The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. By using this Site or clicking on "OK", you consent to the use of cookies. our use of cookies, and The AI wave is now making a mark in the mining industry as well. 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. This trend is evident across commodities, geographies, and most mining companies. 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. Despite the industry’s booms and busts, the nature of mining has stayed the same for decades. We see three reasons for this. Article How digital innovation can improve mining productivity Article Productivity in mining operations: Reversing the downward trend Article Riding the resource wave: How extractive companies can succeed in the new resource era 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. 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. 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. Our analysis shows that global mining productivity has declined 3.5 percent a year over the past decade (Exhibit 1). McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. How digital innovation can improve mining productivity The productivity imperative. Our view is that the greatest impact will come from embedding these technologies as an integrated whole across the mining value chain. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. 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. Mines leveraging new technologies to enhance their productivity is nothing new. Second, in time, these decisions will be fed back to autonomous machines, not to human operators. 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. Despite the industry’s booms and busts, the nature of mining has stayed the same for decades. We outline these opportunities and raise several key questions that miners should ask themselves as they navigate the journey. Please click "Accept" to help us improve its usefulness with additional cookies. 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. Learn more about cookies, Opens in new 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 uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. 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. 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). Mining companies have also been working to identify and unlock potentially advanced AI use cases, which can ‘Uberize’ 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. Never miss an insight. We see a number of factors that will drive success: Mining has always been marked by uncertainty and variability, from the resources in the ground to the stress on equipment to the weather. 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. As the industry outlook has deteriorated, most mining companies have shelved or trimmed expansion plans and refocused on doing more with less. First, the physical technology required for automation provides the real-time flow of information that forms the foundation for better insights. Boosting production volumes became the industry’s top priority. 2002-2013: Investment boom in mining driven largely by demand from China. 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. 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 … 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. Press enter to select and open the results on a new page. Riding the resource wave: How extractive companies can succeed in the new resource era, McKinsey_Website_Accessibility@mckinsey.com. Now, Ivory added, it is time that mining companies took the next step to unlock new productivity gains to further improve cost efficiency in the next era of the industry. People create and sustain change. 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 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. There are six crucial innovations that today’s mining companies should strongly consider implementing. 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. In the short term, falling commodity prices are squeezing cash flow. 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. 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. Artificial intelligence has large potential to contribute to global economic activity. Historically, the mine had been achieving an average maintenance performance, running a maintenance schedule based on the OEM’s recommendations and on simple metrics such as MTBF, or mean time between failure. Mining operations often take place in extreme environments and in far-flung locations. The path to a step change in mining productivity will come through reducing and, where possible, eliminating the variability that has made mining unique. 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. 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. These dynamics are core to the industry’s operational performance. A fully integrated and automated mining supply chain may not be universally realized in the near future, but it is more than mining science fiction—it is the logical end point in a series of technology deployments that mining companies have already initiated. Digital innovation could provide a breakthrough. How digital innovation can improve mining productivity. Secondo le stime di McKinsey nel prossimo decennio il business Ai varrà 13 mila miliardi di dollari. Changing the game with digital innovation. Deployment of robots down the mine that can assay the mine face using remote-controlled laser-scanned point clouds to inform the control module on the mine surface can cause a step change in productivity. Flip the odds. How technology can boost productivity in small-scale mining. It is highly variable, starting with uncertainty about the nature of the resource being mined. 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. Reinvent your business. Subscribed to {PRACTICE_NAME} email alerts. In fact, an underinvestment in digital technology designed to improve productivity can lead to increased work hours, corresponding billing increases, increased operational expenses, schedule slippage and lost revenue. Digital upends old models. We outline these opportunities and raise several key questions that miners should ask themselves as they navigate the journey. The fleet of self-driving trucks at Jimblebar has reduced potential safety incidents involving vehicles, increased truck utilisation and reduced haulage costs by about 20%. We see a number of factors that will drive success: Mining has always been marked by uncertainty and variability, from the resources in the ground to the stress on equipment to the weather. 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. Of course, mining differs from other industries in many ways. Hugh Durrant-Whyte is professor at the University of Sydney. 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. 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. Over time, mining work will evolve toward knowledge-based jobs that solve the same challenges as today but do so through different means. 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. The data collected by each machine should not be siloed, and exchange of data between devices needs to happen in real-time. The first step brought together all the mine’s extensive but underused production and process data—not just from its operating and resource-planning systems but also from the laptops of operators and management—and deployed mathematical-modeling approaches to reconcile inconsistencies and data gaps. 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. 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. In the house, workplace, or perhaps in your method can be every best place within net connections. hereLearn more about cookies, Opens in new By searching the title, publisher, or authors of guide you in fact want, you can discover them rapidly. Capturing the value from digital innovations represents a fundamental shift in vision, strategy, operating model, and capabilities in the mining industry. Our analysis shows that global mining productivity has declined 3.5 percent a year over the... An inflection point for the mining industry. 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. 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. 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. We strive to provide individuals with disabilities equal access to our website. 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… The mine made some small changes to increase the flow of oxygen, which, as predicted, generated a significant yield gain. The industry has shifted its focus to improving productivity by “sweating” existing assets, but this strategy will go only so far. In the digital mine every operational detail is connecte d , improving safety, productivity and efficiency. Focus on innovation. 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. Achieving a breakthrough on productivity performance demands rethinking how mining works. We use cookies essential for this site to function well. The presenters and topics include: Ma chi non saprà usarla bene perderà un quinto del fatturato. One of the most accessible is to draw insights from the data that mining companies routinely gather and then use them to forecast when a piece of equipment may fail. 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. Over time, mining work will evolve toward knowledge-based jobs that solve the same challenges as today but do so through different means. Learn about Second, the use of clustering algorithms made it possible to more accurately identify the cause of equipment failures. deep below existing workings, which are already more than 800 meters below the surface. 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. While there is debate about the cause of the decline, there is universal agreement that this performance is untenable. This makes capturing the opportunity a management challenge for the next generation of industry leaders. Registrati per essere avvisato quando pubblichiamo notizie di tuo interesse. 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. And the strains and stresses placed upon mining equipment by rocks of unpredictable size and hardness result in frequent breakdowns. 05.11.2015. 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. The industry has shifted its focus to improving productivity by “sweating” existing assets, but this strategy will go only so far. High-level management should view adopting digital mining technology as a solution to a business problem. We'll email you when new articles are published on this topic. 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