A lot more automation, a lot less humans to hit the mining industry
Despite benefits such as more efficiency and less human-triggered accidents that the use of automation in mining has brought to the sector in the past five years, local communities and governments are set to lose jobs and tax revenues because of these emerging technologies, a new report shows.
Countries where companies are rapidly adopting such technologies are at risk of getting less benefits from mining, says study.
According to a study to be released Thursday in Geneva, countries where miners are rapidly adopting new technologies, such as self-driving trucks, will be increasingly at risk of reduced socioeconomic benefits from mining in the near and medium terms.
“The impacts will be primarily in terms of lost local employment and personal income tax revenue, but will also come from reduced employment-related local procurement,” says lead author Aaron Cosbey, a development economist at the International Institute for Sustainable Development (IISD).
The report argues that while the concept of “shared value” has become key for mining companies, it should also be a core concept to ensure that resource-rich countries gain the maximum benefit from the extraction of their resources. This, says the document, while ensuring that the private sector has a legitimate opportunity to extract the resources on a for-profit basis.
“Much of the social licence to operate depends on the degree to which the shared value proposition holds true,” said Jeff Geipel, who leads the Mining Shared Value initiative at Engineers Without Borders (EWB).
The report also says that job losses will hit sooner and in greater numbers in developed countries where labour costs are higher and where mining companies typically purchase a larger percentage of their goods and services locally.
Social and economic impacts, however, could be much more significant in developing countries.
“Mining typically makes up a larger component of the national economy in developing countries,” says Perrine Toledano, head of extractive industries at the Columbia Center on Sustainable Investment (CCSI).
“Automation also shifts a mine’s labour needs to more high-skilled workers, which will exacerbate the problem of employing foreign workers. Developing countries also have fewer resources to help them adapt to these changes,” Toledano notes.
The “Mining a Mirage” report, to be presented at the Annual General Meeting of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development in Geneva, analyzes procurement data supplied by two mining companies with annual expenditures exceeding $600 million.