Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Canada’s Barrick Gold (TSX, NYSE:ABX), the world’s most valuable producer of the precious metal, has signed a deal with Cisco Systems Inc. for a “digital reinvention” of its global mining operations, which is set to begin with the Cortez mine in Nevada.
The plan is to apply the latest technology available to cut costs and bring additional value out of existing operations, Barrick said in a statement.
Flow of real-time data would help Barrick, among others, adjust mine plans to changing conditions such as prices, weather or ore grades change almost immediately.
The company cited as an example how the flow of real-time data could help predict when equipment is likely to need maintenance. The new applications should also help Barrick adjust mine plans to changing conditions such as prices, weather or ore grades change almost immediately.
The partnership will increase cash flow over the long term while reducing environmental impact and increasing transparency with governments and communities, Barrick executive chairman, John Thornton, said in the statement.
“We mean to create value and push the boundaries of our industry in entirely new ways,” he said.
In Cortez mine, in particular, Barrick and Cisco will work on automating equipment for increased productivity, while predictive algorithms will enhance the precision and speed of maintenance and metallurgy. The goal at the Nevada mine is to redefine best-in-class mining, the company said.
Building on the Cortez mine digitization experience, Cisco will support Barrick as it transforms its entire business over time-bringing digital technology to all of its mines as well as to its head office.
Here’s how Barrick and Cisco plan to do it:
Comments
mijanko
I migrated from a manufacturing company to a miner and believe many of the challenges faced by miners bear similarities to those faced in the Engineering to Manufacturing processes which I saw started to be addressed in revolutionary ways in the 1980s.
I saw Bills of Materials creation automated, “Burn Geometry” files for CNC Flame Cutting created automatically from the Engineering CAD files, plant routing automation and feedback, part procurement, warehouse picking and more all automated based on the initial product marketing specification.
While this works differently in a mining company, there are similarities. It is this type of commitment to excellence and a vision to make it happen which led to the success in manufacturing.
I am encouraged to see Barrick doing this. They might not understand every benefit at this point, but they know it will be largely beneficial and I suspect many will move to follow.