The time is right for mining companies globally to move past siloed implementation of new technologies and begin investing in integrated digital solutions capable of automating, optimising and adding intelligence into complex processes to deliver greater control.
The mining sector is under tremendous pressure. Commodity prices continue to stay low and traditional levers to lower costs such as cutting supply contracts, cancelling new projects and reducing overhead headcounts, have been exhausted. This is forcing the usually conservative mining sector to look towards smarter, more sustainable efficiency and productivity gains. For that they need deeper insights and more control – new technologies provide the means to achieve this.
Leading mining companies are using technologies such as Radio-frequency identification (RFID), robotic process automation (RPA), 3D modelling, augmented reality, blockchain, Internet of Things (IoT) and advanced analytics to help them minimise complexity, increase responsiveness and improve control of operations, spend and outcomes. Transformation is a journey, however.
Where to start?
The way forward for mining entities is understanding which initiatives to tackle first. A deciding factor will be the status of a mine—how big it is, where it is located and how established it is as well as how mature its processes are?
A ‘greenfield’ operation can opt for a completely cloud-based, integrated enterprise-operations- and supply chain solution with full collaboration capabilities. A more established mine may look to address key pain points first and achieve broader integration in phases.
A first step for mines is usually to look for proven solutions using mature technologies that can improve critical areas of operation, and corresponding data and analytics to enable preventative maintenance or solutions that support worker safety and security.
However, a futuristic strategy may also include leading and trend setting initiatives that align with the organisation’s risk appetite and competitive drivers.
It’s imperative that mines start now to create and implement a considered strategy.
The IDC Futurescape: Worldwide Mining Predictions 2018 include the following predictions:
In the next three to five years, many of the mining technology solutions currently in proof of concept stage will see mainstream adoption. Mining operations that are not leveraging them will quickly become unsustainable.
Where is the pain?
For mines, there are numerous challenges across the value chain—in legacy enterprise systems, towards ensuring worker safety and securing assets and meeting regulatory requirements. The complexity in the supply chain is, however, possibly the most urgent issue to address and would deliver the greatest return.
To manage production, optimise resources and the supply chain cycles, it is vital for mines to know the quantity of material extracted, its grade and how it compares to planned extraction—i.e., what is the anticipated versus the actual quantity and quality of material extracted and sent.
The complexity lies in managing what is in stockpiles and in the supply chain, ensuring the right quantity and quality of materials are optimally allocated to meet customer needs and optimally distributed. For example, the material of multiple grades from different stockpiles may need to be blended, crushed or otherwise processed to meet customer needs. In addition, loads in transit need to be monitored to ensure they are not degraded by moisture or impacted by other factors.
As few mines are able to establish their own fully connected supply chain to the location of the end customer or a port, joint ventures, government agencies, individual operators and contractors are often involved. To enable this supply chain, systems for handover, financial transactions, assay measurements, etc. are needed.
While there have been many approaches to monitor the movement of material to improve operational efficiency, most mining organisations continue to grapple with reconciling the material moved with what is in source stockpiles and what is loaded onto a container via a truck (or a vessel via a ship loader) or blended to the specific customer contract specifications.
The inefficiencies often start at the source.
Physical verification of run of mine stockpile often by survey methods, introduce delays into the process. Sampling results often do not get adjusted at the source (which works off a planned grade from the mine plan), leading to inaccurate stockpile balances and grade assumptions. Inaccurate results may be applied to a lot or batch of material in transit. And, where there is no traceability of the material to the mining block, an opportunity is missed to provide feedback into the mine planning process and grade control.
The combined effect of time lag, lack of data across the supply chain, manual data capture, inaccurate grade, qualitative assumptions and lack of automation leads to unaccounted losses at the end of fiscal period with possible write-offs of inventory, worth millions of dollars. Regulatory requirements in terms of security of processes, trade data, reporting of movement of materials and payment of royalties cannot be met. In addition, stakeholders cannot be sure that the inventory valuation is accurate.
To mitigate this problem and complexity, consider the following set of strategies.
Technology that integrates, optimises
The transformation strategies of mines are expected to move into high gear over the next three years. For leaders in this segment, proofs of concept are already in advanced stages. For the rest, there is considerable advantage in exploring the value these technologies can offer and creating phased transformation strategies in collaboration with partners and ecosystem stakeholders.
Article written by Sudip Chaudhuri, Global lead for Natural Resources, Wipro Limited
Sudip Kumar Chaudhuri