Number 1 Risk: License to Operate

Effective Mine Risk Management

by Ina King (Potgieter) November 28, 2019

The heart of risk management in mining is the identification of hazards, assessment of their risk, and application of appropriate controls. Regardless of whether the hazard is geological, environmental, process or human, they should all be addressed through effective risk management.

Mining provides many people access to socio-economic development. But the sector is certainly not without risk. Mine operators, legislators, miners themselves as well as other role-players, experience frequent difficulties and challenges throughout the life of mine.

Judging by the mining sector’s performance on the stock market, investors have concerns about the sector’s future. Disruption, social responsibility, safety, the environment, innovation and technology, and broader stakeholder demands are just some of the issues investors are grappling with.

What Could Possibly Go Wrong?

In their recent study of the Top 10 Mining Risks for 2020, EY notes that for the third year in a row, there have been significant fluctuations in mining risks. Paul Mitchell, Ernst & Young Global Mining & Metals Leader, notes that License to Operate remains in top slot while Future of the Workforce is at number two - up from seven in 2019.

Mining activity, by its very nature, involves some amount of risk. Miner safety, increasingly strict regulations, the reliance on technology, inconsistent demand for raw materials, high commodity prices, human capita, the political landscape, and climate change are concerns that every mining company has – and will — grappled with.

The Captains of Industry can deliver continuous improvements in safety and risk governance standards. For any industry to be successful it must identify the hazards, assess the associated risks and to bring the risks to a tolerable level.

Most mining companies can clearly identify their critical risks. They can clearly point out the observable, frequent risks. But is that enough? Is the mining industry asking the right risk questions?

Risk Assessment

The traditional risk matrix defines the level of risk by considering the category of probability against the category of consequence severity. It is a simple tool to increase visibility of risks and assist risk management decision making. But does the traditional risk matrix work in the mining industry?

The mining sector has a wealth of control measures that have been introduced over the years. If all these measures were effective, there would be far fewer accidents than there currently are. A mine’s ‘critical risks’ are, more often than not, static: an act of nature, human miscalculation, an unchanging economy. The world is changing and so is the industry. Nothing happens in a vacuum. Recognising and planning for the ‘radical’ rather than the ‘static’ or ‘usual’ is crucial.

The risk assessment process at a mine should be continuous – it should never be regarded as a one-off exercise. It is necessary to establish a baseline, but a single risk assessment report is not comprehensive enough.

South African Mining & Technology

The South African mining industry is in transition. From traditional deep level, labour intensive mines to a shallower, more technologically advanced industry. Since 2010, overall mining production has declined marginally, as declining deep level gold production is offset by increased bulk and base metal commodity production.

Digital transformation and effectiveness remain in the top three risks and opportunities. According to Mitchell, innovation could certainly bring a much-needed change to the sector. Some South African mines need to innovate in order to survive. For others, it is simply about improving return on capital investment by being prepared to rethink how work is done. Either way, there are opportunities for growth.

Conclusion

In times of change, there are always opportunities.

When it comes to workplace injuries, environmental impact, the implications of technical failures, political instability and market fluctuations in commodity prices, this industry is more dangerous than most.

South Africa has rich mineral deposits and the mining sector remains a crucial one. But change is needed – not only in how we assess and mitigate risk, but in what we view as a risk. One of the biggest risks to the South African mining industry is whether or not we are ‘future-proof’. Can our minerals, and the way we extract them, continue to be of value?

Innovation is the key to future success in Africa. Technological innovation has the potential to improve productivity, safety and environmental management, as well as offer solutions for skills shortage in the mining industry.

Want to get the latest mining news, insights and analysis? You need AMIQ!

AMIQ tracks over 2 000 projects across Africa. If you want to invest in mining, if you want to invest in Africa, if you provide product or services to mines in Africa, you need AMIQ intel.

Africa Mining IQ has created various analysis reports to provide you with an overview of mining projects in Africa by region, mineral type, and plant type. You can use these reports to analyse growth potential in developing commodity markets and better strategically plan your business development efforts. Africa Mining IQ provides a complete project report for each of the over 1 900 African projects we track, including everything from historical and up to the minute commentaries to contact details for suppliers, engineers and mine owners.

AMIQ has 170 company subscriptions, 20% of which are international. It is becoming easier to do business across the globe. AMIQ is for anyone who supplies a product or provides a service to mines. With key contact details, and being in the know in the early stages of project development, you can build meaningful relationships with the right people and position yourself early for a successful bid for mining projects in Africa. Keep a close eye on developing projects aligned to your business and identify projects, with weekly or monthly alerts. Don’t delay, subscribe to AMIQ today and reap the rewards of comprehensive African mining project intelligence.

Contact Africa Mining IQ today on +27 11 830 2132 to target business opportunities in Africa's growing mining industry!


+ Quick Links


Privacy Policy   Legal Notice   PAI Act   POPI
© Copyright 2019 All right reserved.

Projects IQ - Project Intelligence in Africa