Study the article below and based on the motivation for a new study at the end of the article below, answer the

following questions.

South African miners still finding their feet on their digital journeys

$12$TH APRIL $2023$

BY MARENY ARNOLDI

Professional services firm PwC has confirmed in the second edition of its 'State of Digital Transformation in the South African

Mining Industry: Ten Insights into the Fourth Industrial Revolution $(4$IR$)2023\text{'}$ report that all CEOs are driving the digital

agenda, with digital solutions being embedded in every initiative.

Since the first edition of the report in $2021,$ miners have distinctly moved from pondering the $$why$$ in terms of digital

transformation to the $$how$$ and the $$what$,$ which is encouraging to see, especially since mining is often viewed as a laggard in

adopting $4$IR and digitalisation.

To determine the implications of digital transformation on South African mining, the firm gathered insights from CEOs, senior

leaders, organised labour, and graduates from $20$ organisations. In the latest report, PwC identifies four categories of digital maturity, namely the digital novice, digital follower, digital innovator, and digital champion, which range from those starting to

see the value of $4$IR technologies in silos without having embedded it into their strategies through to those mastering

connected digital ecosystems.

Most companies currently find themselves in the digital follower category, at $56\%,$ followed by digital innovators comprising

$36\%,$ digital champions comprising $8\%$ and digital novices comprising $13\%$ of respondents.

While all respondents confirmed they are on a digital journey and are leveraging technology in this regard, the programmes

are at varying levels of maturity along the value chain. These variations are typically driven by the type of mining operation

and technology above ground being easier to access than underground. The complexity of integrating new technologies into

legacy systems has forced miners to identify new revenue models and leverage existing infrastructure.

Another big insight PwC has gathered is that technology is being applied where it has the greatest measurable benefit. Key

drivers to consider when going digital in mining include issues with legacy systems, as older mines sometimes struggle with

digital transformation, the fact that new mines can be designed with digital in mind upfront, lack of qualified resources and

resistance from the workforce to change.

To this end, miners are focusing on integrated reporting, integrated mine planning, logistics automation, digitally optimised

supply chains, integrated source$-$to$-$pay and finance functions, and human resource standardisation, digital training, and skills

development.

Mandela Mining Precinct Real$-$Time Information Management Systems programme manager Jean$-$Jacques Verhaeghe says

the value of digital transformation is evidenced by increased visibility and transparency, by having all stakeholders knowing what is going on$,$ reduction of bureaucracy and the ability to make better decisions.

Digital tools are helping miners move away from historic siloed ways of working, changing the way people think and

empowering people to be successful together. $$We are still, however, defining what value means in a mining operation,$$

Verhaeghe points out.

Another insight, PwC smart mining partner Harmeet Katari points out, is that business priorities have changed but cost is still

king. The hunt for value requires cooperation and compromise, he explains.

Thirty$-$eight per cent of respondents put cost leadership, efficiency, and profitability as their number one concern, with $11\%$

citing it as their number two concern. Overall, business sustainability and longevity is the second$-$highest result with $22\%.$

Although environment, social and governance $($ESG$)$ has not been selected as a first priority, it is present in all respondents$$

decision$-$making. Katari highlights that ESG pillars are often being managed in silos and the application is fragmented, with

$29\%$ of respondents incorporating ESG issues into business risks, $14\%$ viewing ESG as a measure

of sustainable development and $43\%$ of respondents saying ESG is part of the core business strategy and operating model.

The remaining $14\%$ say there is still no common unified standard definition of ESG or its goals.

ESG may be time$-$consuming and costly to undertake, but it will be worth the time, effort, and money in the long run for South

African miners, Katari says, citing the consensus PwC found among respondents.

In terms of what the mining industry needs, PwC smart mining associate director Chrisna Evans says a uniform and

consistent reporting framework is necessary, one developed by the mining industry for the industry.

Some mining houses are more transparent than others, Evans states, with listed companies often using imported frameworks

from the international sphere and adapting it to their needs.

However, resp