How to Calculate ROI for IoT and AI Solutions in Underground Mining
What value can a mine expect to receive from the costs associated with IoT and AI solutions? How does a company like Newtrax calculate this ROI prior to adding a thorough analysis of current data streams from the mine?
To help answer this question, we turn to Guy Gosselin, Subject Matter Expert (SME) at Newtrax to help describe his approach to ROI.
“You need to have a really good understanding of the mining process and how it functions underground. It’s important to fully understand the mine planning because everything is related.” says Gosselin.
Any company will see a return on investment all throughout their mine when digitizing their fleet and incorporating safety technology. Some of the main areas that Newtrax can calculate tangible ROI are through:
1) Improved Processes
2) Improved Safety delivers production
3) Improved Maintenance Practices
Improving Processes Deliver large ROI
Gosselin provides a great example of an ROI calculation that was related to production drilling. ‘’We demonstrated that by getting just 10 more minutes of active drilling per shift per drill could increase net revenue by more than 1.2 million dollars a year” reflected Gosselin. These ten minutes can be easily added to each drill site by minimizing the need to access and leave the work site at the beginning and end of each shift, or by optimizing drill patterns which reduce the set up time.
Another example of ROI was calculated on the haulage process. By cutting off 60 seconds per trip for each truck (only 2 trucks were used in this calculation) there is also a potential savings of over 1 million dollars per year. An example of opportunity for cost-saving on-site is where an access loading point was cut at 90 degrees and each truck was taking 20-30 seconds on arrival and departure, wasting 1 minute per cycle per truck. Improving this represents a huge ROI over the span of a year. Many truck drivers may say their load appears full, but if there is an opportunity to improve that load with more weight within the truck’s full capacity, this will continue to add value to the investment.
Improved Safety delivers production ROI
ROI from Newtrax proximity detection solutions, despite being a bit less obvious, can also be effectively established. The main priority of proximity detection is improving safety for both workers and equipment. This same system designed for improved safety adds production value in its inclusion of a right-of-way prioritization for ore loaded equipment.
By improving the number of loaded trips each truck makes throughout the day, in correlation with its optimized payload of ore, the ROI of Newtrax proximity detection systems can also be established.
Most importantly, by mitigating any downtime and improving safety standards with proximity detection solutions from Newtrax, costs associated with mine operations stoppage can also be lessened, leading to more efficient shifts.
ROI for improved maintenance Practices
IoT and AI solutions provide the most easily quantifiable ROI with countless cases demonstrating clear cost savings with preventative maintenance practices.
Louis-Pierre Campeau, Research Engineer in machine learning presented a case where Newtrax sensors detected a shift in a Caterpillar AD45 truck engine condition allowing us to notify the mine that something was wrong. They found a faulty bearing, probably from manufacturing which is hard to predict and could have gone without notice otherwise. Catching the issue in the engine ended up costing only a few hours of the mechanics time and $5,000 for the bearing instead of what could have represented over $100,000 for the engine as well as a far greater loss in production time.
Every mining operation is different, therefore calculating ROI needs to be determined case by case. Even two mines utilizing the same mining method would have different variables to calculate what their ROI would be. A competitive strength of Newtrax is having a company filled with personnel from both product engineering and mine engineering, people like Guy who are very familiar with mining operations and know how to study the mine to find opportunities for improvement and relay those to the Newtrax product teams.
Guy Gosselin was able to estimate costs associated with a truck engine fail in the middle of a shift for a specific mine. It turns out that with conservative estimates, depending on where the equipment breaks, it can cost an average of 50 000$ dollars in production loss and as much as 82 000$ in the worst case scenario. A real case study performed by Guy showed a truck experiencing a major failure in the only access road of an underground unloading point. This resulted in all of the other trucks having to go to the surface to unload, which increased wasted time threefold (x3). The mine lost ⅔ of the planned production during the period of time needed to clear the access.
When wondering what adding IoT and AI services to your mine’s digital roadmap will offer, consider the benefits of being able to track and maintain performance, keeping your mine safe and having the ability to anticipate and handle machine failures. The added value can extend to shift plan optimization and using the collected data for targeted strategies. Contact a Newtrax expert to find out how we can work with you to achieve your goals.