JOHANNESBURG (miningweekly.com) – The increased efficiencies achieved by AI are ensuring that even lower quality operations are kept going for longer which benefits all stakeholders, Thungela Resources CEO Moses Madondo made clear to Coal & Energy Transition Day attendees on Wednesday, July 22.

Madondo did so in response to mining luminary and event chairperson Bernard Swanepoel drawing attention to the propensity of CEOs announcing the number of people that they were laying off because of the benefits of AI and asking about the prospect of AI reducing coal mining workforces.

“It's always been a confused conversation. I think we like to pronounce on things because it's a nice sound bite. It scares everyone that AI is going to replace people's jobs. You can go back to the conversations last ten years.

“People are revisiting those conversations because with all technology development, that story always arises. But all technology development grows economies and industries and creates more jobs, and that's the nature of the beast.

“Even for us, where we're using AI, we're getting more efficiencies, ensures we keep even our lower quality operations going longer. So, all of us take advantage of the opportunities that technology provides, and that's how we should think about it,” Madondo emphasised at the event covered by Mining Weekly. (Also watch attached Creamer Media video.)

In response to Swanepoel’s earlier question on the extent of employee and community “ownership” and say in Thungela, Madondo explained that all stakeholders affected by the business “own” the business because of their say in it.

“We obviously want them to benefit, so all of us, and more importantly, our employees, who are the core of the business and really make the business work, of course, have a stake in it.”

Regarding the world moving towards lower coal use for electricity generation, and even South Africa planning to reduce its dependence on coal over time, Madondo was asked how Thungela was adapting to that structural shift.

“I think the policy environment in South Africa needs to get a lot more congruent about what our own objective as a country is and probably focus on that.

“None of us is in disagreement about decarbonisation. It's the pathway of how we do that that’s important. We should decarbonise in a manner that ensures that our people get jobs, create value for our people. At Thungela, we look at what the world demands and needs from coal and those demands and needs are growing and they are sustained. And certainly, in the developing world, it continues to be that obvious,” Madondo responded.

Accenture Mining Africa head Allen Makamure, who served as co-chairperson, questioned Madondo on Thungela's deliberate choice to remain a pure play coal company, while others have been hedging and diversifying.

“You have been in the CEO role for a year. What have you seen that confirms this conviction, and what, if anything, has tested it?” Makamure asked.

“You’re starting from where we were probably ages ago to where we are today. I think we're a lot further down the road, in a better space in terms of where the conversation is landing, maybe helped by other global events that have helped to change the narrative.

“Thungela has been around now five years and has established a business that is looking good and doing some good work, not only in the communities where we serve, but also through environmentally responsible good stewardship as a coal business, and we continue to make positive impact.

We still own largely only coal mining operations. We are busy with a gas project now in Lephalale, which we are excited about. Here is the reality: Thungela has never said that they’re not looking at any other opportunities. We've always said that we’re about creating value for shareholders and for stakeholders, and that value has us choosing very carefully assets that are very accretive and very generative. Of course, we happen to have those, and they are in coal and we continue to realise value for shareholders and build those. But that pure play position has served us very well in creating value for shareholders.

Regarding coal’s cost price or demand curve at which Thungela’s coal thesis would cease to work, Madondo pointed out that the coal peak that was called seven years ago failed to materialise and that all mining companies exist to meet demand requirements. “In our case, it’s coal, and creating value out of doing that process. What we've seen is that commodities like coal are cyclical, and now and then you get events that again bring to the fore the importance of coal and why coal is required from an energy security point of view. Taking those two points into account, it seems obvious that we're still going to be around in coal for a long while, which is why we continue to be invested in it.”