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  • Articles: BDO SOUTH AFRICA - Technological Innovation in Mining Sector Set to Continue

Articles: BDO SOUTH AFRICA - Technological Innovation in Mining Sector Set to Continue

27 February 2017

By BDO South Africa

During tough economic times companies look for ways to cut costs in order to reduce overheads and improve profit margins. One of the most dominant trends we are seeing worldwide is that of technological innovations coming to the fore as companies seek out alternative methods of achieving productive outcomes.

This is according to Owen Murphy, Africa Desk Leader for BDO who says that the same applies to businesses in the mining sector, and that a noticeable trend which emerged at the recent Mining Indaba 2017 is that of high-tech applications being used by mining operators.

“Cost pressures that were experienced during the recent tough economic times incentivised operators to look for innovative ways to cut costs and high-tech solutions met this requirement. This is a trend that looks set to continue, even in good times, with applications being applied in mainly the exploration and processing side of operations.”

“When the economy is good, companies may recognise potential areas for improvement, but are possibly not strongly motivated to fix them. However, when times are slower a change to a production or service process has fewer implications for current profits and great prospects for future earnings. It turns out to be a great time to innovate and prepare for the next upswing,” says Murphy.

A good example of this which we witnessed was a project at the Cullinan mine operated by Petra Diamonds where JSE listed Master Drilling is using its vertical raise bore drilling system in a horizontal application. Master Drilling CE Danie Pretorius said the doubling or tripling of advance rates from 2m per day with drilling-and-blasting methods to 4m or 6m a day with the horizontal raise bore system would bring benefits to companies that could deploy the system.

Sherif Andrawes, Natural Resources National Practice Leader for BDO in Perth, Australia advises that world-class breakthroughs in mining technology have been achieved worldwide, “For example, companies such as Rio Tinto, BHP Billiton and Fortescue Metals Group led the way some time ago by installing automated trucks and drill rigs across some of their operations - examples of the cutting-edge technology being used in the mining industry.”

Andrawes provides a list of the possible benefits available through innovative developments:

  • Increased energy efficiency and less waste
  • Less waste to remove
  • Continuous rather than batch operations
  • Less movement of equipment
  • Increased preventative maintenance
  • Increased reliability and availability
  • Faster operation
  • Automation and remote operations can reduce labour costs
  • More flexibility
  • Less waiting and queuing
  • Increased instrumentation and monitoring
  • Rapid mobilisation
  • Scalability
  • Able to mine lower grade resources at low cost

“The argument for innovation in the mining industry has never been more persuasive. Despite improved outlooks and sentiment towards the sector, the last few years have seen a continued rise of operation expenses and capital costs and a subsequent decline in productivity,” says Andrawes.

“Those wanting to reverse these trends and begin to enjoy the full value of their investments have realised the need for innovation in their business systems, including: quicker and more accurate characterization of ore bodies; speedier development of mines and rapid extraction - with improved recovery rates.”

Andrawes and Murphy concur that embracing technological change and adapting business practices in the mining industry, as with any business sector, is a black and white proposition - you either do it or risk being left behind.

“We look forward to witnessing what other innovations are developed within the mining sector in the coming years and how these will positively affect the industry.”