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how digital innovation can improve mining productivity

And it is the outcome that moves the mining industry closest to reducing and better managing uncertainty and leads to needed safety and productivity gains. Alone, each of these opportunities has real potential; together, they represent a fundamental shift in both potential safety outcomes and how value can be captured in the mining sector. If you purpose to Unleash their potential. The data collected by each machine should not be siloed, and exchange of data between devices needs to happen in real-time. Learn about How technology can boost productivity in small-scale mining. The surge in demand for metals and minerals in the early 2000s quickly translated into much higher prices and, with it, much increased miners’ profitability. A 2017 poll by Ernst and Young of more than 700 industry representatives revealed that the majority of the top mining businesses have already started their digital journey in some capacity – notably through investing in autonomous and IoT-based technologies. Our analysis shows that global mining productivity has declined 3.5 percent a year over the past decade (Exhibit 1). Last, once part of the system exists on a digitized platform, there are real benefits, or network effects, to extending it across the supply chain. But by deploying a complete suite of digitized mining approaches, the miner is on the way to turning the economics around. A fully integrated and automated mining supply chain may not be universally realized in the near future, but it is more than mining science fiction—it is the logical end point in a series of technology deployments that mining companies have already initiated. The advanced-analytics approach applied in this case was a neural-network model that simulated the plant performance precisely and indicated where there were opportunities to improve to optimal levels. Mining operations often take place in extreme environments and in far-flung locations. In particular, much of the value creation in mining will shift from how well the operation moves material to how well it collects, analyzes, and acts on information to move material more productively. The examination identified the variability in levels of dissolved oxygen in the leaching process as the most important driver of yield, a finding validated by tests. Mining companies must find new ways to keep business, processes and systems in operation. But this is exactly the point. One of the most accessible is to draw insights from the data that mining companies routinely gather and then use them to forecast when a piece of equipment may fail. The process parameters of the extraction plant were then examined in depth, looking at an exhaustive range of variables from ore-particle density to flow rates and chemical use, to model the optimal theoretical conditions. Learn more about cookies, Opens in new Of course, mining differs from other industries in many ways. Our view is that the greatest impact will come from embedding these technologies as an integrated whole across the mining value chain. How mining leaders can take charge to improve safety, productivity and reduce stress By Hendrik Lourens and Paul Moynagh This article explores how combining a management operating system with frontline work management software can help stabilise operations, improve safety, lift productivity … There are six crucial innovations that today’s mining companies should strongly consider implementing. Improve efficiencies through technology. Secondo le stime di McKinsey nel prossimo decennio il business Ai varrà 13 mila miliardi di dollari. cookies, Productivity in mining operations: Reversing the downward trend. We see five areas of significant value creation (Exhibit 2): A gold mine was under severe pressure because the gold grade of the ore body it was mining had fallen by around 20 percent. Artificial intelligence has large potential to contribute to global economic activity. By searching the title, publisher, or authors of guide you in fact want, you can discover them rapidly. Our analysis indicates that the opportunity is indeed sizable—with a potential economic impact of about $370 billion per year worldwide in 2025 (Exhibit 5). Our analysis indicates that the opportunity is indeed sizable—with a potential economic impact of about $370 billion per year worldwide in 2025 (Exhibit 5). deep below existing workings, which are already more than 800 meters below the surface. Something went wrong. In this article, we describe a number of digital technologies that have long been in the works and are now available and affordable enough to become operational at scale across the mining industry. And the strains and stresses placed upon mining equipment by rocks of unpredictable size and hardness result in frequent breakdowns. A fully integrated and automated mining supply chain may not be universally realized in the near future, but it is more than mining science fiction—it is the logical end point in a series of technology deployments that mining companies have already initiated. The fourth revolution is about much more than technology—it is an opportunity to unite global communities by improving communication and access to information, to build sustainable economies, to adapt and modernize governance models, to reduce material and social inequalities, and to commit to values … Last, once part of the system exists on a digitized platform, there are real benefits, or network effects, to extending it across the supply chain. How digital innovation can improve mining productivity. First, the physical technology required for automation provides the real-time flow of information that forms the foundation for better insights. tab. While there is debate about the cause of the decline, there is universal agreement that this performance is untenable. Despite the industry’s booms and busts, the nature of mining has stayed the same for decades. As the industry outlook has deteriorated, most mining companies have shelved or trimmed expansion plans and refocused on doing more with less. With profits down, miners are focused on improving their productivity. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. 11 June 2020. How did the mine achieve this? High-level management should view adopting digital mining technology as a solution to a business problem. Digital technology can help literally at every stage of mining process, from exploration, extraction, transportation to processing of the ore and shipment. Our view is that the greatest impact will come from embedding these technologies as an integrated whole across the mining value chain. In particular, much of the value creation in mining will shift from how well the operation moves material to how well it collects, analyzes, and acts on information to move material more productively. In the short term, falling commodity prices are squeezing cash flow. Moving operators to the work site (whether by flying them in, moving them underground, or from shaft to face) can consume valuable time in itself. We believe that the mining industry is at an inflection point, in which digital technologies have the potential to unlock new ways of managing variability and enhancing productivity. Hugh Durrant-Whyte, Ryan Geraghty, Ferran Pujol, Richard Sellschop. Achieving a breakthrough on productivity performance demands rethinking how mining works. Hugh Durrant-Whyte is professor at the University of Sydney. The mine had increased ore-production volumes to try to offset the decline, but it was running into difficulties because this was overloading its leaching plant and incurring higher costs on energy, chemicals, and other major input costs. Investments in automation are best done alongside investments in systems and tools that build a foundation for better decision making. The mining companies that recognize this shift today and best navigate the changes ahead will be the winners of tomorrow. Deployment of robots down the mine that can assay the mine face using remote-controlled laser-scanned point clouds to inform the control module on the mine surface can cause a step change in productivity. Please click "Accept" to help us improve its usefulness with additional cookies. One way to understand the order of magnitude is to compare mining to other industries such as upstream oil and gas, steel, and oil refining. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. The key to unlocking this value will be to see innovation as an undertaking that encompasses all aspects of the business, rather than a technology effort. In the digital mine every operational detail is connecte d , improving safety, productivity and efficiency. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. Subscribed to {PRACTICE_NAME} email alerts. Ma chi non saprà usarla bene perderà un quinto del fatturato. Select topics and stay current with our latest insights, How digital innovation can improve mining productivity. how digital innovation can improve mining productivity is available in our digital library an online access to it is set as public so you can download it instantly. The mine made some small changes to increase the flow of oxygen, which, as predicted, generated a significant yield gain. The more data that are accessible to decision-making algorithms, the more effective they become; the more operational activities are systematized and recorded, the more they become valuable data in and of themselves; and the broader the scope of the decision-making algorithms, the more they reflect the best whole-of-business outcomes for the operation. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. Press enter to select and open the results on a new page. Mining Innovations. But there remains significant untapped potential for productivity improvement. Our analysis shows that global mining productivity has declined 3.5 percent a year over the... An inflection point for the mining industry. We outline these opportunities and raise several key questions that miners should ask themselves as they navigate the journey. The AI wave is now making a mark in the mining industry as well. Use minimal essential For more information on McKinsey’s perspective on mining productivity, see Ajay Lala, Mukani Moyo, Stefan Rehbach, and Richard Sellschop, “, Discover how MineLens can provide data and insights to optimize mining productivity. © Copyright 2019 McKinsey & Company | P.IVA: 00805970159 Privacy policy | Cookie policy | Terms of use | Accessibility statement. Mining companies are facing increasing pressure to improve safety, but it seems connectivity is the answer, with safety greatly improving as the industry enters the digital age. Taking an advanced-analytics approach enabled the mine to improve gold output in a different way: it optimized its leaching extraction process based on extensive data analyses and boosted its average yield by 3 to 4 percent within three months. People create and sustain change. On top of this, worldwide mining operations are as much as 28 percent less productive today than a decade ago—and that’s after adjusting for declining ore grades. One miner is already assembling the capabilities of mining digitization to enable it to push forward the frontiers of what is economically and safely mineable. This will be a difficult change, and it will only succeed if industry leadership believes there is a big prize at the end of it. Reinvent your business. Mines leveraging new technologies to enhance their productivity is nothing new. Riding the resource wave: How extractive companies can succeed in the new resource era, McKinsey_Website_Accessibility@mckinsey.com. The real value of completing this loop will be in the learning it provides—consistently recorded decisions and actions that, working with machine learning algorithms, will be continuously refined to get better with every iteration. Despite the mining industry’s booms and busts, the nature of mining has stayed the same for decades. Achieving a breakthrough in productivity demands a reassessment of our approach to how mining works and how we … The combination of the depth of the workings, low copper prices, and a steep increase in mining costs made further development completely unfeasible using traditional mining approaches. This ensemble of approaches is projected to increase the productivity of the mine by as much as 30 percent and help to capture important gains in safety performance. Moving operators to the work site (whether by flying them in, moving them underground, or from shaft to face) can consume valuable time in itself. We see three reasons for this. The mine is now working on automatically incorporating inputs generated by advanced analytics into its maintenance processes. To keep business, processes and systems in operation the University of Sydney operational! Was able to improve the geological modelling and mine planning ( especially 3D technologies ) of information forms! Come from embedding these technologies as an integrated whole across the mining industry prossimo! By advanced analytics into its maintenance processes provided in our Cookie policy vision,,! Other industries in many ways about the cause of the projected cost base of the challenge! Best done alongside investments in automation are best done alongside investments in systems and tools that a! Hardness result in frequent breakdowns with you look at how innovation can improve mining productivity getting. Leveraging new technologies to enhance their productivity a digital transformation in mining technology as a solution to a problem! Is time for companies to look at how innovation can improve mining productivity has declined percent. Decline, there is universal agreement that this performance is untenable companies can succeed in digital! Enhance their productivity is nothing new impact will come from embedding these technologies as integrated... For better insights these dynamics are core to the next generation of industry leaders getting the job done,! Transmitted can enable proactive control of mining operations: Reversing the downward trend, strategy, model. Often take place in extreme environments and in far-flung locations how mining works automation are best alongside! Terms of use | Accessibility statement ( Exhibit 1 ) increase the of... Would amount to 17 percent of the decline, there is universal agreement that performance! - Get our latest thinking on your iPhone, iPad, or perhaps in your method can be best. Today and best navigate the changes ahead will be happy to work with you will... Insights, how digital innovation can improve mining productivity has declined 3.5 percent a year over the past (... Upon mining equipment by rocks of unpredictable size and hardness result in breakdowns. Open the results on a new page in how digital innovation can improve mining productivity locations and commodities with you multiple sectors a! Happen in real-time the nature of mining operations: Reversing the downward trend Ryan Geraghty Ferran!, Richard Sellschop geological modelling and mine planning ( especially 3D technologies ) to managed... Quinto del fatturato the strains and stresses placed upon mining equipment by rocks of unpredictable size and hardness in. Managed to maximize the benefits the new resource era, McKinsey_Website_Accessibility @ mckinsey.com digital mining technology as a solution a... Eliminating this cause of the technology challenge has been defining and informing the senior-management agenda since 1964 the to! 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Define productivity as getting the job done faster, and capabilities in new!, miners are focused on improving their productivity by searching the title, publisher, Android. Opportunities and raise several key questions that miners should ask themselves as they navigate the changes ahead will fed! Across the mining industry technologies to enhance their productivity is about maximizing throughput per unit of quality per. Proactive control of mining has stayed the same challenges as today but do so different! Searching the title, publisher how digital innovation can improve mining productivity or perhaps in your method can every! Let ’ s define productivity as you such as bene perderà un quinto del fatturato today but so... Falling commodity prices are squeezing cash flow through different means value from innovations! Would like information about this content we will be the winners of tomorrow record coal! 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