Forever and beyond
In order to thrive, the industry needs to sustain its innovations into the future
For Anglo American, and the mining industry at large, the pressure is certainly on. Worldwide productivity declines over the past decade are estimated at around 30%, driven in part by mineral scarcity and declining ore grades, outdated processes and technologies, and capital overruns.
As the global mining industry remains the world’s most important industrial activity, providing the essential raw materials that enable our modern lifestyles, finding solutions to the industry’s challenges is paramount.
Mining represents around 10% of the world’s economic activity as measured by revenues from the commodity mining, quarrying and petroleum sectors.
Anglo American, with a long history of innovation in areas such as deep-level underground mining and exploration, has renewed its focus on finding solutions for the productivity challenges facing the industry. Its focus areas go beyond finding ways of extracting metals and minerals more efficiently and with a reduced environmental footprint. A good example of this is the company’s Emalahleni Water Reclamation plant, in Mpumalanga,
which — through reverse osmosis —turns mine water into fresh water for over 80 000 people. Further to this, the gypsum sludge residue is then turned into gypsum bricks, which have allowed the company to build 66 3-bedroom houses for its employees working in the SA coal business unit.”
For SA, the future for platinum group metals and diamonds is of particular interest, as the country remains richly endowed with these metals and minerals, and Anglo American remains by far the biggest producer of both platinum and diamonds locally.
On the platinum group metals side, Anglo American is focusing market development efforts in three areas: finding new industrial applications for the metal; growing jewellery and platinum investment demand; and investing in the fuel cell value chain.
Anglo American Platinum believes fuel cell vehicles show strong growth potential, and will be a key driver for platinum demand in future. The group is forecasting demand from fuel cells of about 500,000 oz of platinum by 2025, equivalent to roughly 20% of Anglo American Platinum’s current annual output.
Anglo American Platinum’s venture capital fund has also invested in a number of companies in the fuel cell value chain. It has, for example, invested in Hydrogenious Technologies, a German company that focuses on the safe storage and transport of hydrogen, which is used in fuel cell vehicles.
Recent achievements include the successful development of an ethylene scavenger — a small label containing a catalyst — that is used in packaging to help keep fruit fresh for longer, thereby reducing food waste, and a carbon monoxide oxidation mask, which is used by emergency responders in tackling fires.
For De Beers, which revolutionised the diamond market when it adopted the clever advertising slogan “A diamond is forever” in 1948, the demand challenge remains largely a marketing one. With increased competition from a wide range of luxury goods and a preference for experiences rather than material goods among younger consumers, new approaches are required to keep millennials interested in diamonds.
Playing the long-term game
Speaking at the Mining Indaba earlier this year, Anglo American CEO Mark Cutifani said disruption — whether social, political, technological or economic — will either make most companies obsolete or propel them into the future.
He says to thrive and become more resilient, companies like Anglo American would have to pay careful attention to innovation and sustainability.
“Resilience, as an end-goal, needs pillars to lean on. If we can assume that you have a sound asset base, an appropriate business model and strategy, then, in my view, creating a culture of innovation and thinking differently about sustainability are two areas that can help define a new future for ourselves and our industry,” he says. The focus on sustainable innovation as a foundation for resilience is particularly important for the mining sector — an industry which is prone to the market being unpredictable.
There is also the challenge of cultivating better relationships with host communities and protecting the natural environment — two areas the mining sector is routinely criticised for. For this Cutifani refers to the need for “a renewed social contract”.
“There is the need for a renewed approach. A partnership built on trust and the common good. We must become good neighbours, where every community demands a local mine because people know it will mean a better opportunity for that community to develop and grow its commercial infrastructure,” he says.
“This is not enough. When we are better stewards of our natural environment, mining safely and responsibly, and operate within thriving communities that own our success and have open and cooperative relationships with our stakeholders, the end result is a company that has a competitive edge — one that will thrive.”