Top Five Things Mining Companies Need To Know About Digital Transformation

The past decade has been one of worst eras in the history of the mining industry. Productivity has fallen 28%. Average ore grades have consistently declined—copper by as much as 25% – and the top 40 mining companies in the world have lost 40% in market capitalization.

By contrast, the worst 10 years of mining were arguably the best in tech. At their peak in 2010, the world’s top 40 mining companies had a combined market capitalization of $1.6 trillion, equating to only 60% of the top five tech companies’ $2.75 trillion.

But while the tech industry has made strides in solving problems of convenience, industrial companies face the challenge of solving problems of consequence. For example, when Netflix goes down, viewers are inconvenienced. But when a mining company halts operations because a critical piece of equipment goes down, it can cripple the company in the near term and contribute to the erosion of a once-thriving industry.

There is hope: industrial companies stand to benefit from technology advancements that digitally transform their organizations to increase productivity, reliability, safety and security.

The value to be extracted for mining companies is significant. The World Economic Forum estimates the industrial internet of things (IIoT) will generate more than $400 billion in new value for the industry.

What does this opportunity mean for your mining company? How can you gain competitive advantages by starting your digital transformation? Here are the top five things you need to know:

1. Don’t Wait
   The world is becoming connected at an unprecedented rate. By 2020, there will be 20 billion connected devices, all of which generate data. Mining is no different – today, most of the industry’s equipment is connected with sensors that generate disparate types of data. But as little as 1% of that data is used to improve mining operations. Not using the other 99% costs time, money and missed opportunities. For example, using advanced analytics on a fleet of 50 average-capacity haul trucks can generate up to $10 million per year in improved availability and utilization. Similarly, for a processing plant this value can exceed $15 million in improved productivity and recoveries (based on Uptake customer use cases and internal research). Not taking action today means leaving a potential of $25 million on the table every year.
   
   
2. Your Answers Are Only As Good As The Questions You Ask
   Tech buzzwords flood the market. A wide array of products claim to help mining companies with digital transformation. But one size does not fit all. Be sure you begin your search for the right solution by first clarifying your unique business problem and defining where you want to end up. This approach will ensure you ask the right questions in order to get the best answers – and ultimately select the right technology that is not only capable of solving your most pressing business needs, but also paving the way for your organization’s overall digital transformation.
   
   
3. Build a Belief System
   Just like ride sharing or online music, IIoT is becoming too big to fail. But in order for your organization to effectively take advantage of its opportunity, leaders must build a belief system of innovation and a culture change within their organizations. The Fourth Industrial Revolution is quickly redefining how humans interact with their surroundings – more so than the three that preceded it. Entire industries are being reimagined. To make sure mining isn’t left behind, leaders need to set broad and ambitious targets for their companies, teams and workers, rather than simply focusing on solving day-to-day operational problems. Think bigger: define your path that will carry you forward to the future you envision for your business, and identify the specific steps you must take to get your organization there.
   
   
4. Choose Action Over Information
   One thing the mining industry has done well in recent years is to build systems that produce an abundance of data across the entire value chain. Mining equipment, technology and service providers deserve credit for creating valuable tools that provide real-time information about process parameters. Now what’s needed isn’t more data, but the ability to translate that data into meaningful intelligence. Technology built on artificial intelligence (AI) and machine learning can turn raw data into actionable insights. It can help operators of grinding mills or flotation areas take the right actions at the right time to ensure consistency in mineral liberation and recovery.
   
   
5. Put Your People First
   This principle is paramount. Technology solutions are only as good as the people and teams who use them. Sophisticated technology is useless if it doesn’t augment and improve the daily operations and environment of your workforce. Digital transformation efforts won’t be successful if technology solutions aren’t designed with users at the center. Even more important is ensuring your teams clearly understand how this technology gives them superpowers to be even better at their jobs.

While these five principles are by no means comprehensive, they are solid guideposts to help your organization take the first steps in your digital transformation journey. Don’t you think it’s time your business took a bite out of the $400 billion opportunity for the mining industry?