Companies in the mining sector have traditionally been slow to adopt new technologies due to the scale and complexity of their operations, as well as the hefty costs that come with change. The uptake of digital tools and solutions has consequently been limited.
However, challenging market conditions – driven by weak global demand for certain minerals and persistent excess capacity – are pushing mining companies towards digitalisation. Fourth Industrial Revolution technologies such as large-scale automation, artificial intelligence (AI) and virtual reality (VR) are increasingly being adopted as solutions to sector-wide problems including declining ore grades, safety challenges and operational inefficiencies.
According to a 2017 white paper by the World Economic Forum (WEF), digitalisation in the mining industry has the potential to deliver over $425bn in shareholder, customer and environmental value in the 10 years to 2025, which is equivalent to 3-4% of total industry revenue over that period. Beyond balance sheets, the potential benefits of digitalisation in mining could see global CO2 emissions reduced by 610m tonnes and over 1000 lives saved with enhanced safety measures.
Productivity levels have decreased dramatically from the early 2000s, although there has been a slight turnaround since 2014. A surge in demand for metals and minerals in the early 2000s – driven by an acceleration in economic growth and associated building in developing countries – quickly translated into high commodity prices and, with it, increased profitability. Boosting production volume became the industry’s top priority under these conditions, and many mining companies lost sight of the productivity parameters that underpinned thinking in the lean years of the 1980s and 1990s.