BDO’S ENERGY 2020 VISION: THE NEAR FUTURE OF MINING CONTENTS EXECUTIVE SUMMARY........................................................... 01 GLOBAL PREDICTIONS ..........................................................02 THE NEAR FUTURE OF MINING IN CANADA ....................08 01 EXECUTIVE SUMMARY Driverless technology, deep-sea internal controls. If not, they risk SUMMARISING BDO’S 4. RENEWABLES: excavations and mining expeditions seeing their entire operation crippled ENERGY 2020 VISION FOR By 2020, renewables will account for on the moon were once just the ideas by a single attack. MINING: one-quarter of the world’s electricity of sci-fi movies. generation as dependence on coal Decreased coal consumption in 1. ROBOTS: wanes. Today, they’re realities or just around China—the world’s largest coal By 2020, robots will replace more the corner. And by 2020, we expect consumer—meanwhile, is slowing than 50 percent of miners, and mining 5. IoT IN MINING: (most of) them to be the norm. global demand for the commodity. As accidents will be cut by 75 percent. Global mining companies leveraging dependence on coal wanes, we expect Half of the miners will themselves Internet-connected sensors and As low commodity prices persist, renewables to account for one-quarter be retrained to run the technology automated drillers in mines will mining companies are under pressure of the world’s electricity generation controlling the robots. decrease their per ton digging costs by to reimagine their business models. by 2020. more than 30 percent. Those that have incorporated 2. EU CONFLICT MINERALS: technology into their operations have Reflecting on this period of transition, Supply chain transparency will take Agree or disagree with our CHARLES DEWHURST seen their revenue streams live on, BDO’s Global Natural Resources team the compliance spotlight for 2020 as predictions? We want to know—reach t: + 1 713-548-0855 while those that haven’t have fallen is looking towards the future to help companies gear up for the European out to us here. short. mining companies anticipate and plan Union’s Conflict Minerals Rule, e: [email protected] CHARLES DEWHURST for the challenges and opportunities effective in 2021. Mining is in the early stages of the Global Natural Resources ahead. We believe that to prepare for Fourth Industrial Revolution, or 3. CYBERSECURITY: Industry Practice Leader success in 2020 and beyond, mining Industry 4.0, and further digitisation By 2020, activist hackers will launch +1 713-548-0855 “We expect renewables companies must strive to become is on the horizon. The value of at least five cyberattacks on mines [email protected] to account for one-quarter “Lean, Green, Digital” machines. harnessing technology is obvious. around the world in Permanent Denial of the world’s electricity Driverless technology increases The global predictions presented in of Service (PDoS) attacks aimed at generation by 2020.” mining output by 15 to 20 percent this report are based on research and eliminating the environmental and while cutting fuel and maintenance collective input from BDO’s Natural social threats they pose. They’ll use costs by 10 to 15 percent and 8 Resources and Mining leaders. In workers’ connected devices to initiate percent, respectively. It also improves addition, the practice leaders from the attacks. mining safety exponentially. At five countries (Australia, Canada, the same time though, these South Africa, the United Kingdom, Internet-connected technologies and the United States) have provided open the mining industry up to predictions for the industry in their new cyberattack vectors that they local markets. must hedge against through proper 02 BDO’S ENERGY 2020 VISION: THE NEAR FUTURE OF MINING GLOBAL PREDICTIONS 03 WHEN ROBOTS RUN THE MINES PREDICTION 1 ROBOTS BY 2020, ROBOTS WILL Robots will be at the forefront of The rise of the robot is not a death Digitisation also promises to reduce REPLACE MORE THAN 50 most mineral extraction by 2020, knell for the mining workforce but safety risks for miners. Not only will PERCENT OF MINERS, AND reducing safety risks for miners, will inevitably lead to a demand for robots assume the most dangerous MINING ACCIDENTS WILL maximising output, and streamlining reskilling. Traditional operational tasks, but they’ll also be key to BE CUT BY 75 PERCENT. costs. By 2020, we predict robots positions—drilling, blasting, and minimising damage if disaster strikes. will replace most miners. Most in driving—will be downsized, but Snake robots and the smart sensors HALF OF THE MINERS WILL the workforce will be retained, but replaced by demand for remote they’re equipped with will be further THEMSELVES BE RETRAINED advances in technology and remote operators and maintenance optimised to capture real-time TO RUN THE TECHNOLOGY mining equipment will transform personnel to create the new version data to predict or quickly identify CONTROLLING THE what that workforce looks like. of the miner. Emerging digital equipment malfunctions and closely ROBOTS. mining jobs—engineers, software track miners’ exact locations and The global mining industry is already developers, and data processing and vitals. With the aid of robots and new well-acquainted with autonomous data analytics specialists—are more technology, the number of mining technology. Self-driving trucks and likely to attract the technologically fatalities will be cut in half by 2020. autonomous drillers and muckers savvy millennial workforce. By are employed onsite at almost Mining is in the early stages of the 2020, mining automation and data every large multinational company’s Fourth Industrial Revolution, or analytics will be key components of mines. “Snake robots”—named Industry 4.0, and further digitisation the curriculum for mining engineers. for their agility—are equipped is just around the corner. with Internet-connected sensors and used to navigate narrow mine shafts and collect data. Drones are also beginning to play a role in mapping the topography of a mine and capturing aerial images of inaccessible areas of the mine to identify possible vulnerabilities and areas of tension. Remote vein miners (RVMs) are being developed to eliminate the need to drill and blast to excavate rock—potentially reducing rock stress that can lead to seismic events. 04 TRANSPARENCY COMBATS CONFLICT PREDICTION 2 EU CONFLICT MINERALS RULE SUPPLY CHAIN The EU’s efforts to stem trade in • The Organisation for Economic TRANSPARENCY WILL minerals that finance armed conflicts Co-Operation and Development TAKE THE COMPLIANCE and terror groups will turn a spotlight (OECD) laid out a five-step SPOTLIGHT FOR 2020 AS on global mining companies’ supply framework for the due diligence COMPANIES GEAR UP FOR chains by 2020. requirements: THE EUROPEAN UNION’S The EU’s Conflict Minerals Regulation, - Create strong company (EU) CONFLICT MINERALS effective in 2021, establishes supply management systems RULE, EFFECTIVE IN 2021. chain due diligence for imports of - Identify and assess supply chain tin, tantalum, tungsten, and gold risk (3TG)—used to produce phones, cars, - Implement a program to and jewellery. The rule aims to ensure respond to such risks European industries use responsibly- sourced minerals, stemming proceeds - Conduct an independent third- that finance armed conflict in high- party audit of supply chain due risk areas. diligence What the rule means for the mining - Submit annual reports on supply chain due diligence. industry: • EU-based 3TG importers and All upstream companies are subject their international supply chain to the due diligence requirements partners—smelters and refiners— when they import—the riskiest will need to update their supply area of the supply chain—as are chain due diligence downstream companies that import metal-stage products. This regulation • Additionally, 3TG importers in the EU will need to identify the will likely create a lowest common smelters and refiners in their denominator effect across the global supply chains, confirm their due mining industry—for EU-based 3TG diligence practices comply, and importers and their international report insufficient supply chain supply chain partners—requiring the due diligence entire industry to put supply chain due diligence at the forefront. 05 HACKTIVISTS TARGET MINES PREDICTION 3 CYBERSECURITY BY 2020, ACTIVIST HACKERS The mining industry is no stranger PDoS attacks are the next generation operating controllers and connected WILL LAUNCH AT LEAST FIVE to environmental scrutiny. of Distributed Denial of Service devices. Damage and disruption to CYBERATTACKS ON MINES Advances in technology have (DDoS) attacks—which temporarily automated equipment could also AROUND THE WORLD IN introduced more sustainable mining disable operations—and aim for jeopardise the safety of workers in PERMANENT DENIAL OF methods, including the emerging permanent destruction. In a PDoS the mines—as many of the systems practice of bioleaching, in which attack, hackers’ goals include in place are designed to monitor and SERVICE (PDOS) ATTACKS companies extract minerals by destroying physical equipment and detect dangerous conditions. AIMED AT ELIMINATING using biological assets instead of structures, disabling services, and/ THE ENVIRONMENTAL AND harmful chemicals. Despite those or wiping out data. For global mining SOCIAL THREATS THEY POSE. advancements, environmental companies in the early stages of THEY’LL USE WORKERS’ concerns persist, including water harnessing big data, losing seismic CONNECTED DEVICES TO and soil