(As originally published in Canadian Mining Journal, May 2017)
A digital route towards the future of mining
By: Theophile Yameogo, EY Canada’s Mining & Metals Advisory Leader
Despite recent improvements in cost reduction and labour productivity in the mining sector, productivity is still lagging. In order to reduce variability, enable flexibility, improve throughput and optimize cost, companies need to embed sustainable loss elimination practices and an integrated end-to-end approach. That is the pivotal role digital mining will play in the coming years, according to EY’s recent report: How do you prepare for tomorrow’s mine today? In fact, despite the booms and busts in the industry, the nature of mining has stayed virtually the same for decades. Making real gains in productivity demands rethinking how the sector works.
Rather than just adopting new technologies to improve processes, mining companies should be preparing for the future now by looking to digital mining as a major enabler of productivity and effective loss elimination. Aligning digital investments to productivity outcomes will also improve decision-making and allow variability in the sector to be better managed.
Warming up to technology
Until recently, miners have been skeptical of digitization, struggling to connect it meaningfully to their industry’s unique challenges and circumstances. Fortunately, that’s changing. More and more mining leaders are starting to recognize that digital mining can provide opportunities for meaningful data collection, agile analysis to enhance asset management, improve reliability, drive consistency and introduce better predictive capabilities.
From life of mine planning to daily execution of an operator’s tasks, digitization will provide relevant and on-time information to the appropriate decision-maker. Just as digitization has transformed our daily lives, it will trigger metamorphosis in the mining industry when done right: advanced exploration techniques, improved capital project design and execution, real-time mine execution, cost tracking, health and safety monitoring, remote operations, automation and autonomous assets, trading, etc.
Going forward, successful mining companies will be those using digital mining to enhance operation strategies and take advantage of data as quickly as possible. After all, mines are variable but the operating strategies used throughout them often stay consistent. While there is no silver bullet to remove variability entirely, digitization can reduce it to a more manageable level, so companies can truly understand the optimal rate in operating any part of the mining value chain and support processes. It will also equip the companies with flexible and scalable levers to adjust operations in challenging or opportunistic environments such as commodity price uptrend or downtrend.
Learning from others in asset management
Digital mining can substantially improve the way we perform asset management. For example, most mining companies pull trucks off the road periodically for maintenance; in the control environment of the digital future, technologies will provide the data needed to implement predictive strategies that would pre-empt vehicle breakdowns. Not only will this extend the maintenance window for trucks, it will also allow miners to increase throughput while taking less risk around the performance of their fleets.
One potential answer could be to follow the lead of manufacturers who are recognized as leaders in asset productivity. By focusing on the elimination of loss, manufacturing has enhanced output and created value. In a similar way, by moving along a path towards “digital mining,” the mining sector can focus technology on productivity while addressing variability.
Technology is already making it easier to access and analyze reliable data critical to business decision-making. It also has the potential to unlock novel ways of managing variability to boost productivity. For the mining sector, digitization can combine such technology along with capable human resources and an end-to-end process model to disrupt the old ways. By leveraging digital tools and capabilities now, and by prioritizing a digital strategy, mining companies can turn industry challenges into business opportunities.
Watch for EY’s forthcoming report on the potential benefits of digital transformation in the mining sector.