How to Drive Digital Transformation in Mining and Metals Industry?
The disruption of business models with the rapid advancement of digital technologies has become a reality for many industries, including automotive, aviation, healthcare, energy, retail, and banking. Though the consumer-facing industries witnessed the most significant impact, there are growing instances of digital transformation in asset-intensive industries such as manufacturing and energy for many years.
Along the same lines, the mining and metals industry is now undergoing digital transformation.
Within few years after the world witnessed the 2000s commodities boom, the global metals and mining industry started facing severe challenges across its areas, including exploration, setup, mining, ore processing, metals smelting, distribution, and marketing.
The challenges include:
- Weak global demand
- Massive excess capacity
- Evolving customer requirements
- High trade flow disruptions
- Stricter regulatory requirements
- Increased resource nationalism
- Increasing workforce skill gaps
- Declining high-quality ore deposits
- Increasing market volatility and weak pricing
These challenges have become the industry’s “new normal,” prompting miners to dramatically rethink existing processes to unlock unparalleled opportunities for value creation and capture. Digital technologies emerged as the right solution to bring the required transformational change!
How Digital Transformation Benefits Mining and Metals?
Digital transformation shows great promise for the mining and metals industry that desperately needs a makeover. It can create a more agile and profitable business, with improved decision-making and employee empowerment. Moreover, digitalization can reduce geological uncertainty, market volatility, and operational risks and improve health, safety, and environmental impact.
According to a recent World Economic Forum report, by 2025, digitalization in the mining and metals industry could create:
- USD 425 billion – potential value addition for the industry, customers, society, and environment
- USD 320 billion – potential value for the industry
- USD 190 billion – potential value for the mining sector
- USD 130 billion – potential value for the metals sector
- 610 million tonnes – reduction in CO2 emission
- 1,000 lives – estimated number of lives saved
- 44,000 injuries – estimated number of injuries avoided
How Can Mining Industry Achieve Successful Digital Transformation?
The mining companies must embed digital thinking, processes, and structures into their entire organization to unlock the full value of digitalization. While many miners strive to achieve true digital transformation, they lack real visibility and struggle to execute an effective digital strategy.
Here are some considerations for mining companies to thrive in the digital future:
1) Develop the right digital strategy
The mining companies must develop an enterprise-level digital strategy that clearly defines the value to be created by the digital initiatives to the organization. The strategy must deliver digital business transformation at the speed that attains short-term goals while ensuring flexibility to enable longer-term transformation. Moreover, it must consider all the products and platforms that make a complete solution for the entire future digital mine.
2) Automate operations and digitize assets
The organizations must deploy a wide range of digital capabilities to automate core operations in the mining value chain. For instance, IoT and Machine Learning must be used to automate and improve the reliability of mining equipment and trucks, sensors to capture data in real-time, drones for data collection, inspection, and stock control, and wearables for field maintenance and operator safety.
3) Implement data-driven planning and decision making
Though the direct benefits of automation and digitization are significant, a greater value will be realized only when the data is used to plan, optimize, and integrate the activities across the value chain. The mining companies must develop and deploy data science and analytic skills as well as the foundational data platforms and analytic tools to bring together data across the value chain in multiple time-horizons.
This helps improve planning, control, and decision-making to optimize complex systems and operations all the way from pit to customer.
4) Re-image ERP and automate support processes
The ripple effect of digital transformation will go beyond the core mining operations to the supporting processes and systems such as supply, HR, and finance. So, the companies must re-imagine Enterprise Resource Planning (ERP) and other processes using digital solutions that enable the low cost of ownership and latest user interfaces.
Robotic Process Automation (RPA) must be utilized to automate repetitive manual activities and reduce costs and errors in back-office support processes and shared services.
5) Consider the impact on the workforce
Digital transformation in the labor-intensive mining industry will significantly impact the workforce in a multitude of ways. The digital mine can employ a diverse workforce, including on-shore, off-shore, distributed, remote, mobile, and connected employees, with increased human-machine interaction.
The path to digital mine is less about capitalizing on new technology, it requires business leaders to embrace a new way of operating, data-driven decision making, and diverse skills and capabilities. This will be a daunting task for mining companies, which often find themselves in digital talent scarcity. They must recruit new skills while supporting their experienced workforce to make the transition successfully.
With the digital landscape evolving rapidly, now is the better time to explore Intelligent Mining!
Veritis Can Help!
Work with Veritis to kick-start your digital mine transformation today. We help you implement a sustainable digital transformation, providing the required multidisciplinary digital skills and deep industry expertise.
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