The report reveals that implementing digital technologies isn’t on the agenda for 15 percent of mining firms. EY, the author, argues that it probably should be.
Mining companies are increasingly turning to digitization and automation, but a new report from EY shows that some are reluctant to implement smart mining technologies.
Released on May 8, the report shows that implementing digital technologies isn’t on the agenda for 15 percent of mining firms. Many believe that mining is simple enough not to warrant an investment in digital solutions — plus costs and changes to existing processes must be considered.
According to EY, these companies may be missing out on major opportunities. “By increasing efficiencies through things like artificial intelligence for exploration, automated mining trucks or advanced simulation and optimization tools, operators can address productivity and cost challenges,” said Iain Thompson, EY BC mining and metals advisory services leader.
Smart mining in action
Of course, some mining companies are doing a good job of integrating digital technologies and automation into their mining operations. EY says about 31 percent of the 700 firms it polled have started on their digital journey, equal to the number that said digital is a part of day-to-day operations. Another 22 percent said they are considering adopting digital technologies.
It doesn’t take long to find examples of major companies that are beginning to reap the benefits of these new strategies. For instance, BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT) is testing the use of sensors that could increase the grade of copper being sent to its processing plants by 10 percent. The company is also deploying driverless trucks and drills at its iron ore mines in Australia.
Fortescue Metals Group (ASX:FMG) is using Caterpillar’s (NYSE:CAT) autonomous haul trucks at its iron ore mines too, and Goldcorp (TSX:G,NYSE:GG) is using CISCO’s (NASDAQ:CSCO) “Connected Mine” system at its Eleonore mine to improve operations efficiency by tracking people and equipment.
Meanwhile, Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) is using driverless trucks and robotic drill rigs at its West Angelas mine in Australia. The next step in automation for Rio Tinto will be driverless trains that haul ore from mines and unload themselves at the port. Rob Atkinson, who leads productivity efforts at Rio Tinto, said the company is already reaping the benefits of its automation projects. Atkinson said the driverless trucks are 15 percent cheaper to operate than manned vehicles. Automated haul trucks do not need to stop for breaks or for shift changes, he added, and they also improve safety.
Sandvik Mining and Construction also recently launched its OptiMine visualization system. Its 3D Mine Visualizer module allows miners to compare a digital mine model with the real mine and make changes in real time. Other companies involved in digitization and automation include: Atlas Copco (OTCMKTS:ATLKY), Joy Global (NYSE:JOY), Hitachi Construction Machinery (TSE:6305) and Autonomous Solutions.
The future of smart mining and automation
Research shows that despite reluctance from some companies, smart mining technologies will only become more prevalent moving forward. A Market Research Enginereport shows that the smart mining market will experience CAGR of 20.5 percent to exceed $12.5 billion in revenue by 2022. Similarly, Future Market Insights predicts that the smart mining market will see a CAGR of 14.5 percent from 2015 through 2020, reaching $13 billion in revenue.
And according to Thompson, it’s essential that companies get on board. “By identifying areas for improvement and where past successes have been won, mining operators can make the jump to digitization, increase productivity and decrease costs. The bottom line is the mining sector needs to embrace the digital opportunity or risk falling behind the productivity curve,” he said.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.