How digitalisation delivers profitability in mining

How digitalisation delivers profitability in mining

Duncan Van Jaarsveld, head of our mining vertical, draws on his experience supporting mining operators worldwide to identify critical factors determining cost optimisation and profitability.

How digitalisation delivers profitability in mining

Duncan Van Jaarsveld, head of our mining vertical, draws on his experience supporting mining operators worldwide to identify critical factors determining cost optimisation and profitability.

Duncan Van Jaarsveld
Duncan Van JaarsveldHead of Mining Vertical, BT

For two decades now, we’ve worked side-by-side with mining companies as they deliver critical resources to citizens worldwide. Within trusted strategic partnerships, our mining specialists have pushed the boundaries of what’s possible to provide resilient communications in the most inhospitable and remote environments. Together, we’ve enabled safer, more efficient, digitally connected mines, from Arctic ice and desert heat to dense rainforests and vast mountains. As the sector moves towards mining for purpose, our experts continue to innovate to help our mining customers optimise productivity and sustainability.

Right now, the global perception in business is that every sector has it tough. However, it’s highly likely that an objective comparison would show mining operators ‘winning’ the competition for the most challenging environment because every aspect of their operating landscape works against them. This means that achieving every fraction of profitability in mining is a struggle - and often a triumph over adversity. As head of our mining vertical, Duncan Van Jaarsveld has valuable experience working with mining operators to use digitalisation to support crucial profitability. In this article, he shares an overview of what’s possible. 

Is mining the most challenging industry?

Mining operators don’t have the luxury of deciding where to operate; they must go where the ore is, often in remote locations within challenging terrains. The first challenge is locating the ore in situations as varied as the extreme cold of the Arctic, thin air in high altitudes, heavy rainfall and dense vegetation in rainforests, scarce water and extreme heat in desert regions, mountainous areas with unstable ground, hazardous deep excavations with poor ventilation and colossal heat; and territories that are only accessible during certain parts of the year.

Once located, operators must balance and address a further set of complex challenges, including assessing economic feasibility. One reflection of this is the stripping ratio, which shows what waste volumes must be mined to extract a viable quantity of ore. Mining operators will know how vast these waste volumes can be. At the extreme, for example, a Liberian gold mine must extract 15.5 tonnes from the ground to secure one tonne of gold (Investing News).

Then there’s the safety imperative. Working remotely, often hazardous terrains has implications for mining personnel, and operators must factor in high levels of protection, emergency facilities, wellbeing support and compliance with global and regional health and safety regulations. This complexity grows when you consider that each site will be unique, requiring a bespoke assessment and plan. Plus, there can be safety implications for the local area: will the mining operation have adverse health effects on the broader community, and how can these be mitigated?

Health and safety legislation is just the tip of the iceberg. Mining operators must navigate an intricate maze of regulatory compliance, encompassing environmental laws, labour standards and resource extraction regulations. These include strict requirements for pollution control, land reclamation, water usage and biodiversity preservation, as well as adherence to international guidelines like the UN’s Sustainable Development Goals. On top of this, there’ll be country-specific taxation, licensing and community engagement laws to follow, often tailored to local socio-economic and environmental conditions.

Such sustainability pressures are particularly difficult to address. Mining companies are under mounting pressure to align with global sustainability goals by monitoring, managing and reducing their environmental impact. This is a challenging task in itself, as mining operations are resource-intensive and inherently disruptive to ecosystems. However, the paradox is that many mined materials, such as lithium, cobalt and copper, are essential to the technologies driving decarbonisation in other industries, like renewable energy and electric vehicles.

Now add in the complexity of running a global mining operation where each site must be considered individually, with bespoke approaches identified, constructed and managed, and mining faces challenges that any business in any sector would recognise as significant. But this isn’t the complete picture.

How do you protect profitability when you don’t control your selling price?

As in any business, mining operators must address these challenges as cost-effectively as possible to make a profit. However, unlike other sectors, mining companies must do this in a volatile commodities market where they don’t control their selling price, only their cost base.

They face constant strategy shifts to align their operating costs to what their product is currently worth within an operating landscape where other expenses, such as fuel, are rising. The copper market is a prime example. Currently, the International Copper Study Group forecasts a surplus of copper in the near term, pushing down prices; however, long-term trends suggest deficits in supply due to the rapid growth in demand from sectors like electric vehicles and renewable energy infrastructure. Remaining viable when prices are low and continuing to invest in exploration and development for when demand increases depend significantly on keeping operating costs as low as possible.

So, although every business would agree that cost-efficiency and optimisation are central, for mining operators, these elements are critical levers for protecting profitability. Recognising this and having thoroughly considered all routes to controlling costs and optimising operations, mining companies are investing in digitalisation.

The power of digitalisation in protecting profit in mining

A vision of a technology-driven Mining 4.0, supported by digitalisation, sits at the heart of many companies’ strategies and increasingly, companies are moving towards Mining 5.0.

Mining 4.0 sees the integration of advanced digital technologies into the mining industry, transforming legacy operations into highly efficient, data-driven processes. It combines traditional mining practices with interconnected technologies such as automation, the Internet of Things (IoT), AI and machine learning, and advanced data analytics to optimise productivity, enhance safety and reduce environmental impact. By enabling faster decision-making, predictive maintenance, autonomous equipment and smarter resource management, Mining 4.0 improves operational efficiency and supports sustainability goals.

Mining 4.0 is thriving and has a proven track record: Studies into Russian mining from MDPI prove deep digitalisation reduces mineral loss by 12–15%, industrial accidents by 25%, operating costs by 10–15%, and sales profitability by 5% by improving logistics.

With these results, it’s unsurprising that forward-thinking mining operators are pushing ahead to achieve Mining 5.0, where human-centric design and sustainability objectives are placed at the core of the digital advancements of Mining 4.0. There’s a particular emphasis on collaboration between humans and machines that draws on automation, AI, digital twins and robotics to create a mining industry that’s smarter, more inclusive, sustainable and aligned with global decarbonisation goals.

But what could this look like in practice?

Make the most of what’s possible today

Why not start by removing humans from frontline, often hazardous, operations? Autonomous vehicles and processes can take their place, controlled and supervised by staff in Integrated Remote Operations Centres (IROCs). Advanced connectivity solutions tailored to each site can support drones that collect and transmit data via high-resolution video to the IROC for near real-time decision-making or deeper analysis.

Expanding the use of IoT sensors to machinery can support predictive analytics to optimise energy-hungry and cost-intensive processes, as well as predictive maintenance programmes to avoid shutdowns and keep operations cost-effective 24/7.

Expanding the use of IoT sensors to machinery can support predictive analytics to optimise energy-hungry and cost-intensive processes, as well as predictive maintenance programmes to avoid shutdowns and keep operations cost-effective 24/7.

Mining's ecological impact can also be reduced significantly. With robust, low-latency connectivity across the mining area, operators can use advanced technologies such as LiDAR high-resolution surface mapping and AI-powered geological modelling software to identify and remove only veins that contain ore. This minimises ecological disruption and enables operators to tailor their mining approaches to individual geographic profiles, maximising operational efficiency.

Mining operators can rely on advanced cyber security technologies to defend valuable and sensitive data, such as geological data about the location of mineral reserves and proprietary techniques. Their digital defences protect their data at rest and as it travels digitally, as well as key systems and technologies such as OT Industrial Control Systems, SCADA, automation and IoT, which are vulnerable to attacks that could lead to costly downtime.

In general, a foundation of robust connectivity that underpins and enables interaction between advanced digital technologies means mining operators can be ready to support any evolving capabilities they want to adopt. From the essential but unexciting data monitoring and reporting for regulatory compliance to blue-sky thinking around an energy-efficient, completely autonomous mine, mining operators can be ready for a sustainable, safe and profitable future.

Mine the possibilities

This is just the beginning of a deeply interesting conversation exploring current and future mining challenges and how we aim to help overcome them. Future articles in this series will delve into strategies to help mining companies extract maximum value from network connectivity, cyber security, voice services and 5G technologies, before we look to the future and the potential of Mining 2050.

Look out for the next article in this digital mining series, coming soon.

And if you’d like to discover more about how BT can support your mining operations, Duncan and his team are ready to help. Any discussions about digitalisation will have cost management at their core. We always start with a blank sheet of paper and no preconceptions; we understand that every site is unique and requires an individual approach, and we look forward to exploring the possibilities of digitalisation with you.

To schedule a conversation, please contact Duncan at: duncan.vanjaarsveld@bt.com