Miners have tightened their capital spending as they have become less profitable due to declining ore grades, challenging regulatory hurdles, softening demand and rising in shareholder activism over the past few years. This paradigm shift from overzealous capital spending in the past is the “new normal”.
In order to mitigate the growing uncertainty and volatility permeating the industry, miners have begun to embrace emerging technologies to manage their assets effectively, improving productivity and deriving cost savings to ensure sustainable future operations. With all the realized benefits to date, one can say that failure to incorporate digital technologies would expose a miner to higher risk.
New enabling technologies are catalyzing mining industry developments and creating opportunities for digital solutions using robots, drones, driverless equipment (drills, ore crushers, trucks and trains), virtual reality technology, 3D printing and M2M technologies. These are reshaping this labor intensive industry by helping miners develop mines in more challenging and remote areas and improve the way they manage their supply chains.
Consider drones, for example. Miners have adopted drones to monitor stockpiles, map exploration targets and track equipment along their value chains. It is also believed that, in the near future, drones will shorten supply chains by providing immediate spare part delivery.
Our assessment of a group of top 27 miners by market capitalization shows that miners continue to struggle with articulating a clear “digital strategy”, as well as being poor at using information technology to interact with customers (“digital servicing”). However, miners seem to perform much better in adopting digital solutions (“digital enablement”).
We classified company mining business models as follows:
Extensive: Sales ≤40% of total revenue in any one commodity
Diversified: Sales >40% and <75% of sales in any one commodity
Focused: >75-100% of sales in one commodity
Overall, diversified miners scored marginally better than extensive miners in the use of enabling technologies. As expected, focused miners lagged on this scorecard. Technology advancements developed in other industries such as oil & gas (e.g. digital reality1, artificial intelligence virtual assistant2, etc.), automobile (e.g. fuel cell vehicles, next-generation robotics, additive manufacturing, etc.)3 and food manufacturing (e.g. automation4,etc.) can ultimately have a substantial impact on mining.
It is therefore prudent that miners should have these technologies on their radar. Also, miners will benefit from the lessons learned in those early-adopter industries, ensuring seamless and simplified integration into their existing processes and systems.
What’s on the technology radar?
Accenture conducted research to identify emerging technologies and assessed their applicability in the mining industry. One of the most promising is smart robots, where software, sensors and a greater volume of robotics usage has enabled robots do many more precision activities and at an ever decreasing cost. See previous blog on this topic.
Figure 2 offers a snapshot of embryonic or emerging technologies across industries relevant to mining. Some of the technologies do not necessarily directly relate to mining operations, but might become relevant in the future.
With commodity prices expected to remain subdued for some time, miners need to be aware of emerging trends in enabling technologies, since they will improve costs, flexibility and safety.
Other sources used for developing this blog: