IS THE SOUTH AFRICAN MINING INDUSTRY SEEING CHANGE THROUGH INNOVATION? February 2017

By HERMAN VAN SCHALKWYK AND JAMES GERBER, Published in Mining Feature

It is well-known that despite positive efforts by mining companies to reduce costs and focus on profitable production, the mining industry in South Africa continues to face a number of challenges due to subdued commodity prices and an ever-increasing cost base. South African mining companies face unique socio-economic and labour challenges which are putting even greater pressure on profit margins.

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The Q3 2016 South African Mining Industry Report by BMI indicated that South Africa has the highest cost of labour as a ratio to total costs compared with countries such as the United States and Australia. This may partly be due to costs resulting from the difficulties associated with deep level mining operations in South Africa's gold and platinum mines. The gold, platinum and chrome mines are known for their great depths and their narrow, hard reefs.

The challenges of these deep-level operations are that the mines are exposed to increased seismic stress and activity, miners are exposed to harsh working conditions due to higher temperatures and it is a logistical nightmare and time-consuming exercise simply to reach the rock face. It is, therefore, understandable why South African companies have more expensive workforces that face greater safety risks, which naturally erode productivity and profitability. While there is almost no control over commodity prices, in order for deep level mining to remain profitable, mining operations will have to improve through innovation.

Modernisation of the South African mining industry through innovation would ideally involve mining the country's mineral resources in a safe, efficient, cost-effective and sustainable way. One of the obvious improvements is the mechanisation and automation of deep level mining operations, which have for the past century or so been labour intensive and founded on a manual mining methodology. As the mines become progressively deeper, conventional, labour-intensive mining methods create working environments in which it is unsafe for miners to operate. Through innovation, machinery would be able to access areas inaccessible to miners and simultaneously save on labour related costs. At the same time, costs can be reduced in other ways, such as reduced ventilation requirements but, most importantly, mechanised operations would improve the safety of workers dramatically as they are removed from the rock face.

So, are we seeing innovative improvements being implemented within the mining industry? Considering that the ideology behind the patent system is to encourage the improvement of technology by granting a monopoly for the exclusive commercial exploitation of the improvement by the patent holder, one would hope and expect to see new technologies emerging through the patent system to address the challenges faced by the mining industry.

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Based on the nature of inventions described in patent applications that are being filed, the first aspect of mining that is seeing change is the mining methodology itself which, for the best part of the past few decades, has seen very little improvement through innovation. Recent trends seem to indicate that improvements are reshaping operations throughout the process from mapping of reefs, development of shafts, fragmentation of the rock material to haulage of the broken material. These improvements are predominantly driven by a need for a continuous mining process in which stoppages are cut to the minimum, or even eliminated completely, in order to increase levels of productivity considerably.

In conventional mining techniques, the process typically starts at the stope face and includes reinforcing the hanging wall using rock bolts. This forms an integral part of overall underground safety. In view of the significant number of rock bolts used underground on a daily basis, they are an obvious target of innovation in attempts to improve efficiency of the mining process. As a result, the rock bolt has seen incremental developments that have largely been aimed at reducing installation times. One type of rock bolt that seems to be enjoying renewed focus of inventors is the self-drilling rock bolt. As its name suggests, this type of rock bolt negates the necessity of drilling a hole and then inserting a rock bolt in two discreet steps. A self-drilling rock bolt typically carries a drill bit and has a hollow body through which a grout resin can be pumped, thereby allowing simultaneous drilling of the hole and installation of the rock bolt. Although simple in design, the self-drilling rock bolt is a good example of innovation directed at reducing down-time even before the actual step of fragmenting rock has started.

Moving on to the step of fragmenting rock, the automation and mechanisation of the fragmentation phase in South African platinum and gold mining face a unique challenge in the form of particularly narrow and hard reefs. It is for this reason that traditional drilling and blasting techniques to fragment the rock have survived for so long. However, recent developments seems to suggest that mining companies are looking to alternative ways of fracturing rock material. An example of an innovative fragmentation technology is a patented thermal fragmentation process. The process summarily minimises the dilution (mixing of mineral rich rock with commercially worthless rock) of the mineral being mined by providing a blast- free method that removes only the mineral-rich rock in a narrow vein by spalling (breaking) the rock into fragments before recapturing the fragments to be hauled out of the mine.

Continuous mining also demands innovative improvements in material- handling systems. Caterpillar appears to have seen the opportunity to combine fragmenting and hauling of material for a continuous mining process. The company claims that its Cat® Rock Straight System is the first commercial continuous mining and hauling system for underground hard rock applications. This systems delivers simultaneous cutting, loading and hauling and is controlled by its Cat longwall automation system. This is merely one example of new technology emerging from Caterpillar. In recent years they have filed a number of patent applications for inventions aimed at autonomous hauling systems and methods. An example can be found in a patent application entitled "System and Method for Controlling a Machine", which describes a system to control a machine during an autonomous material moving operation and includes a terrain sensing system, a position sensing system and a ground engaging work implement.

As in the commercial automotive industry, the mining industry is seeing significant strides towards implementing fully autonomous vehicles. Although the idea of using autonomous vehicles in the mining industry is nothing new, there have been significant advancements as a result of recent improved technology. An example of this can be found in the new technology embedded in Load-haul dumpers (LHDs) used to haul ore from the rock face to an underground collection point for the ore to be transported to the surface. At present there are mines around the world implementing driver- less LHDs that automatically move up to a draw point and, once the ore has been scooped up, move off to the collection point. The driverless LHDs are typically controlled by central control systems that direct their movement and operations.

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In fact, fully autonomous vehicles are not the only example of the interface where commercial technology and the mining industry meet. Wearable technology is starting to make its way into the mining industry. Although these developments are largely driven by improved safety standards, and the moral obligations of mining companies to provide safe working conditions, improvements in safety as a result of innovative improvements may even see an increase in profitability of mining operations as a result of reduced down-time.

An example of wearable technology in the mining industry is SmartCapTM, which is a piece of headwear in the form of a cap, hat, beanie, headband or other headwear variant that is fitted with a removable sensor for reading and processing the wearer's electrical brain activity (EEG) to determine the wearer's level of fatigue. In one application, the headwear communicates wirelessly to a display mounted inside the cab of a heavy vehicle. According to their website, the SmartCapTM is trusted by mining companies such as Rio Tinto, Anglo American and BHP Billiton.

Although these examples of innovation taking place within the international mining industry are encouraging, patent records seem to suggest that inventions do not necessarily make their way into the South African mining industry. By way of example, a 2015 report entitled "The Australian Mining Industry: More Than Just Shovels and Being the Lucky Country" reported that inventors in the mining industry are located primarily in Germany, Japan and Australia. The report indicated that out of a total of 4159 international applications filed under the Patent Cooperation Treaty (PCT), 537 originated from Australia. It further indicated that only 37 of these inventions were ultimately patented in South Africa.

Another interesting observation from patent records, and perhaps a contributing reason as to why inventions do not necessarily find their way into mining operations, is that few of the inventions are actually made by mining companies. Instead, the majority of the inventions are made by suppliers to the mining companies. This merely adds a level of complexity to the existing challenges within the mining industry considering that license agreements and the resulting royalties have to be factored into the equation. The complexity of a mining operation would typically dictate that the adoption of a new technology is a long term commitment that is not easily reversible, thereby contributing to the longevity of license agreements. However, the effect of royalties on the bottom line is not a significant obstacle to the modernisation of South African mining operations.

Within the South African context it is unlikely that the technology required for full automation and mechanisation of deep level mining operations will enter the mining industry in the foreseeable future. Although there are advantages to fully mechanised operations, the focus should perhaps be directed at finding innovative solutions that would see all stakeholders within the sector profiting instead of focussing on innovation at a production level.

A possible counter to the socio-economic effects of mechanisation that has been suggested is to focus on the development of the secondary sector around mining operations. By focussing on finding innovative solutions within both the primary and secondary sectors in addition to introducing innovative products and systems, South Africa stands to gain from innovation taking place within the mining industry.

Van Schalkwyk is a Partner and Gerber a Candidate Attorney with Spoor & Fisher.