Internet of Things (IoT) is changing mining supply chains, and not a moment too soon

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Gloomy news about the mining industry is not abating, not even for one minute. The price of iron ore, coal, and copper make the eyes of mine operators and traders alike glaze over. The statistics suggest a prolonged slump ahead.

In this grim environment, large and small operators are responding with predictable countermeasures. Mines are shuttered, capital projects postponed, equipment purchases cancelled, workforces severely trimmed, and cash is squirreled away. Only the bravest of the brave are out and about hunting for distressed assets, willing to go against the prevailing negative sentiment.

Enter technology

In the midst of all this, a profound technological shift is taking place above and under the ground. After all, mining is not stopping. But unlike mining of the past which relied heavily on a human workforce, today mining is at ground zero of a technological revolution. The era of digital mining is slowly forcing companies to migrate from prototypes and pilot projects to the mines. Many still face obstacles in forcing changes upon all components of their operations, but the will to act is definitely there. Industrialization, automation, and system integration carry the promise of significantly reduced cost of operations. No mining company can resist that fact, given falling or flat prices for their wares and escalating costs of production.

The Internet of Things (IoT) concept is exciting to everyone, but few companies are ready for IoT revolution. Most dabble with the obvious and have trouble convincing their financial managers to loosen the purse strings to do more. Where is IoT in the industry? One of the best known examples is in transportation. Giant trucks lost their human drivers and became automatic drones run with joysticks from remote control centers. The airspace above the trucks is busy with drones so familiar from the theaters of war. Aerial unmanned vehicles monitor surface operations, perform measurements, locate ground equipment, track environmental factors, and act as safety supervisors. Some ground machinery, loaded with sensors, computers, intelligent actuators, and communications systems can be let loose inside the mines and operate with minimal need of human intervention. Underground, in the shafts and tunnels, autonomous drill rigs and trains reduce need for a human workforce and perform at high efficiency in the toughest conditions.

How do you spend your wealth of data?

Aerial and ground equipment sensors continue measuring machine operation and environmental variables, collecting data as machines have done for decades. While the volume of data has increased, many companies are still at a loss at how best to use this wealth of information, while others put it to work to forecast maintenance requirements, prevent accidents, and monitor environmental compliance.

The companies who put data to work are those at the forefront of the technological revolution. Today’s hardware can easily support complex optimization software processing data in real time and making autonomous operations decisions. Optimization software uses new algorithms capable of using big data, identifying patterns not only to predict performance of mining operations, but also to prescribe adjustments of factors.

At Quintiq, we have spent years developing optimization technology to make the mining supply chain as efficient as possible. Mining companies that use our solution, see long term cost reductions in processing ores, managing energy consumptions, and extending useful life of machinery by making intelligent maintenance decisions. Those three areas alone represent the key woes of the mining industry.

Clearly, we created value for our customers. But.

Yes, not all is peachy and there is still the proverbial “but”. For all our ability to convert sensor data into optimal decision or plan, we are missing the bridge between all the systems participating in the supply chain. After the crush plants, the wash plants and the piling equipment we still have to transport the ores from the mines to their final destinations or export ports.

Linking of the planning and scheduling decisions between the mines, the processing plants, the railways/barges, the ports, and the vessels is still unnecessarily complex. And that means that the mining companies incur unnecessary costs and lose ability to respond to the market shifts and take advantage of fleeting opportunities to maximize their profits.

Intelligent conversations between machines

After all, the internet of things is supposed to be about equipment being able to hold machine-to-machine conversations and make machine-to-machine decisions. Imagine the train being informed by the port that bad weather will slow the loading rate, therefore delay the vessel. The train then informs the loading equipment in the mine. That equipment assesses the next window during which energy prices are lowest and sends re-scheduling commands down the chain all the way to the vessel anchored off the loading port. Every piece of equipment optimizes its actions to save money while waiting for the chain to synchronize again. The system acts like a plane on autopilot. The human operator watches and adjusts levers if required, but only if the integrated system decides it cannot reach an optimal decision all by itself. That is the essence of the digital mine and digital mining supply chain concept.

Why the industry is ignoring this potential gold mine

I sat down with some mining executives to understand what is holding us back. Yes, there are still some gaps in technology, but those gaps are not impossible to bridge or work around. What I learned is that the biggest obstacle for many is organizational inertia. There is still faith that the current commodity market situation is temporary. Good times are just around the corner and we will soon be able to restore the relentless flow of profits and break champagne over record results.

Can you see some fallacy in this thinking? I surely can. But legacy thinking and deep optimism of mining executives is hard to overcome. Therefore progress towards digital mine and digital mining supply chain of the future will be slow and it will take more time. The only thing we can do in the meantime is to talk about the concepts, automate islands of the operations, and illustrate opportunities through more pilot projects. But not for long. Sooner or later, the most nimble of the companies, not necessarily the largest ones, will move to industrial strength IoT-based solutions and leave the slackers behind.

If you found this topic interesting, leave your comment or suggestion. I look forward to responding to your feedback.

Kris Kosmala

About Kris Kosmala

I enjoy the challenge of employing information technology as an accelerator of business growth. Of all business operations, I find supply chains provide the most fertile ground for creative re-thinking and transformative change. I find that frequently, new technology is not aligned with a company’s business strategy. I help companies address this critical issue, ensuring that the right technology is harnessed – and used correctly – to advance their organizational goals and turn it into true competitive advantage.