FEATURE: 5 Characteristics of Mining That Need to Improve for the Future

When envisioning the future of mining, everyone has a different idea. Because the public opinion sees mining as an old, dirty, dangerous and environmentally contentious industry, companies have two options: either innovate or stagnate.

“Mining companies will have to lose the rigid and ironclad business models and practices of old and become fluid, flexible and agile enterprises poised to pounce on opportunity,” according to a report by IBM titled Envisioning the Future of Mining.

“At the same time, many (if not most) of the core mining activities, practices and competencies will be carried forward from practices today. Sometimes the question is “what will be different?” and sometimes “what will we do better?”.

The one constant in the mining industry is change.

The following characteristics are a composite of all the best and brightest practices in mining. We break down what needs to be discussed, enhanced and built upon for the future of mining.

1.) Business model innovation

Historically, the mining companies have chased production growth at the expense of productivity on a volume and cost basis. Well, times are a-changin.

New business models should focus on value, both for the organization and the customer. Mining companies should focus on realigning relationships to build financial solidity of suppliers, partners and customers. This will in return provide long-standing profitable relationships that enable companies to transcend commodity-trading relationships only.

Companies should:

• Allow their business model to be driven by customer demand

• View supply chain holistically and optimized as an integrated process

• Make operations become geography-independent

• Learn from other industries, partners, acquisitions and other sources

• Be forward-looking utilizing smarter plans and advanced business analytics

2.) Asset management

Good asset management considers and optimizes the conflicting priorities of asset utilization and asset care, of short term performance opportunities and long term sustainability, and between capital investments and operating costs, risks and performance.

In the future, companies will need a revitalized outlook and approach to asset management. Companies should view the entire asset management life cycle and take a wider view of asset classes and how they each behave and contribute value differently.

Companies should:

• View assets as instrumental and intelligent, reporting their location, their status and other key metrics remotely and automatically.

• Include a broader array of asset classes, including land, fields, inventory, information technology, real estate, and infrastructure.

• Implement a centralized asset management program, leveraging sophisticated asset management practices and integrated asset management tools/technologies.

3.) Governance and workforce collaboration

According to a study in Australia, mining companies are among the worst performers in an assessment of the corporate governance standards compared to other industry sectors.

The future of mining will improve its utilization of governance and workers to drive change and improvement. Companies will adopt new strategies for collaboration among departments, geographies, phases of the supply chain, partners, customers and suppliers that will become critical to building enterprise agility.

Companies should:

• Collaborate with suppliers, customers and partners to work on common issues, improve relationships, improve productivity and create better and more accurate plans.

• Communicate and collaborate across the entire enterprise and across multiple mines and sites. Activities should be coordinated through a central control room or location.

• Allow research and design to be fueled by collaboration across the company; through vendors and partners; and within the industry.

4.) Energy and environment

The time is now for the mining industry to take a proactive stance in energy and the environment to make substantial societal changes as well as improve costs and attract new talent. New programs and technologies will be implemented more frequently to manage consumables such as carbon, water and fuel from end to end. Being environmentally friendly or “going green” will be more than just a marketing ploy.

Companies should:

• Integrate Corporate Social Responsibility (CSR) programs into as many aspects of their business as possible.

• Utilize process, information and analytical tools to manage environmental and energy consumables.

• Attract eco-friendly advocates to work and support clean mining operations.

5.) Remote operations

Although almost everyone knows automation is the future of mining, most mines are still run with a localized approach. The idea behind remote locations is to move control centers to a centralized location where mining performances can be measured across sites and locations. This allows for metrics and measurement processes to be standardized and universally adopted.

Companies should:

• Manage sites centrally from one location to achieve improved control of the enterprise. The reduction of redundant management reduces costs.

• Utilize automation including robotic and remotely controlled equipment and transportation when appropriate for the company.