For many mines, there is still significant work to be done in terms of improving operating energy efficiencies, and a sound understanding of the benefits of digitalisation could be the key to unlocking considerable value in this endeavour, says professional services firm EY South Africa advisory services partner Ed Stephenson.
He notes that, although mines have looked to new technologies to drive productivity gains during the slow economic recovery from the global financial crisis of 2008, there is now a degree of plateauing in the uptake of new systems and equipment. “Mining companies are looking for the next step in improving productivity – and this is where we believe digitalisation can play a key role.”
While there is a lot of interest in incorporating digitalisation with the rise of renewable energy in the mining sector, Stephenson stresses that, before companies attempt to incorporate new energy solutions, they must consider the value that can be unlocked by simply improving energy efficiencies. He points out that, owing to digitalisation, companies can now access detailed information about where and when energy is being used in daily operations, which enables them to pinpoint areas where creative thinking can reduce overall energy use.
“Once a mine gains a more thorough understanding of its daily energy requirements, it can further achieve clarity on where an injection of renewable energy can provide maximum benefit for operations,” says Stephenson.
He explains that, by understanding exactly which behaviours and equipment in the production process are sapping energy unnecessarily or excessively, mines can modify operations to increase energy savings before investing in new energy solutions. Moreover, should cogeneration options become a reality, companies can make the most of the strategic value of their investments by, for example, reducing the size and storage capacity needed to accommodate an additional power source.
“There is a lot of talk among companies mining in Africa about microgrids, renewables and cogeneration, but there is a lot of uncertainty about how to tie all these options together in a coherent solution that will achieve the best possible results. Digitalisation can help drive understanding, with insight on the energy use patterns of individual pieces of equipment guiding a bottom-up approach to improve energy efficiencies of mines.”
EY mining and metals advisory leader for Africa Wim Hoogedeure notes that such an approach often leads to an experimental process where solutions are implemented on a small scale and modified until they are successful and can be implemented on a larger scale.
“The important thing is for mines to just get going. The fear of failure when it comes to digital investments has discouraged many companies from continuing to keep pushing for digital. However, those that continue to do so are on the right track, while those who don’t are putting their companies at risk.”
Hoogedeure explains that the integration of digital technology can facilitate the data-driven management of variability in mining processes and provide multiple avenues for improving productivity. He points to the manufacturing sector as a prime example of an industry that has used the Internet of Things, advanced analytics, robotics and artificial intelligence to manage costs and improve efficiencies.
“The potential applications of digital solutions in any industry are vast, but it’s really about how better access to and use of information can enable a business to improve decision- making regarding its operations and, in turn, enhance productivity and boost profits,” says Stephenson.
However, while the mining sector has acknowledged the need to digitalise, Hoogedeure notes that an industrywide digital disconnect is evident as companies – overwhelmed by information and the cost implications of reinventing their businesses – grapple with the practicality of integrating digital approaches into operations.
“It is easy to get lost in the idea of digital and there is often much ambiguity about where to start. Companies need to be clear about the fundamental business problem they want to solve – there is no point in implementing a flashy digital approach if it does not deliver tangible margin increases.”
To successfully integrate digital solutions in mining operations, he stresses that companies must take a holistic approach, consider the mining value chain in its entirety and cultivate an organisational structure and culture that will support its success. Companies must also have a thorough understanding of their operating model and be willing to think creatively as mining portfolios are reshaped and resources become increasingly difficult to access in remote locations.
EY is, thus, focusing on helping companies realise the potential value that can be unlocked through digital solutions and disruptive technology.
Stephenson adds that it is important that the implementation of digital approaches be focused on tangible benefits and aligned to meet company- specific needs. “In the present economic climate, it is crucial that new solutions demonstrate a commercial advantage,” he says, highlighting that companies are starting to make headway in realising the possible rewards linked to increased operational control afforded by digitalisation.