Digitalization of Mining to Weather Future Storms
By Anuradha Ramanathan
June 19, 2020 - Mining is no stranger to digitalization. The widely held perception of the resources industry is one of workers in mines and not one of machines running almost everything.
But technological advances have already resulted in adoption of mechanisation, automation and data-driven production optimization.
Companies such as BHP, Anglo American and Rio Tinto have embraced digitalization to gain a competitive advantage, mitigate risk and improve performance. They use advanced data analytics, virtual reality and artificial intelligence to reduce costs and increase efficiency in their processes, leading to enhanced ore recovery and less waste, to name a couple of benefits.
But the Covid-19 pandemic has shown that digitalization can contribute much more.
The health crisis and rapid adoption of homeworking has reinforced the need to build resilience into the system, using clear aggregated data sets accelerated by a digital transformation. There is now an opportunity to reset legacy systems and outdated processes.
“The global pandemic has shown that automation and digital operations can do more than reduce costs and drive efficiencies,” PwC states in its Mine 2020 report, published in June.
“Miners operating remotely or autonomously have found that technology also helps to manage the risks and impacts of Covid-19. They can better support remote workforces, reduce on-site presence, and monitor and control operations from outside the mine site.”
The mining sector, associated firms and technology providers are looking to develop pilot projects aligned to individual companies’ workflows.
For example, lubricants supplier Shell and technology company IBM yesterday launched a global business-to-business digital mining services marketplace platform — called Oren — “to accelerate the digitization of the mining industry, speed up the transformation of mining workflows and build in more operational resiliency in a rapidly changing world”.
Last month, BHP’s acting chief technology officer, Rag Udd, announced the launch of “digital factories” in Brisbane, Australia, that will use cloud technologies for rapid digital development, and highlighted their implementation at the Caval Ridge coal mine.
After 12 months of data collection and the creation of an algorithm, the company improved the yield from this plant in the digital factory trial, increasing productivity and output in a low-cost manner.
Although some raise concerns over higher cybersecurity threats from greater use of technology in the core business, the benefits outweigh the risks. PwC also cautioned that mining firms must “strike a balance” between accelerating digital implementation and supporting local communities that depend on employment.
“To get this right, [mining companies] will need to overcome the legacy of their operations, which are often broken down into individual operating silos, with ineffective integration between mine, processing and transport,” DuPont Sustainable Solutions’ principal, Marco Pagnini, says.
From a wholesale market and trading perspective, clear and robust data is likely to bring further transparency into the supply chain. Mine and output optimization also means companies are likely to be able to respond to demand fluctuations and ease any supply shocks, creating real-time adjustments and price responsiveness.
The advantages are many and the risks deemed manageable. With the mining industry embarking on a path to a digital future, the only question remains the speed of adoption.