FEATURE: 5 Characteristics of Mining That Need to Improve for the Future
When envisioning the future of mining, everyone has a different idea. Because the public opinion sees mining as an old, dirty, dangerous and environmentally contentious industry, companies have two options: either innovate or stagnate.
“Mining companies will have to lose the rigid and ironclad business models and practices of old and become fluid, flexible and agile enterprises poised to pounce on opportunity,” according to a report by IBM titled Envisioning the Future of Mining.
“At the same time, many (if not most) of the core mining activities, practices and competencies will be carried forward from practices today. Sometimes the question is “what will be different?” and sometimes “what will we do better?”.
The one constant in the mining industry is change.
The following characteristics are a composite of all the best and brightest practices in mining. We break down what needs to be discussed, enhanced and built upon for the future of mining.
1.) Business model innovation
Historically, the mining companies have chased production growth at the expense of productivity on a volume and cost basis. Well, times are a-changin.
New business models should focus on value, both for the organization and the customer. Mining companies should focus on realigning relationships to build financial solidity of suppliers, partners and customers. This will in return provide long-standing profitable relationships that enable companies to transcend commodity-trading relationships only.
• Allow their business model to be driven by customer demand
• View supply chain holistically and optimized as an integrated process
• Make operations become geography-independent
• Learn from other industries, partners, acquisitions and other sources
• Be forward-looking utilizing smarter plans and advanced business analytics
2.) Asset management
Good asset management considers and optimizes the conflicting priorities of asset utilization and asset care, of short term performance opportunities and long term sustainability, and between capital investments and operating costs, risks and performance.
In the future, companies will need a revitalized outlook and approach to asset management. Companies should view the entire asset management life cycle and take a wider view of asset classes and how they each behave and contribute value differently.
• View assets as instrumental and intelligent, reporting their location, their status and other key metrics remotely and automatically.
• Include a broader array of asset classes, including land, fields, inventory, information technology, real estate, and infrastructure.
• Implement a centralized asset management program, leveraging sophisticated asset management practices and integrated asset management tools/technologies.
3.) Governance and workforce collaboration
According to a study in Australia, mining companies are among the worst performers in an assessment of the corporate governance standards compared to other industry sectors.
The future of mining will improve its utilization of governance and workers to drive change and improvement. Companies will adopt new strategies for collaboration among departments, geographies, phases of the supply chain, partners, customers and suppliers that will become critical to building enterprise agility.
• Collaborate with suppliers, customers and partners to work on common issues, improve relationships, improve productivity and create better and more accurate plans.
• Communicate and collaborate across the entire enterprise and across multiple mines and sites. Activities should be coordinated through a central control room or location.
• Allow research and design to be fueled by collaboration across the company; through vendors and partners; and within the industry.
4.) Energy and environment
The time is now for the mining industry to take a proactive stance in energy and the environment to make substantial societal changes as well as improve costs and attract new talent. New programs and technologies will be implemented more frequently to manage consumables such as carbon, water and fuel from end to end. Being environmentally friendly or “going green” will be more than just a marketing ploy.
• Integrate Corporate Social Responsibility (CSR) programs into as many aspects of their business as possible.
• Utilize process, information and analytical tools to manage environmental and energy consumables.
• Attract eco-friendly advocates to work and support clean mining operations.
5.) Remote operations
Although almost everyone knows automation is the future of mining, most mines are still run with a localized approach. The idea behind remote locations is to move control centers to a centralized location where mining performances can be measured across sites and locations. This allows for metrics and measurement processes to be standardized and universally adopted.
• Manage sites centrally from one location to achieve improved control of the enterprise. The reduction of redundant management reduces costs.
• Utilize automation including robotic and remotely controlled equipment and transportation when appropriate for the company.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.