal Resources Minister Madeleine King has urged the mining industry to encourage female employment. Although

data shows around 52 000 women were employed in the resources sector, King says that hiring females could help address labour shortages by increasing the skills supply, especially as the industry modernises to adopt more technology.

Opportunities in the mining sector exist on remote sites, city-based offices, laboratories, and high-tech control and management centres. Women can make a career by managing teams and projects, building robotics, piloting drones, social and community responsibility and philanthropy, engineering machinery, or tackling climate change.

Addressing the skill shortage in the mining industry is first a matter of adaptation. It will take some time before the sector gets enough skilled workers for all its demands. However, to adjust and consistently meet the need for talent, mining companies need to reimagine their recruitment strategy and take on board the above suggestions.

Africa is renowned as a continent rich in natural resources that still offers incredible opportunities for mining, especially with the adoption of new tech

BY: LANRE-PETER ELUFISAN

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The relevance of the African mining industry to the global supply chain couldn't be overstated. Africa has abundant mineral resources that drive the modern world – from lithium-ion batteries that power many smartphones to vital copper materials used in electrical wiring. Africa has gold, silver, copper, uranium, cobalt, and many other metals that are critical inputs to manufacturing processes worldwide. Yet, as a top producer of these valuable resources, the continent has some of the largest remaining untapped reserves.

Home to about 30% of the world's total mineral reserves, the continent hosts 80% of the world's platinum. Two-thirds of the world's cobalt is also found in Africa, while half of the world's manganese sits within the continent's shores.

Democratic Republic of Congo and South Africa possesses up to half of the world's cobalt and chromium resources. Zimbabwe holds the world's fifth-largest lithium reserves, and Gabon has the world's second-largest manganese deposit. If it had translated these resources into riches, Africa would now be in a much stronger economic position.

However, the mining and extractive sector has contributed significantly to Africa's exports, revenue, and GDP annually. Indeed, the mining and natural resources sector are critical in driving economic growth and development on the continent but more has to be done. Only about 5% of global mining production is conducted in Africa, whereas 58% of the world's total mining production is conducted in Asia, 14% is achieved in North

“NEW TECHNOLOGIES CAN HELP MINING FIRMS BOOST PRODUCTIVITY”

America, and 9% in Europe. Oceania and Latin America contribute 7% each to the global mining mix.

To develop mining in Africa, governments must create an enabling business environment that attracts miners. And mining companies must embrace technology and automation to enhance mining practices.

Major Factors Driving Mining in Africa

The mining industry has undoubtedly been a critical driver of growth throughout history, from the iron and bronze ages to the modern information era. For African countries, there are various drivers depending on the degree to which nations adopt new technologies and policies. According to the Policy Center for the New South report, these drivers can be divided into macroeconomics, governance, and operations.

The macroeconomic drivers are financing and tax incentives, and international investment. As the global trend of mineral royalty tax rises, most African countries have maintained a stable tax regime. This will help mining companies plan correctly for the future. They have also attracted more investment. According to Deloitte, more than half of the 29 major mining projects identified met their investment needs through international stock exchanges. Thanks to access to capital, the continent's minerals are open to interested global parties.

On the governance front, there is a need to drive transparency and accountability in the sector to avoid the resource curse or the negative externalities. Also, initiatives and policy movements, such as the Extractive Industries Transparency Initiative (EITI), are critical to growing and improving the natural resource sector. The same report reveals

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that the relative logistics-related cost of mining in Africa is estimated to be 250% of the world average because of infrastructure gaps, especially in transit and energy networks.

Regarding operations, there is a need to invest more in infrastructure development even though there's been an increase. There are opportunities for more. As Deloitte estimates that between 2003 and 2030, over 830 infrastructure projects will be undertaken, and approximately $50 billion will be invested in mining projects during the same period.

Opportunities In Africa's Mining Industry

In 2018, 44 African nations signed an agreement establishing the African Continental Free Trade Area (AfCFTA), which was launched in 2021 to facilitate trade in goods, services, and the movement of people.

The new trade agreement allows the continent to explore the mining sector, reduce abject poverty and create opportunities for Africans. When this comes into full implementation, Africa should be in a position to maximise its abundant mineral reserves and increase its share of global trade in the mineral resources market.

Many African countries are already highly dependent on resources, with two of the 54 countries generating over 75% of their annual export earnings from mineral products. Yet, a significant portion of the mineral resources is unexplored or under-explored.

For instance, the West Africa region is endowed with under-explored mineral resources, especially in Burkina Faso and Côte d'Ivoire. These two countries are among the least-explored in the Birimian Greenstone Gold Belt, stretching across Ghana, Côte d'Ivoire, Guinea, Mali, and

Burkina Faso. Like Burkina Faso, Côte d'Ivoire and Senegal are currently on the lookout for investors because of their geological potential. Although political instability and infrastructural gaps exist in some areas, investment opportunities abound for the unexplored minerals on the continent.

Using Tech to Scale Mining in Africa

Aided by the growing demand for minerals and metals used in renewable energy production, technology plays a critical role in transforming the mining industry –which is a clear opportunity for Africa.

To scale mining in Africa, critical stakeholders in the continent's mining sector, including mining companies, African governments, and the continent's various regulatory authorities, must

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embrace technology, especially the Fourth Industrial Revolution (4IR) technologies. Automation, big data, and Artificial Intelligence (AI) can help mining firms in Africa limit their effects on the environment. These technologies can also help mining firms boost productivity, improving working conditions and reducing overall operating expenses.

Some African mines have already started incorporating technology into their operational processes. Resolute Mining's Syama mine in Mali is on course to be the world's first fully autonomous underground mine. Autonomous haulage and loaders are used to move ore and waste to the surface of the mine, while drilling is also becoming a technologically advanced venture. Kumba Iron Ore, a leading South African supplier of seaborne iron ore, also incorporates drone technology in its mining practices. This has significantly reduced the need for employees to do physical blast clearances and survey activities as drone technology is employed to carry out these activities.

The incorporation of technology by some mines in Africa shows that Africa's mining industry will keep improving. Indeed, existential challenges like lax regulatory oversight, weak public institutions, and the ripple effects of political instability still weigh heavily on the continent's mining industry. But the future of Africa's mining industry couldn't be brighter.

With technology, Africa can improve its meagre 5% share of global mining production to the levels reached by other continents – and there's no reason it should not. Investors and critical stakeholders in African mining must not shy away now from the opportunity.

Rare-earth

As the world evolves, we increasingly depend on high-tech devices such as smartphones, wind turbines, electric and hybrid vehicles, and flatscreen monitors. The components of these products are made from rare-earth elements (REE). Although they may include only small amounts, they are essential to the operation of these increasingly important devices.

REEs are a group of 17 metallic elements with similar physical and chemical properties that occur together in the

periodic table. Sixteen of these occur in nature and are typically found in varying proportions in the same ore deposits. Here are the top ten most important rareearth elements that the world needs and how they contribute to the advancement of humans, society, and technology. Prices quoted are in US$ per kg, according to mineralprices.com as of 19/10/22.

WRITTEN BY: LANRE-PETER ELUFISAN

Lanthanum is third-most abundant of all the lanthanides. USA, Brazil, India, Sri Lanka, and Australia make up the world's production of lanthanum.

Lanthanum is used in large quantities in nickel metal hydride (NiMH) rechargeable batteries for hybrid and electric automobiles.

It is also used as a petroleumcracking catalyst. Flame lighter flints, hydrogen sponge alloys, night vision goggles, and highquality camera and telescope lenses contain lanthanum in pure or impure forms.

Samarium is a lanthanide and is not found free, but as part of a conglomerate of minerals. They mainly find this mineral in China, the United States, Brazil, India, Sri Lanka, and Australia.

Samarium's primary use is in samarium-cobalt alloy magnets for headphones, small motors, and pickups for some electric guitars. They use samarium oxide as a catalyst for the dehydration and dehydrogenation of ethanol.

Samarium is also used as an absorber in nuclear reactors, and the magnets are used in precisionguided weapons.

US$ per kg

Cerium is one of the most abundant rare-earth metals. We can find enormous deposits of cerium in India, Brazil, and Southern California, U.S.

As a component of mischmetal, cerium is used to manufacture cigarette and gas lighters alloys. Cerium oxide is used for producing incandescent gas mantles and as a catalyst in selfcleaning ovens. Cerium is also in the carbon arc lighting for studio lighting and projector lights used in the film and television industry.

4.13 US$ per kg

Yttrium gained prominence in the past few decades as an indispensable rare earth metal used in computer technology, energy, medicine, and other fields. China, Russia, India, Malaysia, and Australia are the leading producers of Yttrium.

Yttrium is used to produce phosphorus used for cell phones. Before then, it was used for colour television sets. Yttrium element is contained in the ceramics composition used in electronics, thermal barrier coatings for jet engines, and medical implants. Yttrium iron garnets are used for microwave filters and in radar and communication technology.

Gadolinium is a member of the lanthanides and is usually found in other minerals with commercial implications. The leading producers of gadolinium are China, USA, Brazil, India, Australia, Greenland, and Tanzania. The gadolinium compounds are used as phosphorus in colour televisions, and we use gadolinium yttrium garnets in microwaves.

lanthanide is usually mined as part of a conglomerate of other rare earth elements. The major mining areas for neodymium are China, the United States, Brazil, India, Sri Lanka, and Australia. Neodymium is used with iron, and boron to create powerful permanent magnets which also called NIB magnets. These magnets are used in the production of computers, cell phones, iPods, medical equipment, toys, motors, wind turbines, and audio systems. The neodymium-YAG laser can be used for decontamination after the detonation of a chemical weapon, in medicine to treat skin cancers, for laser hair removal, and to cut and weld steel.

US$ per kg

Praseodymium is a lanthanide and rare earth metal. The main mining areas for praseodymium are China, the USA, Brazil, India, Sri Lanka, and Australia.

Praseodymium is used in highintensity permanent magnets, essentials for electric motors and generators used in hybrid cars and wind turbines. It is also used in nickel metal hydride (NiMH) rechargeable batteries for hybrid automobiles. Praseodymium is used in aircraft engines, highintensity carbon arc lights, and lighter flints.

US$ per kg

Dysprosium is a lanthanide and rare earth metal. The main mining areas of dysprosium are China and Malaysia.

We use dysprosium alloys in ship sonar systems and sensors and transducers. It is also used in data storage applications, such as hard discs. Manufacturers use dysprosium in laser materials, sound systems, and lamps.

US$ per kg

Terbium is a lanthanide and rare earth metal. The main mining areas of terbium are China, the USA, India, Sri Lanka, Brazil, and Australia.

Terbium is used in colour phosphors used for lighting applications such as trichromatic lighting and in colour TV tubes. The green colour on Blackberry or other high-definition screens is a by-product of terbium. Terbium is present in hybrid car engines, magneto-optic used in the recording of data, and optical fibers.

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Scandium is purely a transition metal but is regarded as a rare earth element because its chemical properties are similar to the rare earth and found in the same ores. China, Russia, Ukraine, and Kazakhstan are leading producers of scandium.

The significant uses of scandium are as an additive to aluminum-based alloys for sporting equipment such as golf shafts, baseball bats, bicycle frames, and fishing

rods. Scandium iodide is also used in mercury vapour lamps, mainly to replicate sunlight in studios for the film and television industry. The oxide form is used to make high-intensity stadium lights.

According to the International Renewable Energy Agency, about onethird of the permanent rare earth magnets produced in 2020 went into wind turbines and electric vehicles. These metals function as parts of a whole, making them scarce when large percentages of mined elements are concentrated in one industry or single manufacturing line.