The mining industry must be one of the most cyclical industries in the world, with supply and demand perpetually out of balance. And it is no secret that for the past few years the industry has been locked into a major “down cycle,” with commodity prices for virtually all metals and minerals at record low prices.
In the past decade, China has been the world’s largest consumer of metals and minerals and major growth in the Chinese economy fueled a “mining super cycle.” Now the reduction in the growth rate of the Chinese economy has triggered the current “super cycle” of contraction in the mining industry.
Apart from cyclicality, there are two other dominant characteristics of the mining industry, namely capital and safety. Modern mining is no longer a people intensive industry. Today,miners are operating highly technical and complex machines that are worth many millions of dollars. Mining is a very capital intensive and safety-conscious industry. Think of mining along the same lines of aviation and nuclear power generation…they all have a similar focus on safety.
In the up cycle, the primary focus of every mining company is output in order to meet the demand from their customers. So operator productivity, machine availability and performance are the key business metrics. Then in the down cycle, the drive for maximum output is replaced by a drive for maximum productivity in order to lower the costs of production. This means that operator productivity and machine productivity become the key business metrics.
Clearly, the ability of the IT function to acquire operational data and then process it into management information in a timely manner is critical to the success of any modern mining business. Data flows from the machines to the IT side of the business and, ultimately, to the customers.
Modern mining machines are operated via digital control systems that can generate data, and the high capital values of mining machines (shovels, trucks, loaders, longwalls etc.) means that the incremental cost of “IP enablement” is not an issue.
Thus the first IT issue to decide is what data should be captured from the machines.