Digitally enabled changes, called the Fourth Industrial Revolution (4IR) – the most profound changes in the past 2 000 years – can boost and reinvigorate the mining and manufacturing industries if they seize the opportunities presented by the digital disruption.

This is one of the views of University of the Witwatersrand professor Brian Armstrong and mining and manufacturing experts who attended the South African 4IR (4IRSA) workshop exploring the impact of the digital revolution on mining and manufacturing.

The changes brought about by the digitalisation of industries, while evoking fear or optimism, must be responded to so that industries can benefit from the changes, rather than being relegated to irrelevance and closure, he says.

The 4IRSA initiative, which was triggered by an open letter on the state of the economy, penned by JSE-listed telecommunications company Telkom CEO Sipho Maseko, is a critical conversation for South Africa because 4IR will affect companies, workers and the economy, says Armstrong.

The 4IRSA initiative, which has been endorsed by Cabinet, aims to develop a national response to the expected changes wrought by the digital disruption of businesses and the economy.

The initiative has scheduled a conference in July and expects to provide policy proposals next year.

The initiative involves most of the relevant government departments, including the departments of Trade and Industry, Science and Technology, Telecommunications and Postal Services and Small Business, as well as private-sector partners, including multinational consultancies and universities.

“The question of the impact of the 4IR and our national response means that we must seek the broadest input and involvement from across the economy’s sectors and political and social structures.”

The “disconnected and divergent” discussions will move towards a common discourse, but the broad changes to the economy, employment and productive sectors mean that it is critical that as many voices are involved as possible, he explains.

While the 4IR is already transforming industries, there are extreme views and projections about its impact and what the digital revolution will lead to in the future.

Broad-based input will lead to extreme views being tempered, including by methodical approaches, thereby helping to ensure that the policies produced from the 4IRSA initiative are fact based, yet alive to all concerns.

“Only when we have facts can we have a sensible dialogue. While the focus is often on the technology, the impact of the technological changes on businesses and society must be considered in a government-supported framework for discussions,” he avers.

Digitally connected and integrated mineral supply chains can provide cost savings of up to 40% for the commodities industry and help to improve the competitiveness of the local mining and manufacturing sectors, details mining industry organisation Minerals Council South Africa chief economist Henk Langenhoven.

The main savings that can be achieved are more predictable input costs, which is particularly relevant to the downstream industries of mining, including resource beneficiation and primary manufacturing.

Better visibility of the supply chain and demand, enabled by better and more continuous information flows afforded by connected value chains – one of the hallmarks of 4IR – will also enable producers to determine the extent of the demand for their products locally and how much to export.

“A prime reason why South Africa does not effectively capitalise on its manganese reserves, as an example, is [that] the refiners cannot afford the local electricity costs, leading to manganese being exported, refined and then imported again,” say Langenhoven.

If the mining and manufacturing industries do not use new techniques, such as those developed by Russian aluminium multinational Rusal, then their international competitiveness and the economic viability of local beneficiation will become questionable.

However, technical solutions and investments in industries are only part of the solutions to the difficulties facing these industries. Stability, predictability and cost management are crucial to trigger and sustain investment in industries.

Better visibility and predictability of upstream supply and downstream demand will provide more information for good business decisions, including cost containment and management, says Langenhoven.