Deloitte: Top 10 Mining Trends for 2017

Deloitte’s new report, Tracking the trends 2017, identifies the top 10 trends facing mining companies in the coming year. It puts the spotlight on the next two years, noting that miners need to learn from mistakes of the past several years to figure out where to play and how to win. This will include rethinking strategy, lowering costs, using digital transformation to unlock productivity, and re-earning their social license to operate through sustainable environmental practices.

Over the past 5 years, most large mining companies have delivered double-digit declines in shareholder returns. Significant commodity price declines were not offset by productivity increases, cost reductions, or organic growth. Mining sector debt leverage stood at over .8 in both 2015 and 2016, in contrast to the .4 to .6 range of the 2010-2014 period. Increased leverage coupled with declining profits led to ratings downgrades, further restricting miners’ access to capital needed to invest. With commodity prices firming and leverage ratios beginning to decline, mining companies are starting to think about the future, with an eye to driving increased return on invested capital (ROIC).

According to Deloitte, that future will encompass ten key trends, including five that we have already seen in action:

  1. Optimizing existing assets based on ROIC — divesting lower performing assets, reducing debt, and pursuing low capital intensity growth options.
  2. Unlocking productivity improvement through innovation. This involves using sensors and actuators in a wide range of mining equipment to measure such things as tire pressure, road conditions, driver speed, and the like — all with an eye to reducing risk and cost.
  3. Unorthodox partnerships to solve collective mining problems, including turning vendors into partners.
  4. Using digital technologies such as those inherent in the Industrial Internet of Things (IIOT) to drive efficiencies in data collection, inventory and asset management, and operator safety.
  5. Re-earning the social license to operate. This involves lowering fuel consumption and reducing greenhouse gas emissions (GHG) and particulate emissions, with a focus on environmental sustainability.

We’ve seen these trends in the field. Newmont, for example, has used Blutip’s SmartRFuel technology to both lower fuel costs and reduce greenhouse gas emissions. Using Blutip’s SmartRControl technology on three Caterpillar 793D haul trucks, Newmont achieved an average fuel savings of 5.8% and reduced GHG emissions by 102 tonnes per year, per truck.  Blutip’s SmartRFuel platform works by remapping high-horsepower diesel engines based on specific applications, providing a cleaner and more efficient fuel burn. This reduces fuel consumption and carbon footprint. The remapping is done through software algorithms in real-time – no operator intervention is required in order to save fuel and reduce particulate emissions.

Anglo American also unlocked productivity through innovation by installing Blutip SmartRFuel technology on haul trucks for their Dawson, Capcoal, and Drayton mines. Blutip’s advanced IIOT sensors, data analytics tools and cloud-based monitoring dashboard provide unique fuel and positioning metrics such as:

  • Haul cycle efficiency (liters/tonne-km, liters per hour, etc.)
  • Fuel burn vs. vertical travel
  • Fuel burn vs. grade
  • Distance over ground
  • Truck efficiency rankings, fuel burn since last service, and other maintenance planning metrics

This data is allowing Anglo and others to reduce fuel consumption and employ predictive maintenance to lower risk of equipment downtime.

Finally, in response to mining companies’ requests to lower capital intensity, Blutip developed Fuel Savings-as-a-Service, a unique pricing model that eliminates any upfront capital spend or ongoing monthly rental fees. Instead, customers only pay Blutip when they actually save money on fuel, in a 50/50 shared savings model. This “no risk, all reward” approach helps mining companies invest in productivity-enhancing technology with no upfront capital commitment.

We think Deloitte’s on point. Mining’s future involves capitalizing on intelligent innovation and the IIOT to reduce costs, lower emissions, and accelerate productivity. And we’re working in partnership with our customers right now to deliver a future that is not only smart, it’s smarter.

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Blutip uses the intelligence inherent in the Industrial Internet of Things to produce smarter diesel fuel management platforms. Blutip SmartRFuel reduces fuel costs, lowers particulate emissions by up to 70%, and provides 10X more accurate data on fuel consumption. And our no risk, all reward approach to pricing means you pay nothing until you save money on fuel. If you’d like to discuss how Blutip can help you unlock productivity, lower costs, and reduce your carbon footprint, please contact Rick at 647-274-6695 or rfrise@blutipower.com.