Miners beat a path to digital operations

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Miners beat a path to digital operations
Mobility has a future in mining, but perhaps without the hard hat.

iTnews investigates how the world's biggest operators are changing.

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Mining firms are dramatically reshaping perceptions as they embrace digital systems and draw workers away from the pit, according to technology experts and CIOs in the sector.

Interest in the transition to digital mining is high, with the topic dominating proceedings at the SAP Mining and Metals Forum in Germany earlier this month, as well as recent discussions by iTnews with top mining firms.

"Digital mining is in the head of everybody," SAP Mining & Metals director, Georg Gradl, told iTnews.

"A target that everybody's going for is to go from a company perception of an operation where people wear hard hats and drive trucks into a technology company [where] people are sitting in operating centres which may not be directly at the mine to do ... many of the things still being done by people.

"It's really the target of mine companies to be more perceived as technology companies."

Despite downward pressure on commodity prices and recent headcount reductions in most of the mine houses, key technology projects — such as those in support of a digital transition — appeared to still be progressing.

Frequently held up as a leader in the charge towards digital mining, Rio Tinto, for example, has shown few outward signs of slowed investment on its 'Mine of the Future' program, continuing to hire despite headcount reductions in other areas of the business.

"What we're seeing now definitely mirrors what we've seen in past downturns or lulls in the market — 2009 for example — and that is really prioritisation and continued focus on the careful investments where IT can make a difference," said Jeremiah Stone, SAP Labs' sustainable operations & product solutions management vice president.

"We're starting to see the digital mine become reality. It's evolving very quickly, [but] the focus on digital mine technology, automation and its impact on safety is a very common and regular discussion.

"Whatever we can do with automated machinery and devices to remove humans from the mine face and danger with direct contact with the mining activity is definitely a focus and point of discussion."

Minerals and Metals Group (MMG) chief information officer Peter McLure saw digital mining as an evolution to "a more connected organisation that really operates in a different way, enabled by some of the new digital technologies".

The safety aspect of pulling mine personnel back from "the hot, dirty, dangerous frontend of mining" was one driver for digital mining, McLure noted, though the trend spoke more broadly to personnel issues experienced by mine companies.

"We mainly operate fly-in fly-out operations in some remote parts of the world, and it really costs us a lot to have people onsite," McLure said.

"If we don't need to have people onsite we shouldn't have people onsite. [So] you're seeing trends around pulling specialist functions out of mine sites and putting them into hubs, and locating those hubs somewhere where its easier to attract people.

"But in order to do that you really have to digitise the work before you can move it."

Hungry for change

McLure noted that the drive towards digital mining required changes at "multiple" organisational levels, and that the projects could not be spearheaded by IT alone.

"You need allies," he said. "You need to convince a number of players in the business to step up and own pieces of this."

Digital mining projects typically came with aspects of technological and organisational cultural change.

"If you think through all the implications of digital mining it really changes organisational models, it changes roles and responsibilities, it changes relationships between the various groups in a company," McLure said, noting that much of this responsibility sat outside IT.

"It seems to me one of the challenges for IT folks is they can often visualise the layout and architecture ... but they generally don't actually have the power to deliver because of the changes in the organisation that this thing involves.

"IT generally doesn't own the organisational model for the company — someone else does — so you need whoever's doing that to see the potential and step up and take on board this change."

Much of the potential for digital mining would depend on the orientation and predisposition of individual mining companies to the transformation needed to make it work.

"Perhaps at MMG we have a bit of openness to that," McLure said.

"We have an aspiration to grow by a factor of four or five and become a leading mid-tier mining company.

"To do that we'll have to change at all levels, so it leaves the executives very much open considering what might accelerate growth [for] the company."

But, McLure said, he "wouldn't expect that all companies are ready for it".

In addition to driving organisational change, technology changes may also be required, particularly networking mine sites to enable operation from afar.

"You tend to get mine site infrastructure delivered when the mine is built," McLure said.

"Often that means you get what your EPCM [engineering, procurement and construction management] contractor gives you."

McLure said new mine sites were being fitted with communications networks such as underground fibre optic cabling, providing flexibility for the sites to support greater levels of automation and digital systems.

"It's pretty hard to do after you've already developed the place, but if you're doing it from the start, it gives you a lot more flexibility down the track," he said.

Rio Tinto's head of innovation John McGagh said his firm had taken "a long bet on communications", equipping mine sites with "wireless communication networks" and running fat dedicated fibre links into the firm's Remote Operations Centre in Perth.

He acknowledged that establishing the communications systems to facilitate digital mining was "not easy".

"We see that as being one of the challenges going forward," he said.

"We spend an awful lot of time on communications. We're comfortable where we are".

Communications investments on Australian liquefied natural gas projects also point to a future in the oil and gas industry that is shaped by digital innovation.

The Gladstone LNG project, Chevron's Wheatstone and Shell's Prelude projects are among those to start fitting out operations with state-of-the-art communications systems.

Read on to see how digital technology is emerging in the resources sector.

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