Goldcorp’s Peñasquito mine: a shining example of digital innovation in the mining industry
“Historically, mining remains one of the last industries to be disrupted by technology,” observes Tim Kahl, General Manager of Operations at Goldcorp. “It’s ironic, because mining provides the raw materials for modern economies to work, but we’ve been slow to apply some of the technologies we’ve had a hand in creating.
“Over the past few years, there’s been a fundamental shift. At Goldcorp, we want to promote disruption in the mining sector and we’re focusing on digitisation. We’re trying to change the image of mining and to make use of what the rest of the industrial world is doing digitally. I think in this way, Goldcorp is really leading the pack.”
With every industrial revolution, businesses have evolved to create something unlike anything that has come before.
Traditionally, the mining industry has been sluggish in its uptake of new technologies – but not at Goldcorp.
Keen to disrupt the mining sector, the Canadian mining giant is zeroing in on emerging technological trends including automation, data analytics and even drone technology to redefine the way it does business.
In doing so, Goldcorp is ushering in a new era of digital transformation and operational excellence.
A massive operation
In the state of Zacatecas in Mexico, Goldcorp’s flagship mine is a mammoth operation to behold.
Extraordinary in both its scale and production, the Peñasquito mine stands as the fifth largest silver mine in the world and the second largest in Mexico.
“Peñasquito is by far the biggest open pit in Goldcorp’s portfolio,” Kahl says. “It accounts for 30-40% of all of Goldcorp’s production in terms of total metal output and it provides about 33% of the company’s total revenue.
“We also have a lot of personnel and contractors on site,” he adds. “Therefore, we’re not just seeing how digitisation can increase our productivity, we’re also using technology to enhance safety and the more human elements of mining.”
Across the mining sector, fluctuating metal prices can wreak havoc on a company’s bottom line; as a polymetallic mine, Peñasquito circumvents this issue.
Producing gold, silver, lead and zinc, Goldcorp can adapt its strategy and focus on the most in-demand metal on the market.
A multi-metal strategy
This also involves adapting its strategy and Kahl says this is where digitisation can be critical.
“Depending on the market price for metals, we can either be focused on gold or zinc but this involves different strategies,” Kahl explains.
“Digitisation can really help us determine what metal we should focus on and what operating model we need use. There are so many different technologies we can use – devices, apps, cloud technologies, next-generation analytics, robotics, smart sensors, virtual reality and artificial intelligence, for example.
“These are quickly influencing and challenging our conventional business model. Therefore, we have to be adaptive and really understand how we can transform our business model going forward.
“While digitisation gets the right data to the right people to make decisions more quickly, we haven’t limited innovation simply to digitisation. Goldcorp’s ambitious Towards Zero Water strategy is one example. Through both continuous improvements on our recycling rates and breakthrough innovation, the target is to reduce freshwater consumption to zero. We’re fundamentally re-thinking every aspect of our business to be safer, more productive and more responsible.”
The team at Goldcorp have ambitious plans for the future. Last year, it launched an impressive plan to increase its production by 20%, lower all-in sustaining costs by 20%, and grow its reserves by 20%, all by 2021.
Undoubtedly this goal wouldn’t be possible without the concerted efforts of its digital strategy.
“I truly feel that the next wave of productivity gains are going to be primarily driven by technology and digitisation,” Kahl notes. “It’s even more important to recognise this if you're a multi-national company like Goldcorp.”
An integral management operating system
Instilling a culture of continuous improvement is something which Kahl is fiercely passionate about. That’s why he says the company’s management operating system (MOS) is the cornerstone of its successes.
“I've worked on many international mines from Argentina, Chile and Peru, to the Dominican Republic,” recalls Kahl. “What's a common thing that's missing at a lot of the operations? A management operating system.
“It’s kind of a playbook: it’s a guide which shows our standards, procedures, how we run and operate our business,” he explains. “We use our MOS to really stay on top of our operations and monitor how we're doing.
“Short interval control is critical,” he continues. “We really found that we can get large productivity gains by having short interval control installed. At all levels – from metallurgy to mine operations, processing, and even on the administration side – we've got MOS installed and I think it’s really the cornerstone of Peñasquito. It's helped us turn a corner in terms of our productivity numbers, and continuous improvement projects.”
Tapping into automation
From automated drills to self-driving trucks, automation is bringing the world of mining to new heights and it is an area where Goldcorp is seeing promising results.
“We're currently trialling autonomous drilling and, although it’s still in its infancy, we've had great successes,” says Kahl proudly. “The productivity gain has been incredible. We've seen approximately a 25% improvement in our total productivity from the autonomous drills. Now we're looking to convert and replace drills as we retire them with autonomous alternatives.”
Often referred to as the ‘new oil,’ big data is also helping Goldcorp address the barrage of challenges that the mining industry faces today.
To reap the benefits of data analytics, the Canadian firm has teamed up with leading data management companies to unlock the potential of the Mexico mine.
“We need new technologies to provide analytics for real time decision making,” notes Kahl. “In the last couple of years, we have been working closely with companies like OSIsoft to integrate thousands of sensors, collect data from all areas of the mine, and together unlock the power of data analysis and process control. It’s about using this data to more accurately forecast our performance plan and to drive improvements through short interval control.”
This is just the beginning, Goldcorp is also partnering with technology giant IBM to develop new ways to analyse geological data. “By utilising IBM’s Watson artificial intelligence and machine learning system, we expect to improve our success and velocity in exploration.”
The highest safety standards
Health and safety is a huge talking point in the mining sector and it is here where the true value of data and technology really shines.
At its pioneering Peñasquito mine, Kahl explains how Goldcorp is employing digital monitoring systems and Light Detection and Ranging (LiDAR) to monitor any potential harmful events or conditions.
Zooming across the skies of its deep open pit, Goldcorp has also tapped into the use of drone technology to monitor its pits, its roads, and more.
On top of this, his team is also exploring collision avoidance technology to help reduce equipment damage and the number of metal on metal contacts.
Working alongside KPMG and Finger Food, Goldcorp is also exploring using augmented and mixed reality technologies to provide operators real time data right at the machine interface to improve operator efficiency and safety. “We’re making great strides in our technology but it’s not just about productivity, it’s also about protecting our people,” Kahl says.
Yet, whilst Kahl highlights the remarkable digital transformation Goldcorp has undertaken, he doesn’t underestimate the talent and expertise of his team who helped make this vision a reality.
Offering a positive work culture means that the Canadian firm has been able to attract, and more importantly retain, some of the best talent in the industry and, by hiring locally and supporting local business wherever possible, 73% of today’s workforce at Peñasquito is from the local Zacatecas region.
“Typically, a mine isn't going to be near a large urban area and so it can be a challenge to attract good, young expertise,” notes Kahl candidly. “It is difficult, but we have been able to attract some very talented people. Ultimately, what it comes down to is that there's got to be a good challenge for that individual, we have to be flexible with their work schedule, and we have to make sure it’s right for them.”
With such a root-and-branch transformation of its digital offering, Goldcorp has completely redefined its daily operations. Yet with such vast changes, Kahl says there has definitely been a cultural shift within the company to help promote this use of innovative technology.
“We're also trying to make our workforce more digitally-enabled,” adds Kahl. “In a portion of the pit, we’ve already implemented an electronic operator scorecard and in conjunction with this, we are aiming to more effectively utilise our work order management system.
“I think in general it's going to help us reduce our costs,” he continues. “Some of the issues we face on a day-to-day basis are fairly complex, and by utilising this we can really drive our value chains. In the end, I think it's going to improve our safety, our costs, and improve our productivity.”
Keen to promote collaboration within the sector, Goldcorp has also formed strong relationships with industry-leading companies including Gruas del Norte, Alchisa (Aceites Lubricantes de Chihuahua S.A), Permex, Komatsu, FLSmidth, Fluor, and Orica. In doing so, the Canadian firm has gained the expertise and knowledge it needs to raise the bar in the mining sector.
Overcoming hurdles and achieving sustainable growth
Goldcorp has completely reinvigorated its digital strategy with diligence and ingenuity. Yet this hasn’t come without its challenges.
“I think having an effective, functional network is always tough,” reflects Kahl. “As you get more connectivity points and your usage goes up, it becomes more and more critical. As you go down in the pit it gets harder to get signal and that's been one of the biggest challenges we have faced – getting full coverage throughout our pit operation. We're working diligently to tackle this and we have implemented a few architectural changes to strengthen our connection backbone.”
Technological innovation has created riptides in almost every industry and it’s been no different in the world of mining.
Peñasquito is an exemplary mine which clearly demonstrates the true value digitisation can provide in terms of a mine’s operational excellence, safety, and financial standing.
Yet, for Kahl, it seems this focus on digitisation and innovation isn’t simply about collecting new software and gadgets, it’s about seeing continuous improvement and creating meaningful change in the sector.
“When I started out my career in the mining industry, the environment promoted continuous improvement and fostered new ideas at all levels of the organisation,” he says.
“When I was a young metallurgical engineer I used to think that continuous improvement was just additional documentation, but I quickly realised that it’s what transforms your business, and what makes it profitable. It’s a part of our operations, our atmosphere and our culture and it makes work so much easier.
“I think it's incredibly important, and everywhere I go I try to instil that continuous improvement culture because it's really been instilled in me since I started in this industry. In the late 1990s or early 2000s the gold market value fell to levels of around $250 per ounce. I think it was continuous improvement which distinguished which companies remained operable or not.
“In 2018 we've committed to gain $25mn in additional revenues through cost savings, production and productivity factors at Peñasquito. I really think continuous improvement and digitisation are what we need to achieve this.”