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PERSPECTIVES


When cost reduction is not enough: Q&A with Angel Izurieta

Mining companies can approach new growth opportunities with technology.

Angel Izurieta Headshot
Angel Izurieta
Managing director – Natural Resources
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Why do miners need to update their approach to technology investment?
Given the price decrease for commodities, leading mining companies have been striving to reduce costs and readapt their operations. Although these actions have allowed many miners to survive, they are facing a complex cycle that will take a considerable amount of time to settle.

In this context, mining companies are reaching a turning point: They may no longer do “more of the same” and obtain better results. Cost reduction cannot be eternal. It’s necessary to find new ways to improve productivity and grow in a hostile environment. This is where technology comes into play as a key enabler of the business transformation.

How are mining companies currently dealing with this new reality?
The mining industry is at an early stage. Historically, technology was considered to be a supporting tool to the business core. Large technology projects required too much time and were often not aligned with the business needs.

In today’s world, where everything is digital, technology has become the transformational power for this digitalization. It has emerged as a way to solve “old” problems in a “new” way. Miners are realizing they need to invest in digital technologies in order to find a way out of the “more of the same” circle. But this will require a paradigm shift.

What is this “paradigm shift” about?
The digital world has become central in people’s lives—to the point of being naturally embedded in how we live and work. For example, we may use the Waze app to determine the optimal route to the office. We check our bank accounts and pay our bills via mobile. We verify our doctor’s appointments and complete many other tasks.

This “everyday” reality is beginning to reach the mining world. Therefore, it is necessary for miners to understand the actual value that technology will contribute to the business, viewing it from a transformational and value perspective rather than as something “cool.”

Think of the way in which technology allows processes to be digitally and comprehensively managed. At the simplest level, it supplies information and connectivity. More broadly, it can be the catalyst for a range of innovations—such as applying analytical models to optimize mining processes, or using drones to conduct mapping and geo-referential measuring. The list of transformational possibilities goes on and on.

What kinds of projects are being developed under these new methodologies?
As just one example, we are currently working with Accenture Life Safety Solutions, a proprietary multi-use solution. One of its uses relates to digital management of the mining turn-around process (plant intensive maintenance) in a completely different way. This new approach allows for optimization by enhancing productivity and security controls. The solution also includes functionalities for invoice process reconciliation to drive savings—recently achieving 17 percent at one of our clients.

What should mining companies do before taking on digital transformation projects?
First they should reconsider the role of the CIO, which needs to be part of the transformation not in a supporting role, but as a key business leader. We are already beginning to see how miners are adapting their structures to place the CIO closer to the CEO.

Second, they should review their operating model and seek convergence between IT and operational technologies (OT). This requires C-suite leaders to take on more operational responsibility in the scope of their work.

Finally, they should evaluate as-a-service options, which allow use-based managed services. Rio Tinto is good example of a mining company doing just this.

In addition to your passion for technology, you preside over a nonprofit organization that improves the quality of life of families in the poorest districts of Santiago, Chile. Is there also a “paradigm shift” needed to break the cycle of poverty?
Absolutely. Poverty can be reversed by giving people the tools to make it on their own. The lack of opportunity that poverty creates holds back families from being able to access healthcare, seek education and contribute to the workforce. Through Jesus Niño, we offer programs to prevent children from leaving school, to help adults complete their formal education and to support families in establishing their own businesses. These people face many challenges, but they also have dreams. We put our hearts into making their dreams a reality.