The modern mine: How digitization is transforming industry from pit to port

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Original Article was promoted by CNBC on June 22, 2018

A recent paper from the World Economic Forum and Accenture estimates digitization could bring more than $425 billion of value for the mining industry, customers, society and environment over the next 10 years (to 2025). With opportunities this lucrative, it’s vital not to be left behind.

Mining has traditionally been slow to adopt new technologies due to the scale and complexity of its operations, and the heavy costs that come with change. And, they’re not doing a lot with the digitization that already exists — according to McKinsey and Company — in some cases, miners use less than 1 percent of the data collected from their equipment.

With many other industries already embracing the digital revolution, mining has recognized the potential of digital and technology innovations that could transform and invigorate the industry and is starting to more quickly catch up.

Smart digitization can help to break down operational silos of the supply chain. This end-to-end visibility enables better decision-making, increases asset reliability, and improves people and process efficiency. These advantages are impossible for any future-facing company to resist.

How do you start to transform such a massive industry with such long-range project life cycles?

Integrated supply chains for pit-to-port visibility

Historically, mining operations have been broken down into individual operating silos, with minimal integration between mine, processing and transport. Bringing these elements of the supply chain together presents the biggest scope for change and in turn, the biggest opportunity to find new efficiencies and drive results.

Digitization enables a full, broad picture of the pit-to-port supply chain, providing a holistic view of the entire operation. Data collected can be analyzed to identify production issues, manage inventory and quality, track production and asset performance and understand costs.

Supply chain management can help interpret the data to plan, schedule and optimize operations to maximize profit — in fact, integrating supply chains can mean improving efficiency by as much as 20 percent.

Roy Hill, one of the largest iron ore mines in Australia, has turned its entire work-flow on its head. It has a process plant in the Pilbara region, a heavy-haul rail system from mine to port, new port facilities in Port Headland and a Remote Operations Center in Perth. Its entire operation is massive in both scale and proximity.

Digitization meant it could step back and reassess the entire operation, “It enabled us to rethink how we would run an end-to-end mining business and do that in a way that has never been realized before,” said Michael Lommon, Roy Hill’s General Manager of Demand Chains.

They worked with Schneider Electric to implement EcoStruxure for Mining, their IoT-based platform, to help consolidate their operational visibility and optimize their mining value chain. The solution streamlines demand chain planning, inventory tracking, quality management, and capacity simulation, among other capabilities.

“In reality, what this means is that rather than operating in silos, such as pit, rail and port, we operated across the business,” said Christine Erikson, the Program Director of Automation, “and it’s so important because you become more reliant on how you collaborate to get things done.”

Improved efficiency leads to millions in annual savings

Equipment performance has significant repercussions, especially when you consider that the cost of having an excavator go down in the field is $5 million a day, while the cost of losing a haul truck is $1.8 million per day. This is where sound asset analysis can make a massive financial impact.

Having the best condition monitoring and predictive analysis of assets can help identify early warning signs, and a solid management system can work to make sure equipment is as up-to-date as necessary, ensuring efficiency across the entire asset portfolio.

MMG limited, one of the world’s most respected diversified base metals companies, worked with Schneider to establish an asset utilization solution to measure all production and time losses, including loss of sales, against calendar time.

“We needed a solution flexible enough to adapt to the local operating conditions of each mine, while also providing us with standardized asset utilization data that we could analyze in real-time,” said Mark Dwyer, Business Technology Manager at MMG Limited.

“We had to have the capability to drill-down to the root cause of any equipment asset that was exhibiting less than perfect utilization. The new system and processes had to drive continuous improvement through the business, be readily accepted by users everywhere, and this had to be achieved in a single sign-on environment compatible with our existing systems.”

And the results were staggering. The asset utilization project at two of their mines achieved a 10 to 20 percent capacity improvement. They are now operating at 12 percent and 34 percent above nameplate capacity, respectively, producing an additional 29,422 tons of copper compared to the year before the solution was implemented.

More digitization, higher yield

Beyond supply chains and asset analysis, digitization optimizes complex systems which can lead to higher production yields. For example, by using advanced software solutions for process optimization a nickel smelter in Canada achieved the equivalent of a $20,000 a day higher yield across two furnaces.

Digitization, automation and new technologies give operators and technicians immediate access to important performance, condition and technical information. Having this kind of critical data at your fingertips speeds up decision-making, troubleshooting, and performance efficiency.

Empowering the next-generation workforce

Furthermore, digitization also brings safer working conditions, promotes collaboration between teams and increases job appeal for a new generation of workers. Workforces are being empowered by technology with an increase in training, testing and process simulation using life-like 3D environments — which are both safer and more engaging than traditional on-site methods.

A study conducted by the University of Colorado Denver Business School concluded that simulation provides a 9 percent higher retention rate than traditional learning processes. Technology is certainly playing a vital role in attracting new talent and closing the current skill gap within the industry. 

Reaping rewards of future innovation

There is no doubt, the future of mining is digital. Mines must become more agile and future-facing — ready for the new technologies that will continue to transform the sector for decades to come.

“Of all the trends impacting the industry, none will be as critical as digitization. It will impact every aspect of the industrial operation and provide the greatest potential for improving business and operational efficiency,” said Rob Moffitt, president of the Mining, Minerals & Metals segment at Schneider Electric.

“The rewards are significant for those willing to try,” he adds. “It’s been estimated that in the next five years, mining industry leaders will achieve their most significant improvements by embracing digital technologies like the IoT (Internet of Things) and advanced analytics that can harness the power of big data.”

And with rapid advances in AI, automation, and innovations like x-ray diffraction and electric vehicles all on the horizon, the mining sector is catching up to the technological revolution fast. It’s clear that digitization of mining is no longer a choice, but an imperative.

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