360° Digitalisation to unlock R213-billion in SA by 2026

In 2017, a report by Accenture and the Word Economic Forum (WEF) revealed that by deploying seven digital initiatives, the South African mining sector could unlock R213-billion in value by 20261.

Rumisha Motilal, commercial director Mining, MEA at Gilbarco Veeder-Root, cited these findings in a seminar she presented at the Electra Mining Africa Expo 2022. In an interview with African Mining, she notes that digitalisation adoption has been low, slow and fragmented in the South African mining sector to date. Referring to the research by Accenture and the WEF1, she explains that due to the current skill shortage in advanced analytics2 and the fragmented beginnings of digitalisation in the industry, mining companies are only experiencing the ‘tip of the iceberg’ of the potential value that a comprehensive, integrated, strategic digitalisation and advanced analytics drive can offer the industry and economy. Mining leaders who partner and collaborate with specialists in data analytics, like Gilbarco Veeder Root, who can assist operations in fast-tracking the unlocking of the potential value lying in digitalisation, will find themselves ahead of the game.

Yemi Fatunla, managing director at the company adds, “The mining industry is one of the oldest, most successful global industries. The focus has therefore been on incremental improvements to strategies that that have worked in the past. What is needed now to unlock further value and remain competitive is a transformative mindset with a strategically driven transformation and change management agenda in the digitalisation space.” He notes that there are two routes to the end goal – the unleashing of the full R213-billion value, and more – the slow, independent digitalisation journey with ‘teething problems,’ or a fast-tracked journey of partnership and collaboration with a specialist in the field, with shared value in a proof of concept (PoC).

Digitalisation trends in SA mining

Motilal explains that according to the research1, most miners have focused on certain key business value and risk drivers when it comes to digitalisation initiatives, such as safety, reducing carbon emissions and driving productivity and efficiencies – for obvious reasons. Three main areas have therefore been prioritised in recent years: autonomous vehicles and equipment, the immersive experience (sensors and the connected worker) and basic cyber security protocols. “South African miners are most interested in scaling digital POCs in production and operations, digital and physical security and supply chain logistics functions.” This has, however, just scratched the surface when it comes to unearthing the real value in digitalisation (see figure 2).

Figure 2: Percentages represent the proportion of PoCs scaled out of the total number of PoCs piloted in each business function. Image credit: Accenture South African Mining Survey, 2019

In addition to this, a recent McKinsey & Company report3 notes that mining companies are only using a fraction of the data they glean from current digitalisation initiatives. Shortcomings are noted as follows: data is accessible, but not fully captured; data is not streamed and stored due to lack of infrastructure; data is available but not easily accessible to management making critical decisions; existing data is not analysed, data is not communicated and therefore not visualised holistically, and ultimately data is not used in decision making and execution (see figure 4).

Figure 4: Mining companies only use a fraction of their data. Image credit: McKinsey & Company

Motilal emphasises that leveraging these lost digital capabilities and opportunities can enable miners to make faster, more informed decisions to put the right performance management processes in place to yield the best results. However, the decision makers are not always involved in the buy-in of digital tools. Successful digitalisation adoption can only be achieved with a leadership mind-set change and cultural change. “Miners risk losing out on over a third of value-creation opportunities because they are not prioritising advanced analytics and integrated platforms in their digital initiatives.” See Figure 3 where low deployment in digital initiatives is highlighted.

Figure 3: How South African mining companies prioritise technologies across digital initiatives. Image credit: Accenture South Africa Mining Survey, 2019 and Accenture Value Lab analysis

How do we unlock the full value?

“The potential value referred to by the WEF (World Economic Forum) can be accessed collectively by the mining sector if miners manage data correctly and embrace the right data analytics and digitalisation tools and if miners deploy seven digital initiatives – end to end, which will ultimately lead to optimisation of material and equipment flow, better predictive maintenance and anticipation of failures, and increased mechanisation through automation,” says Motilal. This will in turn automatically result in reduced downtime, fewer health and safety incidents, increased output and reduced personnel cost – delivering greater value to the economy in an approximate 2% increase in GDP to R4 446-billion.

She adds, “R153-billion could accrue to businesses in the form of gains impacting the top and bottom line by 2026. The remaining R60-billion of the potential R213-billion will benefit society through gains such as jobs created, reduced carbon emissions and waste, increased transparency and improved security.”

The industry is already focusing on four of these initiatives in their frontline operations: autonomous operations; smart sensors; the connected worker and cyber security and has thereby already started unlocking the first R99-billion in value. However, next steps must be to focus on integration and security, in addition to intelligence with integrated platforms and advanced analytics to unlock the additional R54-billion, says Motilal (see Figure 1).

Figure 1: How South African mining companies prioritise technologies across digital initiatives. Image credit: Accenture’s research, developed in collaboration with WEF in 2017, Extracting value and building resilience with data-led mining in South Africa

The challenges

In Motilal’s opinion, there are five main challenges impeding the end goal in the area of available talent, “There is a very small local workforce pool at the moment with skill in data analytics and visualisation; digital production management is currently limited in our mining space; there is very little automation experience in the workforce to draw from – although it is slowly growing; there’s no quality analysis (or benchmarking) to better validate data so we can make valuable decisions; and AI and machine learning training is still a very new trend, and resource is therefore limited .”

The answer lies in scaling digitalisation

Motilal explains that it is important to understand the skills gap and to align the skill set of the workforce with preferred technologies by upskilling existing inhouse talent, sourcing of full-time employees from tech partners and recruiting of new talent developed in the local and more established global market.4

She adds that limited understanding of deploying data platforms and then integrating them requires collaboration with a range of expert partners in order to reach the full value of foundational technologies on offer, such as Gilbarco Vreeder-Root, who are willing to partner in a profit share model when it comes to proof of concept.

Our country’s economy is in dire need of the impetus of the R213-billion that this trend in industry could unlock. Thankfully, “There is a slow awakening to the fact that enriched data, and the intelligent utilisation of that data is the solution,” notes Fatunla, concluding, “the bigger the ecosystem of enriched data, the better the AI, and the greater the value that can be unleashed!”

References:

1. https://www.accenture.com/_acnmedia/PDF-126/Accenture-Extracting-Value-And-Building-Resilience-With-Data-Led-Mining-South-Africa-FinalV.pdf
2. Advanced analytics leverages algorithms and artificial intelligence to spot opportunities that humans miss. It processes data, identifies trends and patterns from structured or unstructured data, as well as uncovers relationships between events. Mining companies can leverage such insights to identify operational bottlenecks or waste patterns and make plant operations more efficient. These insights are also helpful in predicting potential disruptions, learning useful lessons from the past and informing future actions. Mining companies are also increasingly deploying advanced analytics to quickly and effectively identify ore value during exploration. Advanced analytics could therefore help South African mining companies unlock R28-billion through improved productivity and more streamlined operations.
   Advanced analytics and machine learning is leveraged to forecast, track, learn, predict, report and manage company resources and business processes. (Accenture report above).
3. https://www.mckinsey.com/industries/metals-and-mining/our-insights/how-digital-innovation-can-improve-mining-productivity
4. Accenture South Africa Mining survey, 2019.