June 24, 2017

South African Mining Companies Must Transform to Survive

Struggling with commodity prices, declining ore grade and operational challenges, South African miners have no choice but to focus on creating operational excellence to buffer against declining margins. Creating operations that are interconnected digitally, and built on processes enabled by data to deliver responsive and agile operations is critical. More productive, efficient and sustainable ways of extracting value from minerals, while at the same time enabling safe and productive workplaces, is possible.

According to Emilie Ditton, research director for WW Mining at IDC, “It is not new that mining companies are placing a value on their data, but the transformation that is required is about truly enabling the data; enabling it to control, manage and respond to the operation. Companies must enable processes and decision making beyond the operational siloes endemic within most mining companies. Third platform technologies such as cloud, mobility, analytics and social networking can enable companies to cut costs, improve productivity and find room for innovation. Couple this with innovation accelerator technologies such as IoT, 3D printing, cognitive processing and next generation security, and these organisations will be able to reinvent their business processes to support agile and dynamic operations,” says Ditton.

A critical component of the transformation is enabling connected and intelligent management of people, material and assets within the execution of the mine plan. Workforce tracking is the current priority with 94% of South African mining companies highlighting this, but this top priority will change to ore tracking and management look forward over the next couple of years. “Many South African mining companies are already working closely with their IT suppliers to improve network connectivity above and below ground to allow for the deployment of remote sensors that can be used to monitor everything. Ongoing, bringing together ecosystems of suppliers enabling Internet of Things (IoT) capabilities -across OEMs, networking providers, IT services companies and operational technology vendors will be required to create that capability. The technology capability will change but so will the way that mining companies need to engage in the vendor ecosystem,” she says.

Ditton says there is already a willingness for an increased partnering approach with technology suppliers amongst South African mining companies. The momentum behind cloud investment in mining is accelerating, with the number of companies not using the cloud in South Africa declining from 31 percent to 14 percent in two years. “Mining organisations in South Africa are leveraging cloud technology to drive growth, bring down costs and offer centralised functions and controls, which in turn will enable greater standardisation of operations across different locations.”

“Going forward, South African mining companies must focus on operational excellence, business simplicity and a holistic approach to digital mining initiatives,” she says. “Mines generate enormous amounts of data, but the key here is being able to use that data to inform ongoing change and improvements. Mining companies need to ensure that the right infrastructure, capabilities and governance are in place to allow them to use the data embedded in all their processes.”

Enabling greater simplicity within the business is important. Mining companies need to ensure that their processes are as simple as is practical to enable collaboration, improved decision-making and the creation of value. “Finally, they need to ensure that digital mining initiatives are considered holistically if they are to extract true value from them,” says Ditton.

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