South American mining firms have a reputation for being as productive as any of the best in the world. However, a study released by British satellite telecommunications company Inmarsat, showed that they are precariously limping on the adoption of key new technologies like the internet of things (IoT).
Efficiency and productivity have partly lost relevance as value-increasing tools. “Efficiency plateaued very much in the mining industry in terms of tons per person. We are now looking more at technological solutions,” explained Joe Carr, Global Mining Director at Inmarsat.
The study found that 98% of the mining companies surveyed in North America had at least one fully-deployed IoT project. This percentage dropped to 70% in Asia Pacific, 50% in Africa, and to an anemic 40% in South America.
There are differences between countries. While 50% of those surveyed in Chile had at least one fully-deployed IoT project, 40% said so in Peru, and only 30% in Brazil. “There is a lot of headroom in South America for IoT projects,” politely diagnosed, Carr.
Mining companies are investing in IoT because it has positive returns in production, but also in areas like health & safety, and environmental sustainability, key for businesses to keep their social license.
A place to start
Per Inmarsat’s research, IoT adoption has three basic challenges in South America: connectivity, infrastructure, and skills.
“Only 13% of respondents said that they could get reliable connectivity on their sites via satellite, Wi-Fi, or other means,” said Carr. “You need to be able to connect devices, whatever they may be: water sensors, whatever they are. This is one of the primary blockades. You can’t deploy an IoT project unless you can connect the devices.”
On data collection, Inmarsat found that only 40% of those surveyed could aggregate data at the place of operations (at the edge in IoT jargon), and if they collected the data, half could do something with it to create useful business insights.
“They are struggling to collect it, and even when they get it, they are really struggling to assess the data. In South America, 50% of the firms said they didn’t have the skills in-house. Even if they were managing to collect the data from the edge, solve the connectivity problem, and solve the data aggregation issue, they lacked the skills in-house to analyze it to provide insights.”
Finally, on the security of the information, 10% of those interviewed said they had not taken any steps to secure the data of their IoT projects. The Inmarsat expert found this figure disturbing, “given the critical nature of the things we do in the mining industry and the data we have. The lack of cybersecurity specialists and cyber knowledge within companies is a big one.”
Management: the key
Top management seems to be at the heart of the slow adoption of IoT in South American mines. “Less than 20% said that they had the skills at a strategic level to plan these things. You have to have a digital strategy in place.”
He finds this to be a problem around the world. “We found that most companies said they wanted increased skills at strategic and management level. That is widely understood across the mining industry. That’s not just true of Latin America.”
The problem might come down to the mindset of miners, Carr said. Managers who run mining companies were miners themselves. “We tend to attract from within the industry and these people aren’t necessarily those who have grown up with these skills. We have a skill shortage within the industry. That is widely known.”
Many mining companies face challenges when staffing their teams, even for the most normal, routine mining applications. “We struggle to get mining engineers, geologists, and drill operators. But then, say, we want to attract data scientists. There is greater competition to attract these people, and especially at management and strategic levels. You have to find people who understand the mining industry, and things like IoT and machine learning. It’s across the board. And yes, you see it in South America, but you see it across the world as well.”
The Inmarsat study stated that IoT has begun to take a foothold in the sector with increased rates of adoption across the board. “What we discovered was an industry that, historically, has been slow to adopt radical ideas now beginning to embrace the use of IoT, but still working out how to make the most of it.”
Lessons in talent attraction
“The mining industry loses a lot of people to digital companies, startups, bigger digital companies in terms of cybersecurity, and data analytics,” Joe Carr emphasized.
The issue of attracting skills and talent revolves around the fact that the industry needs to change its image, the survey exposed. “A massive amount of the respondents, 94%, said they have to change or improve their image, to attract that technology.”
Changes will probably be high on the industry´s agenda, to facilitate its access to tech tools. Work conditions in mining can be also improved with greater digital capability. “People would not have to be on-site for several weeks and then come home,” Carr mentioned as an example. Miners have reported successes in implementing projects to safeguard workers via remote tracking, monitor drilling, and observe acid mine drainage remotely.
Mining companies make 7% of the revenues of the 1,500 largest companies in Latin America, but they represent around 25% of the revenues of the largest firms in Peru.
Mining production in Latin America
Position in world rankings
Sources: 2017 and 2018 production figures