PROSPECTING FOR NEW SOLUTIONS
Worldwide, companies digging for
coal, iron ore, gold, diamonds, and
other metals tumbled from their
position as $1.8 trillion market-value
leaders to investment losers, barely
treading water. The total revenue
of top mining companies reduced by
50% in just five years, and net profit
margin has been slashed from 25% to
a 2016 low of 4%.
What happened? In short: demand dropped, prices slid,
investors pulled out, but operating costs remained high.
The subsequent flow-on sequence of events is forcing mining
companies to confront long-standing issues with productivity,
people, security – and their commercial agility.
• DECLINING PRODUCTIVITY
As high-grade surface deposits are depleted, lower grades
are being processed at greater cost.
• INCREASING EXPENSIVE EXPLORATION
With only one in 400 explorations resulting in a commercial
mine, high quality deposits are harder to locate and develop.
Potential sites include the sea floor, deeper underground,
and ever-more remote regions.
• ESCALATING SAFETY COMPLIANCE COSTS
Workplace health and safety issues persist at mines and
• ENVIRONMENTAL REGULATION
Mine operation is carefully monitored for emissions,
contamination, waste and pollution. Environmentally sound
site restoration is now part of the mine closure process.
• SHRINKING WORKFORCE AND WIDENING SKILL GAPS
The current skilled workforce is aging, there is a generational
resistance to mining as a career, and employee turnover is
up to 30%.
• GROWING THREAT OF CYBER-ATTACK
Old, insecure, mining industrial control systems are
• DECREASING ABILITY TO RESPOND TO INCREASING
Underlying these issues is a deeper problem. Many in the
industry follow a rigid business model that is no longer in step
with the marketplace. According to an IBM white paper, “many
miners believe nothing can be changed: you have a mine, a
railway system, a nearby port and that is it.” (from ‘Envisioning
the Future of Mining’ (2009)). This model understands the role
of mining as delivering large volumes of product as cheaply as
possible. Operations and staff at individual mine sites have no
means of managing operations remotely, collaborating with staff
at other sites, or optimizing operations in response to changing
demand or market conditions.
To do so requires a different organizational mindset, and the
tools and data to support a change of direction.
DIGGING DEEP WITH DIGITAL
The digital revolution in communications, IT and automation
technology has opened possibilities that readily adapt to mining
operations. Other industries are already well down this road,
notably Oil and Gas with its ‘Digital Oil Field’ and Utilities’ ‘Smart
These models can leverage the convergence of IT, digital
telecommunications, IP networking, and the Internet of Things
(Io T) to integrate, automate, and optimize mining operations.
Physical devices communicate directly with each other –
machine to machine – without human intervention; sensors,
measuring devices, and actuators embedded in field equipment
exchange data in real time so they can be monitored, integrated,
configured, optimized, and managed remotely (or manage
Connected by integrated wireless networks, purpose-built
applications send combined and integrated data to servers for