“Digital transformation” and “mining” may not automatically come to mind as bedfellows. But recent developments in Zambia provide lessons (pertinent also for Tanzania) as to how relevant digital transformation can be. In Zambia’s case, the company KoBold Metals (backed by a coalition of billionaires including Bill Gates and Jeff Bezos) applied data and algorithms to geological patterns, and so discovered the world's largest copper deposit.
"Digital transformation" often conjures images of complexity (algorithms) and negativity (job displacement), but the reality can be very positive, including for the mining industry. It's not about ripping everything out and starting anew; rather, digital transformation is more focused in articulating the technological ambition, embedding it in the day-to-day processes while aligning strategically on how the improvement of these processes can help a company reach its goals, vision and mission. Previously seen as a disruption, digital transformation is now viewed as a survival kit for operational excellence. Mining companies that embrace this change can use it to optimize production and maximize return on investment.
How? Well, the first step is a “digital maturity assessment”. This evaluates a mine's internal and external factors, such as production-to-supply chain connectivity, market influences, and how existing data is used for performance improvement. This assessment reveals gaps between current operations and market-leading technologies. With this knowledge, mining companies can embark on a digital transformation journey tailored to their specific needs.
While most of us associate a strategy with a plan, they may have similarities, but they are certainly different. Where a strategy envisions where you want to be, a plan involves the details of how you’ll get there. A successful digital transformation strategy should be integrated with the company's overall vision and mission. It's crucial to involve people at all levels in this journey, fostering a more linear and collaborative approach. By focusing on people, process, and technology in sync, mining companies can achieve connected business processes, assets, and optimized value chains as well as an agile and resilient organization.
Digital transformation also aids in regulatory compliance. Data analytics can help companies transparently manage ESG reporting and sustainability initiatives. Additionally, machine learning can lead to self-operating equipment and predictive maintenance, improving safety and asset management.
While the above examples showcase the power of digital transformation, there's a universe of innovations waiting to be explored. Some potential areas include automated mine planning with advanced software solutions, warehouse control and stock management systems, predictive safety analytics to prevent injuries, real-time monitoring of restricted areas, self-optimizing supply chains, Radio Frequency Identification (RFID) tracking of equipment.
The key is a "fit-for-purpose" approach. Mining companies need to assess their resources and choose technologies that seamlessly integrate with their existing systems. By building a strong foundation, a digital transformation strategy and roadmap are crucial, but they won't work miracles on inefficient processes. The digital maturity assessment becomes a vital first step to identify and address any existing operational bottlenecks.
In addition, we ought to learn from adversity and embrace the future. The mining industry demonstrated remarkable resilience during the COVID-19 pandemic, showcasing its adaptability. However, while much of the focus on digital disruption has been with industries like FinTech and InsurTech and their rapid adoption of digital solutions, mining companies can't afford to be left behind. The risks of remaining a "rookie" in the smart mining space are significant. Mining companies may face the potential for reduced operational efficiency, increased safety hazards, missed opportunities for cost savings and productivity gains. To stay competitive and capitalize on the benefits of smart mining technologies, embracing digital transformation is essential.
Common hurdles during a digital transformation journey include resistance to change for both internal and external stakeholders, lack of digital skills, and the initial investment required. These challenges can be overcome through employee training programs, collaboration with technology providers, and a phased implementation approach aligned with strategic goals.
The Future of Mining is Here. The mining industry is rapidly evolving, with trends like big data analytics for predictive maintenance and the adoption of renewable energy gaining momentum. By embracing digital transformation, mining companies can unlock a future of greater efficiency, sustainability, and profitability. These trends are shaping the future of mining and enabling smarter, more sustainable operations.
Finally, reflecting again on the Zambia experience, for Tanzania we may well reconsider the potential opportunity created by technology to accurately and efficiently identify viable resources, and yes maybe a potential mega mine such as identified in Zambia!
By Rebecca Nnungu, Senior Associate, Strategy and Operations - PwC Tanzania
