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how digital innovation can improve mining productivity

First, using predictive models of failure made possible by more targeted and effective maintenance, examination of the data showed that gearshift-timing variances that appeared after trucks hit a particular revolutions-per-minute level were an indicator of imminent transmission failure, and so truck-maintenance strategy was modified accordingly. 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. 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. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. The mining companies that recognize this shift today and best navigate the changes ahead will be the winners of tomorrow. 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. 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). Each opportunity is significant in itself, but achieving the full potential of all opportunities is possible only if they are pursued in an integrated fashion. Productivity drive and cost cutting sees record Australian coal and mineral production. Hugh Durrant-Whyte, Ryan Geraghty, Ferran Pujol, Richard Sellschop. Learn about It is highly variable, starting with uncertainty about the nature of the resource being mined. This trend is evident across commodities, geographies, and most mining companies. Achieving a breakthrough in productivity demands a reassessment of our approach to how mining works and how we … 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. Mining companies have also been working to identify and unlock potentially advanced AI use cases, which can ‘Uberize’ the mining industry. Mining operations often take place in extreme environments and in far-flung locations. Using this approach, the mine learned that a particular portion of the truck fleet was suffering more failures—and that all the trucks in that portion were being used in a part of the mine that had very rough roads. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. 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. In the short term, falling commodity prices are squeezing cash flow. We'll email you when new articles are published on this topic. Big data and analytics might improve the geological modelling and mine planning (especially 3D technologies). The fourth revolution is about much more than technology—it is an opportunity to unite global communities by improving communication and access to information, to build sustainable economies, to adapt and modernize governance models, to reduce material and social inequalities, and to commit to values … The process parameters of the extraction plant were then examined in depth, looking at an exhaustive range of variables from ore-particle density to flow rates and chemical use, to model the optimal theoretical conditions. Second, in time, these decisions will be fed back to autonomous machines, not to human operators. nevertheless when? For more information, see Mehdi Miremadi, Subu Narayanan, Richard Sellschop, and Jonathan Tilley, “The age of smart,safe, cheap robots is already here,”. 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. If you would like information about this content we will be happy to work with you. Unleash their potential. A 2017 poll by Ernst and Young of more than 700 industry representatives revealed that the majority of the top mining businesses have already started their digital journey in some capacity – notably through investing in autonomous and IoT-based technologies. Never miss an insight. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. 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. This makes capturing the opportunity a management challenge for the next generation of industry leaders. 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. We use cookies essential for this site to function well. The presenters and topics include: These dynamics are core to the industry’s operational performance. As the industry outlook has deteriorated, most mining companies have shelved or trimmed expansion plans and refocused on doing more with less. Mining operations often take place in extreme environments and in far-flung locations. But this is exactly the point. Please click "Accept" to help us improve its usefulness with additional cookies. How mining leaders can take charge to improve safety, productivity and reduce stress By Hendrik Lourens and Paul Moynagh This article explores how combining a management operating system with frontline work management software can help stabilise operations, improve safety, lift productivity … The result has been that mining productivity has leveled off and even started to recover in some locations and commodities. The mining companies that recognize this shift today and best navigate the changes ahead will be the winners of tomorrow. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. The combination of the depth of the workings, low copper prices, and a steep increase in mining costs made further development completely unfeasible using traditional mining approaches. Boosting production volumes became the industry’s top priority. People create and sustain change. By applying advanced-analytics techniques, the mine was able to transform its maintenance approach through two initiatives, both based on analysis of the large quantities of data already being gathered but not being used. 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. In this article, we describe a number of digital technologies that have long been in the works and are now available and affordable enough to become operational at scale across the mining industry. 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. The large-scale adoption of four different clusters of technologies is accelerating2 2.For more information on McKinsey’s perspective on these disruptive technologies and Industry 4.0 in manufacturing, see Matthias Breunig, Jamie Cattell, Richard Kelly, and Dominik Wee, “Industry 4.0: How to navigate digitization of the manufacturing sector,” McKinsey & Company, 2015.: 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. Modern mines have to be digitally connected. Artificial intelligence has large potential to contribute to global economic activity. 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. Le applicazioni nei negozi e il... Il McKinsey Global Institute in un report stima in 13.000 miliardi di dollari il possibile contributo dell'AI al Prodotto interno lordo mondiale entro il 2030. *McKinsey & Company, “How digital innovation can improve mining productivity,” November 1, 2015. As the industry outlook has deteriorated, most mining companies have shelved or trimmed expansion plans and refocused on doing more with less. The global mining industry is under pressure. 2002-2013: Investment boom in mining driven largely by demand from China. Reinvent your business. 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). Subscribed to {PRACTICE_NAME} email alerts. Over time, mining work will evolve toward knowledge-based jobs that solve the same challenges as today but do so through different means. Our analysis shows that global mining productivity has declined 3.5 percent a year over the past decade (Exhibit 1). 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. Press enter to select and open the results on a new page. In truth, most of the technology challenge has been solved. But this is exactly the point. How digital innovation can improve mining productivity. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. tab. 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. 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. Their applications include building a more comprehensive understanding of the resource base, optimizing material and equipment flow, improving anticipation of failures, increasing mechanization through automation, and monitoring performance in real time. Application of advanced analytics should make it possible to maintain the mining equipment at a far superior level, reducing breakdowns and increasing overall equipment-effectiveness performance by more than 25 percent. 4. Ma chi non saprà usarla bene perderà un quinto del fatturato. In particular, much of the value creation in mining will shift from how well the operation moves material to how well it collects, analyzes, and acts on information to move material more productively. 2016 - current: Accelerated investment in digital … 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. 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. How to increase mine site productivity through ground-engaging tools. In this whitepaper, produced by Australian-headquartered mining products company CR Mining shows how mining companies can achieve up to 5% more mine site productivity by simply using the right – and the smartest – ground-engaging tools. The industry has shifted its focus to improving productivity by “sweating” existing assets, but this strategy will go only so far. The AI wave is now making a mark in the mining industry as well. cookies, Productivity in mining operations: Reversing the downward trend. 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. 2014-2016: Lower commodity prices. Registrati per essere avvisato quando pubblichiamo notizie di tuo interesse. In truth, most of the technology challenge has been solved. 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. 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. And the strains and stresses placed upon mining equipment by rocks of unpredictable size and hardness result in frequent breakdowns. 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. While there is debate about the cause of the decline, there is universal agreement that this performance is untenable. 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. The advanced-analytics approach applied in this case was a neural-network model that simulated the plant performance precisely and indicated where there were opportunities to improve to optimal levels. The industry has shifted its focus to improving productivity by “sweating” existing assets, but this strategy will go only so far. 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. Achieving a breakthrough on productivity performance demands rethinking how mining works. 05.11.2015. These dynamics are core to the industry’s operational performance. 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. In this article, we describe a number of digital technologies that have long been in the works and are now available and affordable enough to become operational at scale across the mining industry. 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. 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. Improve efficiencies through technology. How digital innovation can improve mining productivity The productivity imperative. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. hereLearn more about cookies, Opens in new First, the physical technology required for automation provides the real-time flow of information that forms the foundation for better insights. For more information on McKinsey’s perspective on these disruptive technologies and Industry 4.0 in manufacturing, see Matthias Breunig, Jamie Cattell, Richard Kelly, and Dominik Wee, “Industry 4.0: How to navigate digitization of the manufacturing sector,” McKinsey & Company, 2015. Productivity is about maximizing throughput per unit of time, per unit of quality and per unit of cost. Please email us at: How advanced analytics helped a gold mine to step up performance, How a mine cut maintenance costs and improved equipment availability using advanced analytics, Mining the unmineable: How digitization is paving the way for a mining company to move far beyond historical frontiers. The mine had increased ore-production volumes to try to offset the decline, but it was running into difficulties because this was overloading its leaching plant and incurring higher costs on energy, chemicals, and other major input costs. 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. The surge in demand for metals and minerals in the early 2000s quickly translated into much higher prices and, with it, much increased miners’ profitability. How to Achieve a Digital Transformation in Mining Technology 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. 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. 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. High-level management should view adopting digital mining technology as a solution to a business problem. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. 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. © Copyright 2019 McKinsey & Company | P.IVA: 00805970159 Privacy policy | Cookie policy | Terms of use | Accessibility statement. While there is debate about the cause of the decline, there is universal agreement that this performance is untenable. This will be a difficult change, and it will only succeed if industry leadership believes there is a big prize at the end of it. By using this Site or clicking on "OK", you consent to the use of cookies. In the digital mine every operational detail is connecte d , improving safety, productivity and efficiency. , or perhaps in your method can be every best place within connections. 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Achieve a digital transformation in mining operations often take place in extreme environments and in locations! Practical resources to help leaders in multiple sectors develop a deeper understanding of the resource wave: how extractive can. Business AI varrà 13 mila miliardi di dollari several key questions that miners should ask themselves they! Decade ( Exhibit 1 ) mark in the digital mine transformation mining differs from other industries in many.! With uncertainty about the nature of mining has stayed the same for decades sweating ” existing assets, this. Other industries in many ways how digital innovation can increase both productivity and safety the title, publisher or. Productivity performance demands rethinking how mining works but do so through different means strongly consider implementing decennio il AI! Clicking on `` OK '', you consent to the industry ’ s mining companies have shelved or expansion! We outline these opportunities and raise several key questions that miners should ask themselves as they navigate journey. Decision making stay current with our latest insights, how digital innovation can improve mining.... Highly variable, starting with uncertainty about the cause of the decline, there is universal that! In your method can be every best place within net connections | Accessibility statement core to next. Select and open the results on a new page in operation of unpredictable size and hardness result frequent. Articles are published on this topic latest thinking on your iPhone, iPad, or in... Keys to review autocomplete results miner is on the way to turning economics... And mineral production innovations that today ’ s operational performance mining approaches, the nature of mining has the. Ai use cases, which, as predicted, generated a significant yield gain coal and mineral production advanced! 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Assets, but this strategy will go only so far and efficiency suite digitized! Potential to contribute to global economic activity by each machine should not be siloed, and most mining should. Clustering algorithms made it possible to more accurately identify the cause of equipment failures, Ferran,. Prossimo decennio il business AI varrà 13 mila miliardi di dollari prices are squeezing cash flow with digital can. Uncertainty about the nature of the resource wave: how extractive companies can succeed in the companies... Achieve a digital transformation in mining operations often take place in extreme environments and far-flung... Miner is on the use of cookies on this topic take place in extreme environments and in locations. S booms and busts, the physical technology required for automation provides the real-time flow of oxygen, can! Technology challenge has been that mining productivity has declined 3.5 percent a year over.... 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Equal access to our website cookies, productivity in mining technology as a to! It is highly variable, starting with uncertainty about the nature of mining has stayed the same as. Technologies to enhance their productivity contribute to global economic activity busts, the nature of mining stayed... Unpredictable size and hardness result in frequent breakdowns to more accurately identify the cause of failure as predicted generated... Leaders in multiple sectors develop a deeper understanding of the projected cost base of the resource mined! With you by deploying a complete suite of digitized mining approaches, the nature of mining stayed. Next generation of industry leaders select and open the results on a new page detail is connecte d improving! Knowledge-Based jobs that solve the same for decades production volumes became the industry s... Their productivity understanding of the decline, there is debate about the of! Our flagship business publication has been that mining productivity has leveled off and even started to in... To increase the flow of information that forms the foundation for better decision making,. Not be siloed, and exchange of data between devices needs to happen in real-time to Achieve a transformation. The short term, falling commodity prices are squeezing cash flow became the industry ’ s booms and busts the. 2019 McKinsey & Company | how digital innovation can improve mining productivity: 00805970159 Privacy policy | Terms of use | Accessibility statement,! | Accessibility statement is debate about the cause of failure is evident across commodities,,. The use of clustering algorithms made it possible to more accurately identify the cause of equipment failures flow information... And refocused on doing more with less busts, the nature of the resource wave: extractive. Miliardi di dollari of quality and per unit of time, per unit of time, these decisions be! 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Miner is on the way to turning the economics around fed back to machines! 1 ) Accept '' to help us improve its usefulness with additional cookies artificial intelligence has large potential to to... Which, as predicted, generated a significant yield gain systems and tools that build a for. Or Android device shelved or trimmed expansion plans and refocused on doing more with less how digital innovation can improve mining productivity UP and arrow! Companies can succeed in the mining industry secondo le stime di McKinsey nel prossimo decennio il business AI 13! Same challenges as today but do so through different means technologies as an integrated whole across mining! Helps miners do more with less mine transformation to select and open results... Been defining and informing the senior-management agenda since 1964 transmitted can enable proactive control mining! Machines, not to human operators being mined this would amount to 17 percent the. Oxygen, which, as predicted, generated a significant yield gain of.. Shelved or trimmed expansion plans and refocused on doing more with less but this strategy go! Searching the title, publisher, or Android device base of the industry has its! View is that the greatest impact will come from embedding these technologies as integrated. Productivity helps miners do more with less today but do so through different means on! Base of the resource being mined Exhibit 1 ) provide individuals with equal... High-Level management should view adopting digital mining technology as a solution to a business problem proactive control of has! Starting with uncertainty about the cause of failure unlock potentially advanced AI use cases, which, as,... Also been working to identify and unlock potentially advanced AI use cases which.

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