The mining industry is ripe for digitalization

Unless you have been hiding underground for the last few years, digitalization already has an impact on your private life. The combination of computers, smartphones and the internet has changed the way we interact with friends and family and changed our behaviour as consumers. Now, digitalization is changing the way we do business, and the mining industry is in a good position to make the most of the opportunities.

“Mining companies do not start with a blank piece of paper. Most of them have worked with automation for years, so they have assets that enable them to utilise digitalization,” says Mikael Lindholm, Chief Digital Officer at FLSmidth. In this Q&A he shares some insights to help other companies in the mining industry join the digital revolution.

Q: What is the first step towards rolling out digitalization in mining?

ML: First you need to agree internally on, what you mean, when you say you want to be “more digital”. Step one is to decide what digitalization means to your company and your customers. It is such a broad term that a lot of projects fail because there is no common definition.

Once you have the definition, you have to look at the value drivers in your organisation and decide which ones you want to focus on. As an example, one of our value drivers is stakeholder experience. How can we create the optimal way for the mining industry to engage with us? And how can we use digitalization to accelerate it and improve it? Digitalization is not the only – and perhaps not even the most important – driver of this process. But it is a part of the process and once every step of the process is analysed, we pinpoint how technology can strengthen it. Technology is not the driver, it is the enabler.

Q: What are the main factors driving digitalization in the mining industry?

ML: Process improvement. Digitalization is speeding up this ever-ongoing process of improving productivity. Automation is so important in this industry that terms like predictive and prescriptive maintenance are not new, they are just improving because we provide the equipment with more and better sensors that can be read and analysed remotely. The majority of our customers’ savings will be on operation maintenance, but the benefits go beyond this.

To really create value – whether to improve productivity or drive sustainability – you have to look at the end-to-end process and integrate your whole value chain. Identify where you create the most value for your stakeholders and which processes has the greatest impact on your bottom line. Is it procurement, the quality of the goods, the value assets of your stocks, or logistics?

The other major driver is sustainability. We can use digital tools to improve water management, waste management and energy management and help mines not just comply with local legislation but work actively with sustainability. This is extremely important as mining has a huge environmental impact, but once again it is about looking at the technology as the enabler, not the driver.

To really create value – whether to improve productivity or drive sustainability – you have to look at the end-to-end process and integrate your whole value chain. Identify where you create the most value for your stakeholders and which processes has the greatest impact on your bottom line. Is it procurement, the quality of the goods, the value assets of your stocks, or logistics? There are digital tools for almost every process, but you cannot do everything at once, so unless you have unlimited resources, you need to make sure that your initial projects have an impact and are aligned with your business strategy.

Q: Which technology is the most important for the mining industry to focus on?

ML: I wish there was a silver bullet, but there is not. You need to focus on the technology that supports your processes. Of course, there are some technology trends that I expect to have a significant impact on the mining industry.

Digitalization is about people, processes and technology. In that order.

The Internet of Things (IoT) has been around for a while but its impact and advantages are becoming more visible and easily obtainable. IoT is where we connect all products to the internet, so we can monitor them remotely -it is the foundation for predictive maintenance and other of the low hanging fruits of digitalization.

The digital twin is another trend you need to keep an eye on. Here, you create a digital twin of every machine in the process which means you can simulate the entire automation process including the effect on machine B and C when you adjust the settings on machine A. When you combine this with machine learning or different degrees of artificial intelligence, you have a strong foundation for a significant increase in productivity because the computers are able to simulate an unlimited number of scenarios. This can create exciting impact on everything from longevity of products, energy usage and – well probably a lot of things we can’t even imagine yet.

Also, I would keep an eye on the development of Augmented Reality (AR) where you use glasses that mix reality with computer images, and Additive Manufacturing, also just known as 3D printing. As mines are often remotely located, these two technologies can reduce the need for manpower and save precious time on transportation of spare parts.

Q: What does the digital transformation require from management and employees?

ML: Digitalization is about people, processes and technology. In that order. Any change starts with people, and we must recognise that people work differently and are attracted to different things. The sustainability aspect will help attract younger talent to the industry, and as technology opens the possibility of more work being done remotely, we will get a broader talent base for the industry.

Among Millennials – those born between 1981 and 1996 – 62% want to work for a company that makes a positive impact with half preferring purposeful work to a high salary, according to research carried out by the consultancy Global Tolerance. So, in order to attract new and upcoming talent and skills, the industry needs to look at aspects beyond human resources, such as reducing pollution, ensuring a transparent supply chain and that their tailings solutions are ecologically sustainable.

Like all other change processes management also needs to be onboard. To lead a transformation like this is not a side project. It is a top management decision, and it needs top management commitment.

All employees need to be offered training, and once you focus on the processes rather than the technology itself, some of the reluctant ones will be more open to the benefits of the change. Then there are some hard-core aspects, where you cannot deviate. Employees need to be really disciplined about data, because if people and machines do not collect and share the right data, you cannot compare data from machine to machine and from mine to mine, and then you lose one of the big advantages of digitalization. The old saying “garbage in, garbage out” very much still applies today.

Like all other change processes management also needs to be onboard. To lead a transformation like this is not a side project. It is a top management decision, and it needs top management commitment. It is a bottom up process too, because many new initiatives will come from the sites where people face a challenge, but without governance from the top you will only get a number of unaligned standalone projects.

Q: Any last advice?

ML: Be open-minded. Here in FLSmidth we are fortunate to have a good legacy based on our 136 years of experience, but we still need to scrutinise our processes and look at not just how to improve the processes we have today but try to imagine how we would like these processes to be if we invent them from scratch for tomorrow.

We also recognise that success will not come internally, which is why we are keen to partner with all the best players in the ecosystem. That includes our customers, our suppliers, and partners from other industries. There is a lot of buzz about digitalization, and everyone can show magic on a PowerPoint presentation. But the proof of the pudding is in the eating, so my last piece of advice is to work with someone who already has a proven track record.


 

About Mikael Lindholm

In mid-2018, Mikael Lindholm was appointed as the Chief Digital Officer (CDO) bringing his extensive experience of creating, planning, implementing and integrating strategic direction to the company. Mikael has worked at the forefront of digitalization within global Internet of Things since mid-2000 - latest in a position as Vice President, Internet of Things Asia at Telenor. His previous experience includes first-hand experience from both service- and traditional manufacturing industry on a strategic and operational level.