Digitisation Programmes Have to Be Led from the Top

Miners should focus on digitisation,

We just came across a recent article published by Mining Magazine on the release of EY global‘s annual ‘Business risks facing metals and mining’ report, where mining and metals advisory leader Paul Mitchell mentioned that while digital technology represented a “big opportunity”, poor application of that technology could see miners damage existing operations in their rush to take advantage of the anticipated upside.

“Our concern is that mining companies are great at mining but they’re not necessarily great at technology projects,” he said.

“Most big companies will tell you they’ve had a bit of a disaster in the technology space that didn’t work out the way they had anticipated. And those tend to be just implementing back-office systems. Now we’re saying we’re going to use technology that changes the way we mine and changes the way we define our ore bodies.

“If you’re not really clear on what you’re doing, what outcome you’re trying to achieve and how the [technology] investments fit together you’re either going to waste money or you could end up with a disaster that damages your operation and you move backwards.”

Mitchell said gathering information was merely the first part of the process – and probably the easiest part. Miners were only now hitting the really difficult part in coordinating that information to improve decision making and transforming operational cultures to facilitate that process.

“Information is great but how you pull it together, how you let it drive your decisions, and how you implement a change of culture is the real challenge,” he said.

Mitchell said most mining operations were quite rough and ready sites and not everyone on those operations were as open as they could be about accepting machine-based decision making. The difficulty in changing that culture cannot be overestimated.

Having an industry champion to aid this transformation – and it is a technology and cultural transformation as opposed to a gradual evolution – would help the process. However, unlike the push into innovation driven by Anglo American chief Mark Cutifani or the focus on cash optimisation for which Rio Tinto’s former head Sam Walsh acted as cheerleader, digitisation suffers from a leadership vacuum.

“Digital programmes tend to be a little bit devolved [and are left with] the operations team or the technology team or the innovation team but chief executives have to get involved because big change programmes – no matter what they are – have to be led from the top.”

The EY top 10 business risks are:

  1. Digital effectiveness
  2. Competitive shareholder returns
  3. Cyber
  4. New world commodities
  5. Regulatory risk
  6. Cash optimisation
  7. Social licence to operate
  8. Resource replacement
  9. Access and optimisation of energy
  10. Managing joint ventures.

To read the full article, click here.