Mining rebooted

This article discusses a holistic approach within a broader perspective to explore the concept of future sustainable mining. It will also address matters that mining leaders should be focusing on more. First, six core pillars of mining DNA are introduced. These are further divided into 36 principles, which lead to a futuristic mining operating model.  

Different version of digitalized mines | Connected mine, digital mine, intelligent and smart mine

Last decade, with the enhancement of digital technology and big-data hype, there have been many discussions around how to digitalize a mine. A lot of management consulting firms define the same concepts, using different terms such as connected mine, digital mine, intelligent mine and smart mine. However, the core content of these four types of technology-enabled mines are conceptually same. They are focused on technological development only without consideration of other important aspects of mining. Of course, technology is an enabler for the improvement of a mining business, but it does not cover everything. 

With the advancement of technology, more mining companies have started to transform their business by adopting digital capabilities through the leveraging power of data. However, still there is a gap between our current standing and where we want to be in the future. To address that concern, a strategy involving visionary thinking to ensure greater development of the mining sector is introduced. The concept of futuristic Mining DNA (MineDNA) i shows how mining companies could operate in future. MineDNA consists of six parts:

• Visionary leadership
• Business models
• Emerging technologies
• Optimized miners
• Green mining
• Purposeful conversation 

The MineDNA concept would help to

• avoid silo-driven mentality,
• move from conservatism to more openness,
• address the communication gap between top layer of C-Executives and the bottom layer of operators,
• break the bottlenecks that are created by humans, systems, and processes,
• improve economic, social, and environmental sustainability
• provide higher value to stakeholders
• develop a footprint toward successful mining transformation
• successfully orchestrate leadership, business, technology, workers, environment and conversations 

The Mine DNA would help to improve productivity and efficiency for a better sustainable mining business in the long run. Of course, some of these concepts are already present in the sector. However, there are mining leaders who still question them, and do not embrace enough of them in order to take strategic action. The fundamentals and strategic pillars needed to progress and provide inspirational ideas of how to transform a mining business into a best-in-class futuristic mining company are explained. The futuristic mining operating model can be broken down into 36 principles.

Visionary leadership | We need to have a strong mining leadership which embraces the value of a great culture, talented people, and a flat hierarchical organization

One of the main reasons that most of the current performance KPI-based frameworks do not work is because there is a top-down leadership approach. The leadership model should prioritize a bottom up approach as well. This is because miners have a good understanding how their daily operation work and what actual KPIs are going to be. Therefore, it is important to find a hybrid leadership model where top-down and bottom-up approaches collide optimally in a mining organization.

    Mining leaders must prepare the mining company to move in the right direction in order to be successful in the future. To achieve that, they need to build relationships with peers in order to understand what they do better, tailor their solutions to address current pain points and issues, and be open to suggestions as to how to improve the business. Mining leadership should encouraged to walk the extra mile if necessary, keeping in mind that metal prices fluctuate and that mining is a cyclical business, in order to predict what might happen to the industry in the future. They must embrace the concept that everyone must lead and be led in the organization. Promoting a flat hierarchy will make the execution process easier and assist in optimizing layers of traditional communication between departments and at an individual level.

The mining leadership should aggressively seek out better opportunities to expand the business by searching for new exploration areas and expanding the mines constantly. At the same time, it should find the right investors to overcome limited budget requirements in order to conduct such exploration activities in different regions on the globe. It should also identify the risks and threats that could potentially give the company a bad reputation for example, conflicts arising with indigenous people in the mining areas. It has to force the mining organization to thrive in digital technologies and to treat digital as the top priority of the organization. This can be done by pursuing a positive mindset of breaking the silos and driving the concept of "one mine & one team" as well as a clear attitude towards great stewardship. The leadership is encouraged to make a commitment to the continuous development of the mining sector by maximizing value to shareholders, leveraging high technologies, motivating the mining workforce, and ensuring the health and safety of people. Promoting the concepts of green mining, and facilitating purposeful  conversations are other key considerations. 

Business models | Business models are flexible enough to understand market changes, and other behavioural and organizational aspects of mining 

A mining company is not required to re-invent the wheel; it only needs to bring outside-in and inside-out perspectives to the business. Mining leaders should continually leverage the knowledge of good business models that are already available in the sector and tailor them to their current situation, and understand how leading mining companies are doing things differently. They should consider outsourcing opportunities for some of the complex problems; research institutes and universities have the expertise to tackle those situations. However, it is important to establish deadlines for the solving of problems. Utilizing knowledge that is already available in the market from mining startups is crucial, as there are many startups with creative solutions which are visible.

To deliver balanced corporate social responsibility (CSR), mining leaders should build the corporate strategy around circular economies, and seek a lucrative partnership with startups, research institutes, and contractors.   

Leaders need to be creative and study different sector business models,  thinking how they could leverage them in their own  business. For example, oil and gas manufacturing sectors are similar to the mining industry. Implementation of other business models like Tesla or Airbnb should be considered.  At the end of the day, mining leaders should try to maximize value to their shareholders by continually looking for ways to improve the mining business.  

Emerging technologies | Mining companies should find ways of leveraging emerging technologies with an existing one 

Technology changes at such a fast rate, that it is hard to catchup if you do not keep up with it. As the saying goes, in the new world, it is not the big fish, which eats the small fish; it is the fast fish, which eats the slow fish. Nowadays internet of things (IoT) is very popular. Some companies use Industrial internet of things (IIoT). My prediction is that this never ends.

            The problem is not in evolving technologies, it is how adapt them and leverage them. Therefore, in order to survive in that digital environment, mining companies need to focus on digitizing their systems and processes to make sure that everything is running smoothly and unnecessary human interaction with systems is minimized.

Furthermore, they need to optimize and tailor their current platforms and architectures so that they can be adapted to trending technologies. Another thing is to install high-tech platforms throughout the value chain in order to unleash the power of digital. This will bring cutting-edge technologies to the mine sites, covering exploration to operation.  Finally, the systems should be compatible with each other. This can be done by integrating all the platforms and update legacy IT systems regularly. Some of these concepts are discussed later in this book. 

Optimized miners | Miners are the core part of the business, so they need to be retained and upskilled 

Employees are great assets to any organization. The import thing to come out in a mine is the miners. Given that they will be working in an ever-increasing digital environment in future, mining companies should upskill employees by guiding and coaching them to become motived in what they do in their daily operation. Mining leaders must treat health and safety as the main priority of a mining business so that there is zero-harm impact in the organization. They have to provide leadership opportunities to improve the miners decision-making process during the shifts. If possible, this should be enacted without going through all the rules and protocols which may be in place at the moment, thus promoting a flat hierarchy throughout a mining organization. Such an approach can lead to a significant increase in productivity. 

The mining leadership should seek to produce diversified miners so they feel part of a team, where each helps others to reach personal goals and ambitions.  Another goal should be to encourage miners to focus on their discipline and to develop a good attitude towards daily working atmosphere.  Leaders should also promote and encourage women in the mining workforce and provide them with enough facilities to focus on their work and take leadership roles in the workplace. 

Green mining | Mining leaders must drive their company towards eco-friendly mining 

A futuristic mining company must leverage the UN defined sustainable development goals (SDGs) to map them into their CSR report. This means that, in future, mining should focus on being environmentally friendly and be driven by renewable energy power sources. Companies which do not pay attention to the environment will lose the opportunity to become successful mining players. Natural gas enabled power plants should be used as the future power source. Mining companies should minimize the emission of CO2 and other toxic gasses into the atmosphere, and strive for zero carbon emission in the future. Leaders should actively build mining communities which not only provide jobs for indigenous people on the mining sites, but also develop their infrastructure such as schooling, hospitals, and, if possible, tourism. A futuristic mining company should work with governments to define polices and regulations towards green mining and improve sustainable practices to ensure availability of mineral resources for future use. 

Purposeful conversation | Effective communication should increase productivity in the mining business

Collaboration between departments and/or at an individual level is key to improving productivity. Imagine a mining company where there are several teams such as finance, open-pit, underground, and refinery. There are many stakeholders engaging in each step of the decision-making process. Finance teams send their budget requirements to open-pit mine planners. Based on that, they schedule mining tasks. Then it is forwarded to underground mine planners to conduct their mine planning and scheduling tasks. Finally, it is passed to the refinery team to do refinery scheduling. It takes a great amount of time to make the final decision. In some mining companies, it could take up to more than 6 months for the planning process to be completed. This is a huge problem when it comes to productivity. Consequently, there is a great opportunity to rewire the organization so that it provides correct instructions, and makes a people-process-system plain and simple to run. With proper alignment, coordination, and execution, this could be done quickly. Some mining companies already have in-house capacities to produce “integrated planning”. This helps to avoid silo-driven mentality in the mining sector as well. Another important aspect is to interact with hired contractors often, so that they are aligned in what they do to improve productivity.

Conclusion | Next steps 

If the MineDNA is not right for a mining organization, then the mining company will miss the opportunity to prepare their mines for the future. It is important to remember that technology changes, employees change, and the leadership changes. What matters for sustainable mining is strategic execution. Strategic execution is the atom in the MineDNA. It will support the mining business in the life time of the mines. Whoever is involved in leadership should have the courage to execute commands often and timely in an agile manner. Eventually we need execution driven visionary leadership to build the mining sector.

About the author:

Kash Sirinanda has a doctorate in mine planning and optimisation from the University of Melbourne, Australia. During his PhD studies and post-doctoral work at the University, Kash developed algorithms for generating designs that maximise the NPV of a mining operation. That work provides the basis for software that assists mine planners to design more profitable mines. Kash was also a visiting scholar at the Colorado School of Mines, USA.

He has worked on various mining projects which include due diligence, operation, analytics, optimisation and digital in different commodities around the globe. He is a keynote speaker and provides mining leaders with strategic direction, and visionary leadership.

Kash′s vision is to engage, partner, and collaborate with leaders and decision makers to transform a business into a best-in-class, advanced digital and sustainable-enabled competency company.

Founder of www.mineconnector.com & www.elitefuturists.com