Mining a Mirage Buenos Aires, September 2016 The Future of Extractive Industries in LAC and the Role of STI

2 separate discussions around mining Creation of jobs Technology transfer Health & safety Increased productivity Local content Business opportunities Automation Environment

Shared value paradigm Source: Anglo American (2015), BP (2015)

Past and anticipated productivity gains

Potential impacts of technology on employment 1.Autonomous Haul Trucks and Loaders 2. Autonomous Long Distance Haul-Trains 3.Tele-remote Ship-Loaders 4.Semi-autonomous Crushers/Shovel Swings/Rock Breakers 5.Automated Drilling Systems 6.Automated Dragline/Long-wall Plough and Shearers/Earth Moving Systems 7.Geographic Information Systems and GPS 8.Autonomous Equipment Monitoring 9.Programmable Logic Controllers 10.Control Systems

What will determine technology role-out? Cost of labor Labor skills Search for higher safety Policy instruments to mitigate unemployment Union & government resistance

High-Income OECD Country Lower-middle-income Country

Employment scenarios (direct & indirect) High-Income OECD Country Lower-Middle-Income Country 3,388 2,372 1,694 1,016 5,100 3,570 2,550 1,530 0% 30% 50% 70%

Impacts of automation on GDP High-Income OECD Country Lower-Middle-Income Country

GDP impacts with multipliers

Impacts of automation on revenues High-Income OECD Country Lower-Middle-Income Country

Conclusions Host countries at risk of reduced socioeconomic benefits from mining, particularly: At the local local level If highly reliant on personal income taxes for revenue generation If the country supplies low-tech goods and services to the mining industry The impacts will be felt at the national level in countries which are highly reliant on the extractives sector. Countries with a ’skill gap’ will find it harder at filling the high-tech job and procurement opportunities created by automation.

Will technology change lead to a reweighting of the shared-value paradigm?

Thank You! Nicolas Maennling www.ccsi.columbia.edu Email: nmaenn@law.columbia.edu Twitter: @nmaennling