FLSmidth’s Chief Digital Officer, Mikko Tepponen, gives his hot take on why is mining still lagging behind other industries, why this is an issue and, ultimately, how mining can close the gap as quickly and effectively as possible.
The multi-layered impact of the Covid-19 pandemic on the mining industry highlighted the range of benefits digital can bring, from remote operations to predictive maintenance and beyond. But despite this period where digital really proved its value and quickening adoption rates, mining is still trailing other industries by, in BCG’s words, “a huge deficit, especially considering the enormous benefits digital technology can bring to the sector”.
In the Digital Acceleration Index, BCG highlighted several reasons for the discrepancy, ranging from a dearth of customised solutions, a lack of agile methods to deploy digital, skills, the remote location of mines and therefore poor network bandwidth and a general cultural resistance.
A lack of collaboration and standardisation needs to be overcome
These are all valid points to differing degrees. But for me, collaboration – or the lack thereof – is a fundamental weakness. The key to unlocking digital value in mining comes from cross-party collaboration. How can the insights and knowledge of a solutions provider and OEM, like FLSmidth, be combined with the experience of the operators? What does this look like across multiple processes, value chains, commodities and mine characteristics? To answer these questions and deliver the optimal benefits to mining, we need to create digital ecosystems and standardisation in the industry. Unfortunately, we are not yet there.
Digital is the prerequisite for two crucial success criteria – productivity and sustainability.
The BCG report can make for gloomy reading but there are positive signs. Increasingly we are witnessing an increase in co-creation and collaboration and a significant amount of point solutions are materialising. However, the big push is yet to come. Naturally, other similar industries are moving fast in digital and we need to figure how to match that pace.
Digital will deliver productivity and sustainability
Digital is the prerequisite for two crucial success criteria – productivity and sustainability. From the first step, where gaining full transparency into productivity and sustainability performance should be the focus, to an end goal of complete system-wide optimisation, none of this is possible without a clear digital roadmap. For us at FLSmidth, for instance, our MissionZero sustainability ambition is simply not achievable without digital solutions and optimisation.
So what next? How does mining close the gap? Well, one of the founding principles that I have within digital transformation is co-creation and collaboration. As policy, we do not start a single digital development without customers involvement. Our focus is on exploring areas where we can openly provide more value for our customers. And we continue to have several C-level discussions on digitalisation within mining.
Why is customer collaboration so critical?
By working directly with customers, it ensures we develop solutions that are timely and relevant and are desired by the market – solutions that deliver value to customers right from the start. According to BCG’s DAI survey, only 25% of metals and mining companies use customised digital solutions – the rest deploy far less effective off-the-shelf products. This is a central reason for our more personalised approach.
Each mine location has different characteristics, each commodity has different requirements and each business has different needs based off their priorities and digital maturity. Only through close collaboration can the most effective digital solution be developed and deployed. Often an “off-the-shelf” digital solution can be effective as long as it can be customised. So, if a solution is 80% ready to go and then 20% customised, it allows for faster roll out and ensures it meets specific requirements.
Miners need to have a post-deployment programme to ensure digital solution remain at maximum relevance. But what if there is a lack of knowledge or skills?
This approach also assists both us and the customer to solve issues around data ownership, cybersecurity, unlocking value, and so forth. Partnership helps us to assess data to uncover how much potential there is for improvement with the agile digital offerings we have currently and how they can be most fruitfully used by the customer.
Lastly, I’d like to address what might be termed “the maintenance of digital”. The BCG survey report highlights how miners – post-deployment – “must sustain these digital solutions over time, even as operating regimes change, raw material quality varies”. To me this issue is related to both culture and provider. It is highly unusual that a new digital solution can be implemented and never upgraded.
Every day, we run updates on our phones, PCs and operation systems as part of maintaining and improving their efficiency and effectiveness. The same goes on mine sites. Miners need to have a post-deployment programme to ensure digital solution remain at maximum relevance. But what if there is a lack of knowledge or skills? This is something we have recognised at FLSmidth and is part of our recent ramping up of our Service area. As a partner to customers, we will be familiar with their operations and with their digital systems, allowing us to provide service and support over the lifetime of the mine.
We can also assist with long-term strategy, planning and roll-out with a holistic approach that covers and integrates the entire process flowsheet. The focus in mining has been, up to recently, on individual pieces of equipment and “process islands”. This is the low hanging fruit that gets picked off in the first phase. But the big benefits are in the combination of data from across the entire mining flowsheet – this will unlock massive potential in optimisation, process efficiency and resource use (such as water and energy), which will help cut costs and reduce the environmental footprint of operations.
Talking the next steps
For this to happen, there needs to be more collaboration and co-operation between vendors – FLSmidth and our peers – on issues such as data collection and sharing and the setting up of standards around this.
We need to accept that to do this meaningfully some of the traditional business models between customers and OEMs will need to change or be completely rethought. If you look at any industry that has successfully embraced digitalisation, the success was built on industry standards that different players within the industry agreed upon jointly.
Mining needs to take this step if we are to pull level with digital maturity of our industry peers and close the 40% gap.