Report

How to Maximize operations productivity in

Mining industry
Even before the 2020 COVID-19 lock down, the mining
industry was facing significant challenges that affect
profitability. According to research by McKinsey, mining
profitability had already been in decline for at least
three years.
More than ever, firms need to understand and
overcome these problems if they are to grow profits.
And the aftermath of the global slow-down increases
the urgency with which they much act.
Declining productivity issues
Ironically, at the very moment that management and
shareholders will demand greater efficiency and
profitability, the mining industry is 28% less productive
than it was ten years ago. Productivity is caused by a
range of factors, including talent shortages, lower grade
ore yields, increased input costs and historically poor
investments.
Taken together, these factors combine to damage
efficiency, productivity and profitability.
Escalating costs
In the past 20 years, the majority of new base metal
discoveries have taken place below 300 meters; the
deeper the mine, the greater the cost of extraction,
particularly as operators try to uphold safety standards
for their orders.
Depth is not the only issue however. Access to quality
ore often means mining in remote or politically unstable
regions. The costs of negotiating international trade
licenses and overcoming local objections quickly mount
before excavation work even begins. Suitably skilled
and qualified employees who are willing to work in these
potentially undesirable locations also command a wage
premium.
Inefficient spending
The rush to extract ore can lead to an “at any cost”
strategy, spending large sums without properly
considering the longer-term implications. Inefficient
capital allocation is most commonly observed in terms of
labor and production, or through maintaining operations
at marginal mines that are unlikely (or unable) to generate
a profit at a time when metal prices are depressed.
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How can the mining industry address
these issues?
Efficiency is not simply a measure of time. As they re-
evaluate their strategy, mine operators will need to focus
on maximizing throughput per unit of time, unit of quality
and unit of cost. Analysis of the mining industry has
identified three key areas to address in order to boost
productivity.
1. Deploy intelligent technology
Following the lead set by other industries, like
manufacturing, that are similarly affected by poor
productivity, miners will need to adopt a digital
transformation strategy. This means unlocking and
unifying the data held across the organization so that it
can be used.
Technology alone will not magically resolve productivity
problems - but it will create a platform on which to begin
making incremental improvements. The correct solution
will make data available at every level of the business,
allowing stakeholders to make informed decisions that
result in short- and long-term gains.
An effective management system capable of tracking
operations at mines will increase operational
transparency and allow managers to accurately assess
performance. Replacing disparate data collection and
reporting mechanisms, particularly those that are still
paper-based, will ensure that information is always
available centrally, and no details are lost.
Once centralized, data can then be analyzed both
manually and automatically. Decision makers are able
to access the information they need to make informed
operational and strategic decisions with minimal risk.
More importantly, they will also be able to identify
productivity bottlenecks and weak points.
2. Focus on operational excellence
Quantum gains in productivity are rare – the largest
returns will come from incremental improvements to
operations. A series of small changes, often as part of an
operational excellence program, will generate significant
returns over time.
Data also sits at the heart of operational excellence – and
it is not just for the attention of senior management. By
making relevant, contextual information available to all
workers, they too can make smarter working choices.
Take the humble shift hand-over log for instance. This
document is not only a regulatory requirement, it is also
a vital tool for ensuring that the incoming shift is fully
briefed on work that needs to be done. Digitizing this
asset allows you to share information further, faster,
ensuring that everyone is fully briefed on the issues that
may affect productivity and safety.
By giving employees information they need to improve
their own performance, you are also equipping them to
improve productivity at the individual and team level.
Operational excellence gains can be realised across the
entire operation with access to the right information at
the right time.
3. Improve capital spend Declining production and
increased demand is forcing mining companies to boost
their capital spend. But when faced with lower yield
ores and investor expectations, this spend needs to be
smarter than ever before.
Borrowing a concept from the chemical industry, mine
operators can help to better manage capital spend
by building a digital twin of their operations. Using 3D
modelling they can build out a plant before construction
begins, solving many of the issues that add to project
cost. The same digital twin can be used throughout
the life of the operation, allowing designers to model
potential upgrades and enhancements, calculate
the potential return on investment and to map out
installations without affecting operations.
Improved access to data allows mine operators to better
target their spend, reduce waste and invest where they
can make the greatest productivity gains. Enhanced
visibility will also allow your team to monitor equipment
performance and identify the signs of imminent failure.
Using this insight it is much easier to plan and execute
proactive maintenance to optimize performance, rather
than trying to deal with an unexpected failure that
further reduces productivity.
Introducing the Hexagon PPM division
Hexagon’s PPM division empowers mining industry clients
to transform unstructured information into a smart
digital asset. Our tools allow you to visualize, build, and
manage structures and facilities of all complexities,
ensuring safe and efficient operation throughout the
entire lifecycle.
Hexagon PPM has a range of solutions for the mining
industry to:
• Combine portfolio, project and contract
management processes and data into a single
system.
• Create structural, piping and instrumentation models
for sharing and review across the organization.
• Build a reliable, accurate digital twin of processes
and make sense of your unstructured data using
asset lifecycle information management.
• Reduce human error and workplace accidents
by improving shift handover processes and data
capture.
• Collect and analyze data in the field to provide real-
time insights and address productivity issues as
quickly as possible.
Applied correctly, the information stored in Hexagon
systems will help you improve productivity and overcome
the profitability challenges currently facing the mining
industry.
Discuss with the experts
To see what Hexagon solutions mean for your mining
operations, please get in touch to arrange a short demo.
Contact:
• Keith Stroughair, Account Manager, Hexagon PPM
• Rodrigo Vigna, Senior Technical Sales Consultant,
Hexagon PPM
Hexagon is a global leader in sensor, software and autonomous solutions. We are putting data to work to boost
efficiency, productivity, and quality across industrial, manufacturing, infrastructure, safety, and mobility
applications.

Hexagon’s PPM division empowers its clients to transform unstructured information into a smart digital asset to
visualize, build and manage structures and facilities of all complexities, ensuring safe and efficient operation
throughout the entire lifecycle.

Hexagon (Nasdaq Stockholm: HEXA B) has approximately 20,000 employees in 50 countries and net sales of
approximately 3.9bn EUR. Learn more at hexagon.com and follow us @HexagonAB.

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