Study says miners need to grow up digitally
Very few miners are adopting a holistic digital strategy, instead opting for purely functional and siloed improvements, a study has found.
Noel Dyson*
01 JUNE 201801/06/2018commentsshareEY, in its Digital mining: the next wave of business transformation report, found miners were making headway in using digital technology effectively to improve productivity. The problem is, miners lag behind just about everybody else, when it comes to adopting digital technology across the entire business.
The report also identified 60 key digital themes and initiatives across the sector, though it found few examples of a clear, integrated and business-wide approach to integrate digital initiatives.
RESOURCEStocks Q&A: John Mair, Greenland Minerals and...
SPONSOREDGreenland minerals and energy
Southern Silver keeps hitting goals
SPONSOREDSouthern silver exploration corp
Kin lays the foundations for Growth
SPONSOREDKin mining nl
RESOURCEStocks Q&A: Christian Easterday, Hot Chili...
SPONSOREDHot chili limited
MICROMINE to issue latest version of 3D modelling &...
SPONSOREDMicromine
Alt sees new fizz in Bottle Creek
SPONSOREDAlt resources
Capricorn moves fast to launch
SPONSOREDCapricorn metals
Kingston commences major drilling program at 2.8Moz...
SPONSOREDKingston resources
SPONSOREDMetals x
Country Investment Profile - Greenland
SPONSOREDMinistry of mineral resources greenland
Companies such as Rio Tinto, BHP and Fortescue Metals Group have gone heavily into autonomous haulage, however, the EY report considers that just a siloed business improvement.
EY Global Mining & Metals advisory leader Paul Mitchell said mining continued to lag other sectors in the realm of digital effectiveness.
"The value from digital will only be realised when companies change how they work, rather than succumbing to the lure of individual technology programs and pursuing local optimisation, which is not necessarily transformational," he said.
"While a revolutionary approach to digital would be too disruptive, we believe mining companies should adopt a progressive, multi-year strategy that also accounts for business risk and the primary drivers of value."
EY suggests "waves" of digital change to move a business to a higher digital plane.
It breaks the process into four parts:
Digital pre-start, building out connectivity to prepare for digital transformation that typically involves investment in infrastructure, communications and data;Wave 1, which covers activities focusing on productivity or performance improvement and are typically operated with a single function. At this stage digital can enable a mining operation to manage inherent variability and move toward manufacturing levels of productivity;Wave 2, covering broader activities that span the whole value chain and include initiatives to better manage margin through interactions with customers and suppliers; andWave 3, a stage that refers to the rise of disruptive factors that may create significant changes in how the sector operates and may require a step change in business strategy."We see the end-state vision for the mining sector as constantly changing and businesses will need to be ready to adapt and change course as required," Mitchell said.
"And while we don't believe the sector will see radical disruption, the opportunity for new entrants to disrupt existing players poses a real threat.
"Market leadership can be lost quickly if dominant players respond slowly or ineffectively to industry disruption and external changes.
"However, the pathway through the waves of digital transformation should not be viewed as inflexibly sequential or static."
The report points out that as automation increases through Waves 1-3, mining companies will need to change the way they work.
This is already being seen in mining operations that have adopted autonomous haulage.
FMG, for example, put in place a series of programs to help those truck drivers that would have their jobs removed to find alternative work with the company.
"The introduction of greater levels of automation will likely lead to a shift in workforce demographics and the skillsets required across the sector," Mitchell said.
"This presents an opportunity for mining businesses to retrain employees and restructure their organisations to pivot the focus of work away from manual tasks and toward improved decision-making and efficiency of execution."
*Noel Dyson is editor of www.miningmonthly.com