Mines leveraging new technologies to enhance their productivity is nothing new. While there is debate about the cause of the decline, there is universal agreement that this performance is untenable. Unleash their potential. 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. A large North American open-pit mine applied an advanced analytics–based approach to how it maintained its hauling trucks, and within six months captured 12 percent savings in labor, services, and spare parts and improved availability by 5 percent. This trend is evident across commodities, geographies, and most mining companies. The increase in yield translated into a sustainable $10 million to $20 million annual profit improvement, with no need for substantial capital outlays or reorganizations. The authors wish to thank Dan Aharon, Michael Chui, Vasanth Ganesan, Andrew Gonce, Stephan Gӧrner, Sigurd Mareels, Agesan Rajagopaul, Dawid Rychlik, and Jason Zheng for their contributions to this article. For more information, see Mehdi Miremadi, Subu Narayanan, Richard Sellschop, and Jonathan Tilley, “The age of smart,safe, cheap robots is already here,”. Digital Connectivity. The COVID-19 pandemic has forced companies to rapidly evolve, but without past, present and future innovation, many of these changes would have been impossible. The mine is following an aggressive timetable to achieve full implementation by 2025, at which point the mine’s operating costs have the potential to be as much as 30 percent below those of a traditionally operated deep-underground copper mine. This timely webinar – presented by Australian Mining and Rockwell Automation – discusses how mining operations can benefit from embracing new technologies to improve system efficiencies and the safety of employees. In the mining business, productivity is sometimes less space being consumed by an engine, leaving room for more payload or less time to accelerate, thus maximizing the number of trips a day. 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. For more information on McKinsey’s perspective on mining productivity, see Ajay Lala, Mukani Moyo, Stefan Rehbach, and Richard Sellschop, “Productivity in mining operations: Reversing the downward trend,” May 2015. Thus, we see it as a natural destination; the question is how long it will take to get there and to navigate the journey successfully. End of the investment boom. 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. *McKinsey & Company, “How digital innovation can improve mining productivity,” November 1, 2015. The large-scale adoption of four different clusters of technologies is accelerating: Taken together, these technologies enable a fundamental shift in the way mining works—a shift marked both by harnessing the flow of information to reduce variability in decision making and by deploying more centralized, mechanized operations to reduce variability in execution. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. This trend is evident across commodities, geographies, and most mining companies. Capturing the value from digital innovations represents a fundamental shift in vision, strategy, operating model, and capabilities in the mining industry. Digitization, in particular, offers several useful approaches. how-digital-innovation-can-improve-mining-productivity 1/1 Downloaded from monday.cl on November 28, 2020 by guest [PDF] How Digital Innovation Can Improve Mining Productivity Eventually, you will utterly discover a other experience and execution by spending more cash. AN INFLECTION POINT FOR THE MINING INDUSTRY 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. Mining companies must find new ways to keep business, processes and systems in operation. 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. Looking ahead, many existing mines are maturing, resulting in the extraction of lower ore grades and longer haul distances from the mine face; ore-body-replacement rates are in decline; and new-mine-development times are increasing. Embedding vast numbers of sensors in physical objects — churning out large volumes of data for analysis and enabling communications among machines — is increasingly affordable and accessible. Mining Innovations. In the house, workplace, or perhaps in your method can be every best place within net connections. 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. Please click "Accept" to help us improve its usefulness with additional cookies. 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. 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. Learn more about cookies, Opens in new Modern mines have to be digitally connected. Of course, mining differs from other industries in many ways. Based on our benchmarking, we observe a global average overall equipment effectiveness (OEE) performance of 27 percent for underground mining, 39 percent for open-pit mining, and 69 percent for crushing and grinding—compared with 88 percent for upstream oil and gas, 90 percent for steel, and 92 percent for oil refining. 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. Smart planning and coordination of activities are required to mitigate variability caused by external forces; disciplined execution is needed to eliminate variability that miners create themselves. Second, in time, these decisions will be fed back to autonomous machines, not to human operators. Productivity drive and cost cutting sees record Australian coal and mineral production. Our books collection hosts in multiple locations, allowing you to get the most less latency time to download any of our books like this one. our use of cookies, and An inflection point for the mining industry 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. By using this Site or clicking on "OK", you consent to the use of cookies. Despite the industry’s booms and busts, the nature of mining has stayed the same for decades. 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. The key to the next era in mining is recognizing that this situation is no longer inevitable—that, with the right investments, miners have the opportunity to reduce and, in some cases, eliminate the uncertainty. Hugh Durrant-Whyte is professor at the University of Sydney. Over time, mining work will evolve toward knowledge-based jobs that solve the same challenges as today but do so through different means. As the industry outlook has deteriorated, most mining companies have shelved or trimmed expansion plans and refocused on doing more with less. Let’s define productivity as getting the job done faster, and increased productivity helps miners do more with less. People create and sustain change. How digital innovation can improve mining productivity The productivity imperative. Of course, mining differs from other industries in many ways. Use of automated continuous-mining techniques will make it possible to substantially increase labor productivity and to work in conditions that humans would not be able to tolerate due to heat and the risk of rock-face collapse. Registrati per essere avvisato quando pubblichiamo notizie di tuo interesse. © Copyright 2019 McKinsey & Company | P.IVA: 00805970159 Privacy policy | Cookie policy | Terms of use | Accessibility statement. This would amount to 17 percent of the projected cost base of the industry globally in 2025. Investments in automation are best done alongside investments in systems and tools that build a foundation for better decision making. Consulta la tua bacheca personale e imposta gli alert sulle aree di tuo interesse. The mining companies that recognize this shift today and best navigate the changes ahead will be the winners of tomorrow. Ryan Geraghty is an associate principal in McKinsey’s Sydney office, Ferran Pujol is a senior expert in the Santiago office, and Richard Sellschop is a principal in the Stamford office. deep below existing workings, which are already more than 800 meters below the surface. Mining companies worldwide largely lost sight of productivity goals that had underpinned operating discipline in the lean years of the 1980s and 1990s, when parts of the industry had set a healthy record in productivity imp… Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. If part of the truck fleet is undergoing greater stress—for example, carrying heavier loads, with more stops and starts—the maintenance-management system will be alerted, leading to an increase in maintenance frequency for those trucks, which in turn will trigger the scheduling of required maintenance crews and the ordering of replacement parts. 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. 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. Information resources such as CommDev can help mining companies better plan projects and find successful case studies that model how they can work with stakeholders. Changing the game with digital innovation. We see three reasons for this. 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. These equipment deployments, in combination with advanced navigation systems and the use of X-ray-fluorescence and X-ray-diffraction scanners, can help to ensure that the mining will remain targeted on the richest part of the copper veins, increasing mined-ore quality. Big data and analytics might improve the geological modelling and mine planning (especially 3D technologies). The data collected by each machine should not be siloed, and exchange of data between devices needs to happen in real-time. McKinsey & Company. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. 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. 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. Investments in automation are best done alongside investments in systems and tools that build a foundation for better decision making. The results of a unique way of production or we can say the achieving the productivity demand stimulates the industry for the new ideas of mining to keep rethinking. 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). The information transmitted can enable proactive control of mining operations. Mining operations often take place in extreme environments and in far-flung locations. The industry has shifted its focus to improving productivity by “sweating” existing assets, but this strategy will go only so far. Achieving a breakthrough on productivity performance demands rethinking how mining works. But this is exactly the point. It is time for companies to look at how innovation can increase both productivity and safety. The result has been that mining productivity has leveled off and even started to recover in some locations and commodities. Second, the use of clustering algorithms made it possible to more accurately identify the cause of equipment failures. 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. Flip the odds. The potential to achieve such a breakthrough is now coming within the industry’s reach through digital and technology innovations that could transform key aspects of mining. Is there hidden treasure in the mining industry? Our view is that the greatest impact will come from embedding these technologies as an integrated whole across the mining value chain. Artificial intelligence has large potential to contribute to global economic activity. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. Riding the resource wave: How extractive companies can succeed in the new resource era, McKinsey_Website_Accessibility@mckinsey.com. And the strains and stresses placed upon mining equipment by rocks of unpredictable size and hardness result in frequent breakdowns.

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