For The Most Part, The Mining Industry Is Embracing The Need For Digitalization. Yet There Remain Challenges And Roadblocks on the Digital Journey.
By Jonathan Rowland
Mining is an ancient industry with many mining companies “operating the same way for decades.”¹ But it is also a vitally modern industry: it provides the basic materials for much of the modern way of life and for the solutions that are needed to meet sustainable development goals. To keep up with the demands placed on and challenges facing the industry, mining companies “must become fully-digitalized organizations.”¹
Or as Gary Goldberg, former CEO of Newmont and now a non-executive director at BHP Billiton, put it:² “Harnessing technology is central to making mining safer and more efficient – from proprietary technologies that help us locate deposits, to autonomous equipment and fatigue monitoring systems that protect our people, to social media that keeps us in close contact with our stakeholders. The key is to select the right technology and to make the best use of available data.”
A Marketplace for Digital Change
Earlier this year, Shell and IBM launched Oren, an online marketplace for B2B digital mining services with the aim of helping mining companies to find Goldberg’s “right technology,” related to safety, sustainability, mine planning and operational efficiency. North American Mining Products spoke to Chen and Matt Candy, global managing partner, IBM iX, to find out more about the launch, starting with why Shell and IBM teamed up – companies that are more generally known for their work outside of the mining industry.
Both are, however, well acquainted with the industry. Shell is a major supplier of lubricants to the sector. And IBM has been involved in providing digital services to the industry for decades, offering solutions that target enterprise and operations transformation, technologies, outsourcing, SAP implementations, and helping mining companies to use their data to their strategic advantage.
“Both companies have the domain expertise to offer mining products and services that bridge technology transitions and industry pivots, assisting our customers to address their challenges and new opportunities,” said Chen. “So, it was an obvious synergy for a leading energy company and the leading technology and business services company to come together for this digital mining marketplace initiative.”
Navigating Digital Roadblocks
The overall aim is to “help the mining sector accelerate its digital transformation,” continued Chen. Specifically, it is to act as a one-stop-shop for field-proven solutions, new technologies and innovations from IBM, Shell and other leading technology suppliers and start-ups. As part of that mission, it “reviews and assesses all the products and services that are offered to help add further reassurance to mining companies that they are accessing leading and trusted digital technologies.”
What this provides mining companies is a platform that facilitates the finding, understanding and purchase of the most relevant digital solutions and services. In doing so, Oren “enables mining companies to become more digitally enabled so that they can achieve efficiency and sustainability goals more quickly,” explained Candy.
In providing this platform, Oren also helps solution provides and seller companies to more efficiently reach mining customers, explore new routes to market, and accelerate customer acquisition. It is this more efficient ability to pair mining companies with appropriate solutions providers that – it is hoped – will be a powerful force for digital change, helping the industry navigate the roadblocks that it is bound to encounter as it treads a new path into Industry 4.0.
Is Mining Ready?
Although the mining industry has largely accepted the need – and benefits – of digital transformation, it remains a traditional industry in many ways with the nature of mining staying the same for decades. But, as McKinsey noted as far back as 2015, “achieving a breakthrough […] demands rethinking how mining works.” Is the industry ready for that?
Candy believes so, noting the “optimism around the uptake of Industry 4.0.” It is however an industry that is “experiencing a number of challenges that make it difficult to convert this intention into action. For example, depleting ore reserves and declining ore grades at existing operations mean that companies have to mine deeper to reach new deposits, which in turn increases costs. This causes problems to digital implementation, as Industry 4.0 often requires high up-front investment.”
Meanwhile, in engaging with more than 350 mining business, Shell showed that 80% of the industry wrestles with a similar range of challenges when it comes to their digital journeys. These include:
- Difficulty aggregating data to make actionable insights.
- Lack of intelligent workflows due to siloed organizational working.
- Facing the energy transition and achieving sustainability goals.
- Keeping employees safe, while deploying autonomous technology.
“In these and ongoing discussions with mining companies, Shell and Oren identified that these challenges bore a great deal of similarity to those faced by the energy sector. And that many of the digital solutions currently used in the energy sector could therefore easily and cost effectively be applied to the mining sector,” said Chen. These solutions may not have existed in the mining industry previously, but are now being made available through Oren.
Open for Business
At launch in June, Oren had products and services from 20 companies available with a further 30 companies joining since then. It also has its own separate workforce and team of experts to facilitate connections, although it can still tap into the wide global network of existing specialist sales teams at both Shell and IBM to promote the platform. This openness to solutions is an important principal in Oren’s mission to create a one-stop-shop that can provide mining clients with options.
Although closed digital ecosystems may provide benefits to their developers, they do not work for consumers: after all, no single supplier can do everything. The ability to combine digital solutions from different providers is therefore a vital concept behind a successful digital strategy. Or as Candy puts it, “every solution will have an advantage for a certain type of client and their specific customer needs.”
“The real benefits will come into play when mining companies are able to link together different productions and solutions from multiple solutions providers,” continued Candy.
These benefits include:
- Collaboration and interoperation within the industry.
- Buy and sell services on value in a marketplace.
- Infuse exponential technologies to reimagine mining workflows.
- Foster new ways of working and focus on culture and skills to help fill the skills gap.
- Create new opportunities for a sustainable future.
Chen concluded, “the longer-term goal for Oren is to work with mining companies to understand their specific challenges and frictions to suggest and identify the most appropriate solutions. And to provide solution providers with constant two-way engagement with mining companies that will allow them to continue to evolve and enhance their products and solutions.”
References
1. “Leveraging Technology to Revolutionize Mining”, Boston Consulting Group.
2. Gary Goldberg is quoted in Digital Transformation Initiative: Mining and Metals Industry (World Economic Forum; January 2017), p. 4.
3. DURRANT-WHYTE, H., GERAGHTY, R., PUJOL, F., and SELLSCHOP, R., How Digital Innovation Can Improve Mining Productivity (McKinsey; November 2015), p. 3.
Opening Pandora’s Box
The Oren platform brings access to field-proven solutions, as well as offering early access to new solutions, alongside a searchable database of case studies from the industry:
- Access to field-proven mining solutions such as IBM’s Maintenance, Repair and Operations (MRO) Inventory Optimization Services, which helps manage spare parts inventory optimally for both critical and non-critical spares. The solution is widely used in the industry and offers great gains in working capital reduction and prevention of downtime.
- Dedicated environmental management and compliance software that provides detailed analysis and reporting on pollutant inventories, greenhouse gas emission, energy consumption, environmental impact assessment, mine rehabilitation, and mine life cycle assessment. “We anticipate that one third of the solutions available on the marketplace will be related to sustainability, with solutions from both large enterprise and start-ups such as Hydrox Holdings, which has developed a technology to unlock inexpensive hydrogen production as a renewable energy source,” said Chen.
- Early adopter access for pioneering technologies that help transform mining operations. Oren will facilitate the adoption of new solutions by mining company into daily work routines and their integration into current systems. For example, on an operational level, the trend in the mining industry is for an increasing amount of work to be undertaken from control rooms. Bringing the full experience of a mine site visit to any home office, BGC Engineering will feature its Ada platform on Oren, which allows holographic visualization of mine site through a realistic 3D interactive and immersive experience. With this solution, subject matter experts and non-technical stakeholders can visit a digital version of their project site any time – past, present or future.
- A searchable repository of best practice mining use cases to show the solutions in action at other mine sites. “As the platform increases in use, mining companies will be able to extract insights related to technology trends applied in the industry and understand what areas the sector is investing in,” explained Chen. “This will help them determine how their own digital transformation journey is progressing. Service providers or sellers will gain insights that are useful for product improvement and that can drive innovation based on what resonates with the customer base and other users of the platform.”