This article is one in a series about ICT in different sectors for Brainstorm Magazine of South Africa.  It was co-authored with Hilton Tarrant.

The mining sector has been slow in its uptake of technology, but the global economic crisis and long-term issues are serving as catalysts for adoption.

The outlook for the mining sector has radically changed due to the global economic crisis. This boom and bust cycle has left many mining companies considering ways to manage operating costs in order to remain economically viable. But this is not the only challenge the sector faces, according to Deloitte’s report, Tackling Trends 2009: The Top 10 Global Mining Issues. In the long run, the sector must find ways to remain sustainable amid the sea of legal, social, economic and environmental issues.

These challenges actually present opportunities for the ICT sector because technology can manage complex systems, streamline processes, reduce costs, and improve efficiency and productivity. Consider enterprise resource planning (ERP) software, which coordinates the entire mining value chain, from locating to divesting minerals. Think of radio-frequency identification (RFID) and global positioning system (GPS) technologies, which track the movement of minerals and equipment.

There are also examples of technology specific to the mining sector. The oil sector is demonstrating the potential of ultra-deep water drilling technology, which drills and extracts oil from greater water depths.

The technology is creating and extending market opportunities to the industry by accessing previously unreachable deposits. For example, new oil operations were recently announced off the coasts of Ghana and Sierre Leone.

Dr Greg Baiden, director of Penguin ASI and a global expert on automation, says: “Automation in the mining industry will follow similar trends to those in the manufacturing industry.”

It starts with a person using an automated machine to handle multiple tasks and eventually evolves to artificially intelligent, autonomous machines. Baiden says the future includes intelligent machines that can heal themselves.

For now though, automation has not reached critical mass in the sector. Large mining companies like Rio Tinto and BHP Billiton are considered early adopters. Teleoperations, or telerobotics, is the operation of a machine at a distance.

Penguin ASI’s wireless technology, which communicates with robotic equipment under water, gives a glimpse of the potential of telerobotics in solving some of the mining sector’s sustainability issues. This wireless technology will enable mining companies to extend the life of their mining operations on land. Imagine flooding mines with water to double their mining depth, and using telerobotics equipment to run the operations.

One natural result of using better technology and innovation is cost reduction in the mining value chain. This will eventually serve the economic development of Africa well. As the cost of mining decreases, it allows smaller mining firms to establish themselves.

The business opportunities for ICT providers in the mining sector can be found in the corporate, technical and value chain systems. Historically, ICT providers focus on mining as a niche. However, as enabling technologies provide broader benefit to the sector and new mining entities arise, there are increased opportunities for the ICT sector.

Mining of Data

Also, the mining sector faces serious challenges to its long-term sustainability. ICT firms, which identify gaps in the value chain and create solutions that close the gaps, leverage the value chain and contribute to sustainability, will carve their own space.

While there is undeniably a lot of technology used in the underground oreextraction part of mining, more focus is currently being put on the processing side of productions.

MD of Softline Accpac, Jeremy Waterman, says that “inherently it’s a reasonably simple business”. With mining, “you’re putting a whole lot of resources in and you’re taking production out”.

But there has traditionally been a disconnect between production and what Waterman terms the “financial side of things”, particularly among smaller miners. This has been a cause of frustration within the industry, and a number of solutions now seek to marry the two elements.

This is a classic implementation of an enterprise resource planning (ERP) system, but up until recently, “marrying the elements” was simply absent.

“In the past it was tended to be done more on a kind of matchbox,” says Waterman. “You had a whole lot of costs and you had a lot of production and you subtracted one from the other and you made a profit.”

Nowadays it’s a lot more complicated. Waterman describes how workflow management systems can be used for control, and to “capture production data that’s coming back” into the system. The real difference is made by the layering business intelligence on top of these systems.

Ugan Maistry, business unit head of Mining & Manufacturing at EOH, agrees: “Over the years, there’s been this maturity in terms of process-control and automation systems to be able to execute. There is now maturity in business systems like ERP.”

But over the past few years, Maistry says there is a newfound maturity around the systems in between the parts. He calls it ‘mining execution systems’, and describes it as very similar to manufacturing execution systems.

He likens many of the processes in mining to inventory management. “Previously, people only knew what they had and what they produced if they actually stopped their operations and took stock.”

“Questions like, ‘Where is the actual material in their value chain?’” adds Maistry.

He says some customers have been spending considerable amounts of money in the last two or three years on exactly this: business intelligence systems, which he likens to “enterprise manufacturing intelligence”.

“But,” says Maistry, “what they haven’t explored is how to extract value out of that information.”

This is the next frontier. Now, “our customers need to mine the data, and I’m talking end-to-end,” says Maistry. “It’s about looking at information in context, not just in terms of volumes and quantities, but in costs as well.” Waterman takes it one step further: “We [South Africa] are trend-setters in mining as a whole.

“There’s been an explosion of midcap miners, and that is where we’re seeing the real growth.”

Aside from ERP and workflow management systems, the back office sees similar ICT trends to those in pretty much every industry. Working costs are being rationalised, with single vendor outsourcing one way of saving money.

Licensing rationalisation is being looked at, says Maistry, and providers like Microsoft and SAP are “coming to the party.”