The Asia Miner

OCT-DEC 2017

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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8 | ASIA Miner | Volume 14 • Issue 4 | 2017 A DIGITAL transformation in mining is vital if companies want to address the productivity challenges facing the entire industry. Min- ing companies can start the process immediately by incorporating readily available digital applications to change the way they operate. Global industrial company GE is showing the way in this regard through adoption of digital applications, including its 'Brilliant Mine' concept. Global commercial leader, Digital Mine, Ian Larsen says undergoing a digital transformation means miners can start getting the improvements they are seeking now. "One of the big challenges for miners is to better negotiate the industry's boom and bust cycles. During the bust there is no money to spend and in the boom there is a chase for tonnes. As prices climb it is a race to get tonnes to market before competitors and anything that gets in the way of tonnes out the door tends to get lower priority. "What I sense in the market now is that companies believe they cannot keep going through the regular cycles and need to do things differently. This is where digital transformation comes in … but I don't see it as the same thing as innovation. You can do a lot of transformation by changing the way you work without seeking new innovations. It is definitely innovative thinking, but not necessarily innovative product." He says that there are entire departments within the major mining companies that deal with innovation and are looking at 3-5 years- plus for implementation. They are examining methods such as add- ing sensors to the entire value chain, but these developments take a lot of time, significant capital investment and expertise in many areas. "You don't have to wait for the process to be completed or reinvented to achieve better productivity now." Why the need? Ian Larsen says industry trends are driving the industry's future pri- orities and the need for change. As well as negating the impact of boom and bust cycles, these trends include: • Poorer ore quality - grades declining, more impurities, complex processing and need for controlled blending. • Ore availability – miners forced underground or to more remote locations as near surface/open pit ore and coal is depleted. • Miners want to buy solutions, not equipment – total cost service models will be more common. • Shortage of skilled labour and increasing labour costs. • Energy saving equipment increasingly important. • Mine safety an important differentiator. • Increasing social, environmental and regulatory pressures on miners and suppliers. The evolution of digital applications in the mining sector has be- come crucial to the optimisation of mine sites and the companies that run them. Digitalisation encompasses technologies such as wireless communications, real-time analytics, machine learning, commodity sensors, machine automation and embedded systems. Transforming business Digital transformation is actually business transformation, ac- cording to Ian Larsen. "The only reason to change your business is to be more profitable and deliver better value for shareholders. "Every miner is somewhere on the cost curve and the higher on the curve, the more susceptible you are to be taken over or go out of business when the down cycle comes. Productivity improves as you move down the curve. This also means that more ore reserve is mineable at a profit, which increases the asset in the ground. Mining differs from manufacturing and other industries in that a large part of asset value is product still in the ground. It is like a two-for-one deal – shareholder value through productivity as well as reserves not yet mined." GE believes global GDP can be impacted through digitalisation. "We are a global company and global GDP is our growth engine, Mining needs a digital transformation A number of digital applications are available to address the productivity issues facing the mining industry. Images: GE Mining.

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