IBM: building a digital ecosystem to support the mine of the future
“Technology, in its various stages of evolution, is our business at IBM,” reflects Manish Chawla, Global Managing Director for Energy & Natural Resources. “We've been involved in mining for decades, and just like in any other industry we’ve re-invented our offerings to add services, software, data handling, cloud and AI capabilities. Our focus has progressed from IT and core functions to meet the needs of business transformation projects such as SAP implementations or process outsourcing, to support the mining industry in managing data as a strategic asset; helping the industry to capture, monetise and secure it.”
IBM’s portfolio features a set of offerings targeting enterprise & operations transformation, outsourcing, SAP implementations, and helping clients use their data to their specific strategic advantage. “Look at technologies such as blockchain for traceability in the supply chain,” Chawla adds. “Today, we are a full-service partner focused on the employee experience, while using technology for transforming various functions across a mining organisation.”
Chawla notes a recognition from the mining industry that technology can now solve specific problems from connectivity through to autonomous solutions. “Now we’re able to harness the data, the C-suite can see the importance of digitisation and how it will drive the business in the future,” he says. “A technology-savvy and enabled mining enterprise is critical for attracting and supporting the workforce of the future. How do you get people out of the unsafe conditions of underground mines in remote areas and make the industry attractive to a new generation? Technology holds the key.”
A recent study by the World Economic Forum forecast that over the next decade the mining industry will create further value of $190bn from additional transformational measures. “When these strategies are executed in a more integrated fashion, inside-out and outside-in transformation, we believe businesses will be at a great advantage from humans and machines working together,” explains Maxelino Nelson, Senior Executive for Industry Innovation, Global Solutions, & Business Strategy at IBM. “This will outperform humans or machines working on their own. It’s a great opportunity for us and our mining clients to solve some of the societal challenges relating to sustainability while developing the mining sector’s ecosystem to partner with IBM to truly transform the business in a more holistic way.”
Nelson notes that over the past 5-10 years the digital transformation journeys IBM’s clients have taken have been characterised by AI and experimentation with customer-facing apps; activities that have been driving the cloud during chapter one of a digital reinvention.
What will chapter two hold? “We believe industrial businesses are ready to move towards business reinvention: scaling digital and AI and embedding it in the business. It's about hybrid cloud, moving mission critical applications from experimentation to true end-to-end transformation. The key to winning is centred around what we at IBM call the ‘Cognitive Enterprise’.”
With the initial trends of the first chapter maturing, Nelson maintains we’re on the cusp of the next big shift in the business architecture. It will be driven by the pervasive application of AI and cognitive technologies, combined with data, to the core processes and workflows across mining organisations alongside important functional areas such as finance, procurement, talent and supply chain. The results of this revolutionary change will be defined as the Cognitive Enterprise.
“Companies that get this journey right are on the way to being a Cognitive Enterprise,” affirms Nelson. “In our experience, critical areas for natural resources industries to get right on this journey are openness and collaboration, integration, intelligent workflows and cultural skills. In a time of continued volatility and disruption, open innovation and co-creation are vital to be able to partner across ecosystems and learn from other industries to achieve fundamental transformation as 90% of the jobs in mining are changed, not necessarily replaced, through technology.”
How is IBM helping companies embrace Mining 4.0 and support the move towards the digital mine of the future? “We've developed a data-driven productivity platform with Sandvik, a leading supplier of underground mining equipment. This partnership has seen us connect their assets, their equipment, to our cloud to be able to pull data off. The value proposition to a mining company is not only to get data from the Sandvik equipment, but also from other vendor feeds,” explains Chawla. “Interoperability as well as the open data standard is critical for a mine operator. They get visibility to production information, help with equipment, maintenance analytics and improved uptime.”
Built on IBM technologies, Sandvik offers a platform for underground mine optimisation, both for production and data/maintenance related aspects. “We're also the primary data analytics platform and AI software services partner for Vale for where they have an AI centre of competence,” Chawla reveals. “We're doing an extensive set of use cases with them, including route optimisation for trucks, testing safety use cases and optimisation of smelters.” IBM is also working with Newmont Goldcorp to help them better understand their ore body, allowing them to reduce the time spent by geologists in analysis and data collection to determine where to guide the next drilling campaign. “We've reduced inaccuracy by 95% with the geology data platform that we call ‘cognitive ore body discovery’,” says Chawla.
IBM is committed to supporting the sustainability efforts of mining operations across the globe. “By using intelligent workflows on the blockchain to address social sustainability in the context of the entire supply chain, miners can demonstrate social responsibility and also begin to build a culture of innovation,” believes Chawla. “The work we are doing on the Responsible Sourcing Blockchain Network (RSBN) with RCS Global allows businesses to track cobalt from industrial and mining companies to ensure that they are working responsibly, whether it's in the Congo or other parts of the world, across the supply chain from mine to smelter to battery manufacturers and to automotive OEMs.”
IBM are seeing many automotive OEMs joining the platform along with key industrial scale miners operating cobalt mines in Congo who wish to augment their use of OECD (Organisation for Economic Co-operation and Development) responsible supply chain guidelines. The company is looking to extend the network to other metals such as tin, tantalum, and gold, which are all important to the new economy emerging for minerals associated with electronics and EVs.
Chawla notes the demand, driven by the rise of EVs and electronic brands, for an active, working and open democratic network to ascertain responsible sourcing and support artisanal miners to be able to operate safely in a fair-trade manner.
IBM is also working with Minehub – a mining and metals trading platform – helping it streamline operations with various business partners across the mining ecosystem. “The MineHub platform is not a market-maker; it allows buyers and sellers to agree on trade. It comes to play once the trade has been set and the terms have been agreed,” explains Chawla. “This helps to improve the operational efficiencies, logistics and financing, while concentrating the supply chain from the mine to the buyer.”
MineHub has been working in collaboration with IBM and other industry participants across a value chain that includes the likes of ING Bank, leading precious metals firm Ocean Partners and Capstone Mining. Minehub also features clearing houses, refiners, smelters, financiers and other providers like Kimura joining along with royalty holders and streamers such as Lincoln. A tier one miner is also set to trial the platform. Chawla notes they are all benefiting from the efficiencies of the platform, all providing key pieces of information to these transactions.
When it comes to digital innovation across the mining panorama, Chawla says it’s still a challenge to ensure all parties are aligned so that everyone benefits. “It’s important to get centre-led IT and overall C-suite leadership both working towards the improvement of operating assets,” he says. “With much of the work we do, we also think hard about the experience of frontline employees and incorporate this into the design of the solutions to ease adoption. We’ve taken this approach with Sandvik where we’ve done design sessions at the mine site with shift supervisors, truck drivers and mine managers.”
A key obstacle to overcome in order to successfully integrate digital innovation is access from a network perspective and being able to capture the data. “Many companies are upgrading their networks and 5G is exploding,” notes Chawla. Allied to this he believes measured interoperability is vital. “Mining companies operate differing fleets from a range of vendors with equipment right across the value chain. Each vendor is pitching their own solutions. Do they go with one of the vendors? Or do they go with developing their own platform? And then, will the vendors open up and share the data that the mine operators and ourselves can leverage in partnership? This complex ecosystem becomes a challenge. If it's approached in collaboration with interoperability in mind, then you can accelerate. But that is a continued two steps forward, three steps back kind of situation.”
IBM is pushing forward in 2020 to meet its goals around driving innovative solutions for the energy and natural resources industries. “We want to infuse more data and AI capabilities into their operations to take them live,” pledges Chawla. “We will be continuing our work on three specific new platforms to further enhance the idea of ecosystems coming together to drive tangible outcomes for our clients in all the vectors of mining.” Chawla’s team also plan to nurture and scale IBM’s cybersecurity offering to secure operating technology and systems. “As more plants, more mines, and more equipment get connected, the cyber threat increases, so we’re pleased with the tremendous progress we’re already making to secure operations as they grow.”
Nelson confirms IBM is currently working with a large oil and gas super-major for potential partnership to co-create a digital mining services integrated platform. “This platform is tendered around developing a different model for how mining companies consume digital solutions and services, and how mining providers and solutions developers can make them available to the industry. It is a game changer and it shows how upbeat and interesting the mining industry has become to wider industries."