Digitization in Mining Can Unlock Value Where Few are Looking

The mining industry has a huge nugget of gold sitting in plain sight, but only the world’s most innovative companies have begun to figure out how to harvest it. As the rest of the industry catches up, thought leaders will quickly realize that democratized knowledge is the key to more profitable mining projects.

Capital expenditure towards mine development tends to represent the greatest risk that mining companies can manage. Despite the industry's best efforts, mine development projects come in late and over budget by an average of 43%. These overruns have a doubly negative effect on the net present value of a given project, because they increase real costs as well as delay future positive cash flows.

Every year software gets exponentially cheaper and more powerful. Many factors contribute to this, from exponential advancements in computation and memory, to the commoditization of novel software architectures over time.

To date the mining industry has largely missed out on these benefits due to the habit of only acquiring software that is bundled with point solution hardware. What they end up with is legacy applications built on outdated architectures that are locked down and inflexible. This habit dramatically inflates integration costs and gives many in the industry the wrong impression in terms of what is possible let alone economical.

Vandrico’s hypothesis is that we can enable mining companies to accelerate development to peak production by democratizing knowledge across their operations with modern software. That is, to provide relevant information to anyone tasked with making decisions in a way that is actionable and provides necessary context.

Knowledge vs Risk in Development

When a mine development plan is created it is always done so with limited knowledge. The primary focus tends to be the geology itself, and it can only be known to a degree of certainty and resolution until it is mined. In other words, the majority of the decisions in any given mine development project are being made when those making the decisions have access to the least amount of critical information.

While speaking to Ian Berdusco, a Mine Planner at Goldcorp, he shared with us his perspective on probability based decisions:

“You cannot know every possible outcome from the decisions that go into your mine development plan. Instead of a decision being “right” or “wrong,” a decision can be thought of as having “a chance of succeeding” or “a chance of failing.” I would argue that the greater the amount of information combined with the ease of interpreting this information, the better the outcomes of decision making. This scenario is true not only for when making a decision involving geology risk, but at every other point along the capital expenditure phase.”

In other words, efficient learning during development projects gives mines a competitive advantage in decision making. And better decision making will enable projects to complete within budget and on-time.

Whereas production optimization is a better understood analytical challenge, the development environment tends to feel more nebulous. A key difference is that production environments have substantial amounts of historical data upon which most trending analyses are based, unlike the development environment which is temporary and ever-changing. Good decision-making in development is heavily reliant on experienced people. This is in part because of the historical lack of actionable data during the development phase.

Digitization as a Scalable Learning Strategy

Fortunately the ongoing digitization of mines is creating new data points which can be leveraged if correlated promptly and presented with intuitive context to support front line decision makers.

Democratization of operations data means bringing the data to those affected and responsible for making timely decisions with specific domain knowledge. Doing this will enable a scalable learning strategy that provides a foundation for new knowledge creation organization wide.

To achieve this, mines will need to adjust their procurement habits and favor software that is openly integratable and flexible over software that is inflexible, locked-down and traditionally bundled with point-solution hardware products. System integration doesn't have to be so time and cost intensive.

More specifically, they will benefit from investing in software with modern web architectures that can provide consistency in context and data integrity, easy integration, customizable views and flexible access organization wide for ultimate transparency.

The outcome will be a shared contextual truth in the form of a digital historic mine record that your organization can build new knowledge from.

At least this is what we believe, what do you think?

Special thank you to these industry friends for sharing their ideas and contributing to a series of articles we are developing about the benefits of digitization in resource extraction:

Why Situational Awareness is Essential to Short Interval Control in Mining

Decades of easy profits in the mining industry have come to an end. The industry’s last major push of exploration projects came back with disappointing results. There just aren’t as many easily accessible rich ore bodies as their used to be, and lower grade deposits come with higher operating costs when using traditional extraction methods.

This fairly recent profit squeeze has forced many companies to look to innovation to drive their operational costs down and preserve profits. Some companies have already begun to transition their operations into the digital age. While others look to them for leadership, a common thread in this conversation has been the importance of Short Interval Control (SIC), and how it can drive exceptional results.

What is short interval control?

Short Interval Control (SIC) is a system of processes designed to help your workforce identify and act on opportunities to improve efficiency of your operation. It’s front-line focused and engages team members to review production data three or four times within their shift to assess where they need to focus their efforts right now to improve overall productivity.

A key feature of SIC is the use of real-time production data to guide instantaneous front-line decision making. SIC was born out of the manufacturing industry, where the focus was on optimizing equipment usage or OEE (Overall Equipment Effectiveness). However in mining, SIC has a slightly different focus: Asset and personnel utilization.

A successful implementation of SIC will have the following benefits:

  • Improved Asset Utilization
  • Improved Production Per Worker
  • Reduced Cost per Ton
  • Operational Agility - Fewer and smaller production setbacks

Short Interval Control in Mining

With a focus on asset and personnel utilization, what tools can operational mines give their front-line miners, geologists, engineers and supervisors to be able to enable SIC?

In principle it’s quite simple really: give them the ability to see where everything is and what it’s being used for.

  • Location of vehicles, who is using them and what they are being used for.
  • Location of equipment and what it’s current state is
  • Status of environment (air quality, ventilation, rockburst hazards, flooding, etc)
  • Location of other crews and crew members, and what headings and jobs they are working on

When you piece it all together, what you realize is that in order for crews to be able to adapt on the fly, they need to be able to see what’s going on in the mine around them in real-time. They need better situational awareness.

How to achieve better situational awareness in your underground mine?

In order to reach real-time situational awareness across your mine you will need to invest in multiple areas of IT. Here are the building blocks at a glance:

  • Underground Wireless Network (Wi-Fi)
  • A streamlined ISA99-compliant policy for bridging IT and OT networks
  • Networked vendor products that are able to report their real-time status in a standardized way to other systems (vehicles, machines & sensors with “open APIs”)
  • Management execution systems that are able to report their real-time stats in a standardized way to other systems (Execution, Technical Services, Maintenance, Materials & Process)
  • A program for effectively managing system-integration projects in an agile manner
  • A platform to organize, communicate and visualize the situational information in real time (or multiple platforms integrated together)

This is how Newmont organized their system at their Chelopech Mine using ISA 95 as a framework:

Image depicts ISA 95 Hierarchy of systems at Newmont's Chelopech Mine.

Image depicts ISA 95 Hierarchy of systems at Newmont's Chelopech Mine.

This may sound daunting, but the reality is you don’t need to bite it all off at once. By adopting an open platform that is capable of scaling, your company can invest into it in smaller increments over time (reducing risk and speeding up benefit realization). For instance, you could start with just vehicle location and telemetry, then add environmental sensors, then add production metrics, and keep adding different systems and data sources until you eventually can see everything from one intuitive interface.

What does it look like?

In the end, it looks like every employee (from mucker to CEO) being able to see exactly what's going on in the mine right now.

Who is currently underground and where

Who is currently underground and where

What vehicles are in use and where

What vehicles are in use and where

Air quality anywhere in the mine

Air quality anywhere in the mine

What headings are being worked and their progress

What headings are being worked and their progress

And so much more...

Schedule a Demo

To learn how Vandrico can help your mine improve it's situational awareness and achieve short interval control, please leave your details and we will get in touch.