EY highlights strategies for digital maturity in mining

Digital maturity across the mining and metals sectors means that current digital solutions are merely functional or siloed, and only address parts of the value chain, according to Ernst & Young’s latest report on digital mining.

While mining companies have started to make some headway in using digital effectively to improve productivity, the report highlights that focusing on productivity alone is not enough to generate competitive advantage, and companies need to adopt a more cohesive, end-to-end approach to integrate digital initiatives.

The report also identifies around 60 key digital themes and initiatives across the sector, though it finds few examples of a clear, integrated and business-wide approach among mining and metals organisations.

EY global mining & metals advisory leader Paul Mitchell said mining and metals continued to lag other sectors in the realm of digital effectiveness.

“The value from digital will only be realised when companies change how they work, rather than succumbing to the lure of individual technology programs and pursuing local optimisation, which is not necessarily transformational,” Mitchell said.

“While a revolutionary approach to digital would be too disruptive, we believe mining companies should adopt a progressive, multiyear strategy that also accounts for business risk and the primary drivers of value.”

The report finds that introducing a series of digital transformation “waves” is the optimal way to transition a business from current to future state, steadily introducing more digital hotspots and interconnections as part of a coherent overarching strategy.

This approach is structured around four key components:

  • Digital pre-start: building out connectivity to prepare for digital transformation, which typically involves investment in infrastructure, communications and data.
  • Wave 1: activities that focus on the productivity or performance improvement agenda, and are typically operated within a single function. At this stage, digital can enable a mining operation to manage inherent variability and move toward manufacturing levels of productivity.
  • Wave 2: these activities are broader and span the whole value chain and include initiatives to better manage margin through interactions with customers and suppliers.
  • Wave 3: this stage refers to the rise of disruptive factors that may create significant changes in how the sector operates and may require a step change in business strategy.

“We see the end-state vision for the mining sector as constantly changing and businesses will need to be ready to adapt and change course as required,” Mitchell said.

“And while we don’t believe the sector will see radical disruption, the opportunity for new entrants to disrupt existing players poses a real threat.”

The report also highlights that, as the level of automation increases through Waves 1-3, mining companies will need to adopt new ways of working.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.