Innovative strategies for a new era of mining
Global and industry forces are changing the world of mining as we know it. Mining companies are faced with new challenges, including heavy debt loads, oversupply of many commodities, and more complex, lower-grade ore bodies. Overlaying the traditional mining cycle is a new level of complexity. Society and business are being reshaped by rapid advances in technology, and stakeholder engagement has increased. Shifting public attitudes are moving us toward a more sustainable, lower-carbon future.
The mining industry has reached an inflection point. The days when cost-cutting alone could solve every problem are behind us. As an industry, we need to explore new ideas, including disruptive technologies and innovative business models. We need to change the way we think about mining, to adapt to these unprecedented changes and emerge stronger.
In the future, mining companies will need to consider ways to create financial, social, and environmental value from mining projects. That means developing more innovative strategies that increase the value of mining operations, while identifying ways to create positive social and environmental outcomes. Today, that means converting challenges into opportunities.
A new energy approach at Glencore’s Raglan mine illustrates this. Raglan has set a new precedent for harvesting wind energy on an industrial scale in Canada’s North, while creating benefits for local Inuit communities. Working together with Hatch and implementing our unique Microgrid controller technology made it possible to bring stable, renewable power to a site that had been heavily reliant on diesel. As an integrated team, Glencore, TUGLIQ Energy (owner of the wind turbine and storage system), and Hatch were able to overcome great challenges to make this remarkable project a reality.
Over the last decade, our engineers have developed and implemented more than 40 unique technologies that have given our clients a competitive advantage. Today, we are partnering with our clients to create, commercialize, and implement technologies that tackle combinations of new challenges for their businesses and society.
At a time when many miners lack capital, one strategy is to support our clients through operational readiness, asset management, commissioning and start-up. In other words, better operational support. At the same time, we see great potential in new digital breakthroughs and disruptive technologies that are bringing new value propositions to the market. Whether it’s drones, 7D BIM (building information modeling), or digital asset management, technologies will play a large role in the mines of the future.
However, some of the technologies being talked about today, when analyzed, have no direct connection to actual problem- solving or value creation. It’s critical that the mining industry has a clear line of sight to those technologies that create real, measurable value and better business results. What’s needed is a compass to find our way – one that uses analytical, fact-based assessments to determine how applying specific technologies, tools, and business processes will add real value.
At Hatch, we’ve found that the best linkages between technologies and value are identified by assessing four key mining intensities: labor, energy & water, processes, and capital. This method evaluates the efficiency of mining processes and resources – the people and workplaces, equipment and production, and energy and water – per unit of product.
Using a value lens to analyze business and technical decisions will provide different answers than a cost analysis alone. For example, an operation may cut staff, but if a fundamental change to technology hasn’t been made to compensate for this loss, the mine’s performance will decline. A value lens can also avoid decision- making that pushes economies of scale beyond the optimum level. So purchasing more super trucks may not be a good investment when considering the incremental costs of moving steel up and down ever-deeper mines and servicing these vehicles with ever-larger facilities.
We know that mining is a water-intensive industry and must be responsibly managed. To reduce water intensity, mineral processing flow sheets must minimize the amount of water that contacts the ore, keeping it as dry as possible, for as long as possible.
This has benefits for tailings, water treatment and conservation, and reduces potential environmental contamination.
Smarter Mining Solutions
Globally, the mining industry is moving toward several key enabling technologies that will help build the mine of the future.
As technology integrators, we are working with our clients in several of the following key areas to help move the industry forward.
- Technology Road Maps: In a digital age, the mining industry needs clear technology road maps that provide custom solutions. The goal is to create integrated, optimized, and appropriate technology solutions for each operation.
- Electrification: Our clients’ vision is clean, safe, automated mines operating solely on electricity, at half the energy intensity of today. The benefits include a healthier, safer work environment, particularly for underground mines, less diesel, and reduced operating costs. Electrification also lends itself to integrating renewable power into mine control systems.
- Mine-to-Mill: From the very first fracturing of rock, operators can begin the process of increasing the value of the ore, rather than waiting until it reaches the mill. By using information about geology, minerals, and ore body characteristics, mining can be conducted in a way that makes removing impurities easier and delivers a more valuable end product, faster.
- Mining Automation: Automating a mine makes the entire process leaner and more cost-effective. The automation of mining processes and software is a major focus for the industry right now, but is sometimes misunderstood. When done right, the potential benefits can be anywhere from 10 to 40 percent improvement in productivity.
- New Mine Financing: In the future, the industry will need to find cheaper ways to mine and reduce capital intensity. As financial markets take an increasingly dim view of the risks associated with mega projects, alternative ways to attract investment will become necessary. This may mean reconfiguring aspects of mining projects to appeal to different classes and types of investors, from the high-tech investor to those willing to invest in a project’s infrastructure requirements.
Despite current market conditions, there are good reasons for the mining industry to be optimistic. Bold, new ideas are challenging the status quo. More and more mining companies are looking to smarter, more innovative solutions to overcome today’s challenges. Mining companies and their leaders are becoming more empowered to redefine the way they operate. As this transformation takes place, we’ll need to keep our focus on solutions that deliver real value to the industry, our stakeholders, and a rapidly-changing environment.
John Bianchini is chief executive officer of Hatch.