The future of Resources will be powered by smart data

The resources industry is going through hard times… and not just in Australia. According to a recent survey of global CEOs by PwC, “72% of mining CEOs think the threats to growth have risen in the past three years, compared to just 59% of overall industries.”1

Just in April and May 2015:

  • The Church of England announced it would be divesting its investments in the fossil fuel industry
  • Tesla released low-cost technology for harvesting and storing solar power – not only for individual households, but for small-to-medium organisations
  • Attention was turned to Germany’s success in shifting towards renewable power sources such as wind, wave and solar

Of course, not all resources are used in the generation of power, but other threats to industry include changes in national regulation and tax regimes.

The economic outlook for resources is another factor; according to PwC’s findings: “Mining CEOs are much gloomier about the economic outlook than their counterparts in other industries: only 16% believe it will improve in the coming 12 months, compared to 37% of the overall sample.”

How can the resources industry respond?

Many resources companies see digital technology as key to reducing operational costs – especially the ability to move big data into ‘smart data’. In fact, mining CEOs are more receptive (and bolder) than most, according to PwC’s survey: “Only 8% of mining CEOs worry about the speed at which technology is advancing, in sharp contrast with the 57% of CEOs in our total sample who expressed alarm on this score.”

North American research by Accenture found that 90% of the mining company executives they surveyed felt that incorporating digital technology into their business strategy would revolutionise the way they do business to a degree similar to the advent of the Internet in the 1990s. They saw digital as providing a significant source of value and that companies not embracing it would lose competitive position and even face extinction.2

So technology is seen as a key response to industry threats, with cost reduction another. PwC found that: “Keeping a reign on costs is a key priority; 72% of mining CEOs say they will implement a cost reduction initiative over the next 12 months.”

PwC also found that miners were looking to simplify their business models and focus on their core properties. Similarly, Accenture says that digital technology is the new frontier for resources companies to improve their operations, productivity and identify growth opportunities.

So how does technology help?

On the overall benefits of embracing digital, According to PwC: “Mining CEOs who have invested in digital technologies point to various benefits, including operational efficiencies, better utilisation of the data they collect and an enhanced corporate reputation.

Smart Data

According to physicist and computer scientist, Dr Florian Beil of Siemens, mining, oil and gas are among Australian industries standing to greatly increase their productivity by harnessing the immense power of big data and turning it into smart data. He reckons Australian industry could save billions of dollars by adopting smart data tools. “A decade ago, it would have taken 1,000 years to produce 5 billion gigabytes of data. Today, the same volume is generated in less than 10 minutes. This phenomenon we call big data.” 3

To give one example of the volumes of data that miners are dealing with, Rio Tinto have 900 haul trucks around the world and, every day, 5 terabytes of data is produced by these trucks alone. 4

Data Analytics & Modelling

PwC noted that data analytics was seen by most mining CEOs it surveyed as strategically significant. Accenture’s survey highlighted the use of analytics and big data for the integration of resource modelling data and operation status, to help metals and mining companies to better control operational costs.

Strategic Decision Making

Around four-fifths of the North American mining executives that Accenture surveyed had digital programs for driving strategic decision-making that were commanding support from senior executives. A similar number were using digital technologies across their IT, business operations, finance and human resources.

Mobility in Operations

The mobility component of the ‘digital revolution’ is recognised as a key operational tool in the field for tracking maintenance and reliability, as well as aiding in occupational health and safety. Mobility has tremendous capacity to deliver better status updates for faster decision-making. However, not surprisingly, the resources industry is less likely than others to leverage mobile or social technologies to engage with its customers.

Looking ahead…

Accenture’s miners were asked to look ahead five years: “Executives believe digital will improve company productivity (73%), reorganise operations (65%) and optimise the supply chain (58%).”

How Nextgen helps

We offer a range of ICT services and infrastructure to resource companies seeking to transform in a difficult environment – allowing them to optimise the use of existing assets, achieve faster decision making through big data analytics, increase worker productivity and safety, and deploy cost-effective cloud technologies.

We have a significant heritage in building critical infrastructure for the resources industry, most recently our North West Cable System linking Darwin with Port Headland via the offshore gas fields of the North-West Shelf. This joint initiative with resource companies including Shell and Roy Hill is opening competition and delivering high-speed, reliable communications between the North-West Shelf, Pilbara and Kimberly’s with the rest of Australia and the world.

For more information visit The Nextgen Group http://www.nextgengroup.com.au/

  1. PwC, 18th Annual Global CEO Survey, 2015 http://www.pwc.com/gx/en/ceo-survey/2015/industry/mining.jhtml
  2. Accenture, Digital investment to disrupt mining and metals industry over next three years, 5 March 2014 http://newsroom.accenture.com/news/digital-investment-to-disrupt-and-drive-mining-and-metals-industry-over-next-three-years-accenture-survey-shows.htm#rel
  3. Australian Mining, Smart Data revolution: Australia poised to save billions and boost productivity, 5 August, 2014 http://www.miningaustralia.com.au/news/smart-data-revolution-australia-poised-to-save-bil
  4. Greg Lilleyman, Group Executive Technology and Innovation, Rio Tinto at Austmine 2015: http://www.austmine.com.au/News/articleType/ArticleView/articleId/2622/Live-from-Austmine-2015-Greg-Lilleyman-Group-Executive-Technology-and-Innovation-Rio-Tinto#sthash.mUTC0wit.dpuf