In 2023, gold mining costs increased by 18% year-on-year – a record for the sector, according to the World Gold Council. The Wall Street Journal called surging mining costs ‘worrisome’, and Statista’s operating costs breakdown for the sector, across the top 40 companies, saw an increase from 633 billion dollars to 670 billion dollars. In South Africa, the Minerals Council South Africa highlighted how rising electricity costs – an increase of 46% over four years – are having a significant impact on cost optimisation and growth within the sector. Minimising costs has become essential.
However, balanced on the other side of this complex cost equation is the need for mines to digitally transform. Technology is more than hype and glossy promises, it is a fundamental enabler of optimisation and efficiency within the mining sector, proven to refine operating expenses, improve workflows, reduce downtime, and refine resource usage. Every one of these benefits leads directly to cost savings in both the long and the short term. The challenge is to find a smart route to digital optimisation and transformation within the constraints of legacy architecture and dwindling cost margins.
The sector is constantly wrestling with finding a balance between recognising the need for innovative solutions and finding the money to pay for them. Digital solutions allow for mines to transition towards more energy-efficient solutions, so they are not only saving money on electricity costs but moving with intent towards meeting local and global sustainability requirements. Mines are aware of the fact that they contribute significantly to greenhouse gas emissions and want to play their role in reducing this impact and improving their sustainability rankings, but they are being pulled in multiple directions and each one costs money.
How can mines deepen their reliance on technologies that allow them to whittle down costs and improve operations without having to cut corners, costs, and people? The answer lies in intelligent optimisation and tapping into technologies that remove a mine’s reliance on ageing infrastructure. It is entirely possible for mines to build modern and agile solutions on top of their existing systems, using them as the foundation from which to build into the cloud. A modern architecture capable of managing the demands that mines need to put on it can evolve out of what mines have already put in place. Instead of expensive rip and replace, mines can evolve their architecture one evolution at a time. Building on the four pillars of sustainability, visibility, operational optimisation, and health and safety, mines can radically reimagine costs and systems while embracing the potential of digital.
One of the challenges often felt by the sector is buy-in from the board. The boardroom doesn’t always understand what digital means or how the cost of investing into certain solutions will deliver savings. This means it is key to quantify the value of technology in a language that’s understood by the CFO and the CEO. It means taking the cost conversation out of digital acronyms and hype and placing measurable metrics on the table that show decision-makers how, over a period of time, digital transformation will optimise operational efficiencies, improve maintenance and safety, and drive innovation. As a recent analysis of the value of digital technologies within mining pointed out – the adoption of digital depends on the willingness of the organisation.
The latter is key. Cost optimisation through digital transformation isn’t just predictive maintenance or transformed workflows, it’s also in the enablement of digital technologies and services to uncover new revenue streams and transform mining processes. If the C-suite can see the value of digital enablement beyond the investment level, then this opens the door to opportunity. The opportunity to explore the potential of digital technologies developed specifically for mines; the use of wearables that allow for seamless communication across workers and reduce accidents; autonomous vehicles that increase productivity; and visibility into operations that allows for more efficient time and asset management. Each one of these benefits directly translates into a cost saving – both in the short and long term.
With expertise and experience, BCX offers mines trusted digital transformation insights and roadmaps that allow for companies to step onto the digital transformation journey within cost and infrastructure limitations. A proven track record and more than 40 years of experience means BCX can provide safe, reliable, and cost-effective solutions to mines that are smooth in the transition, and easy on the budget.
