Leading enterprise software provider, SAP, has advised mining companies to look to big data as a way out of the falling profitability currently witnessed in the sector. This is as a recent PWC report disclosed that market capitalization of the top 40 mining firm dropped by 23 percent – about $280 billion – last year.
In a statement to the press, Pedro Guerreiro, Head of Sales: Energy &Natural Resources at SAP Africa said that mining is an industry that generates capital so large it can determine the health of country GDPs. In 2014 alone, the top 10 mining companies globally had shared revenues of nearly half a trillion dollars; yet, it was a bad year.
He noted: “One of the greatest threats to the mining industry is that it is mainly controlled by factors outside of the sector. Foremost is the pricing of commodities which is a big challenge for an industry invested in the core financial drivers of modern society. If mining stops, so does the world. The result is that the world always has a say in mining’s fortunes.”
“Again, mining is a strange business where the longer you operate in a market, the harder it becomes to turn a profit. Mineral seams become tougher to reach, the quality of ore reduces as a result and more effort has to go into extracting true value. Mining is also expensive. It manages an unwieldy family of assets, a protean workforce, shifting regulations and the remote locations meansthat mines almost always bring their own infrastructure with them,” he added.
Amid such chaos, mining firms are forced to grapple with how to establish real-time, day-to-day insights to their operations; discover and eliminate operational efficiencies; respond proactively to challenges on the ground and manage the value chain. This is in addition to thinking up sustainable business methodologies for the operations of the future.
Guerreiro proposed that a clear recipe for success is to find efficiencies in the supply chain. He said: “Mines move assets and commodities through a large web of suppliers and clients. Great benefits are being found when these interactions are automated and orchestrated through a single source-to-source supplier platforms such as Ariba which has been used with great success at Rio Tinto mines.”
“By using Internet of Things platforms, sensors and predictive analytics can reduce time spent on the maintenance of assets. Breakdowns can be predicted and staff directed in real-time through mobile platforms to address failures. According to SAP’s own research, such solutions can reduce an operation’s annual maintenance costs by over 30 percent,” he said.
He cautioned that a truly robust technology platform for mines should include advanced human resource and regulatory features. This includes worker performance and training, access to appropriate safety documentation and the automation of any auditing requirements. Above all, such a solution must be a single platform to enable mines unify their main moving parts, consolidate operations and gain a true high-level overview of what the business is doing.
“Instead of relying on the diaspora of machines, software suits and fragmented data pools of the past, modern business solutions resemble SAP HANA: single, yet modular and powerful implementations that pull on all the threads together; from tracking customer interactions, to training workers, to allocating the right number of trucks to an operation. These are no longer dislocated joints, but increasingly a single organism with many moving parts,” he said.
SAP is the market leader in enterprise application software in terms of software and software-related service revenue. With over 293, 500 customers including large global organisations, governments, educational institutions, SMEs and subsidiaries, the company’s industry-specific applications are driving a business and technology revolution that currently caters to over 50 percent of the world’s enterprises.