Tag Archives: Paul Mitchell

Mine electrification hinged on reskilling, collaboration and mine design, EY says

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A recent survey of miners and mining original equipment manufacturers (OEMs) has shown that electrification of mines offers a lot more than lower carbon emissions and improved worker benefits.

The survey, commissioned by EY and conducted by the Sustainable Minerals Institute at The University of Queensland (Australia) and The Norman B. Keevil Institute of Mining Engineering at The University of British Columbia (Canada), deduced that reaping the full benefits of an electricity-powered mining future would require “reskilling, reaching out across sectors and rethinking the fundamentals of mine design”, EY said.

Paul Mitchell, EY Global Mining and Metals Leader, said the mining sector was on the verge of an electrification revolution, driven by significant cost reduction potential, lowered carbon emissions and improved worker health benefits.

“This is critically important, given the World Health Organisation has declared that diesel particulates now belong in the same deadly category as asbestos, arsenic and mustard gas,” he said.

Four key themes emerged from the survey, according to EY.

  • Electrified mines improve economics and strengthen licence to operate;
  • Collaboration will unlock better electrification solutions;
  • Mine design needs a rethink to build in optionality for future innovation, and;
  • Electrification needs different skills, and advances technology deployment.

EY explained these four in more detail:

“Demand for carbon reduction in the sector is inevitable, and electrification is one way to achieve it,” the company said. “Diesel engines cannot be replaced with carbon-generating electricity and therefore electrification needs to be accompanied with a move to renewable power.

“The survey finds that electrification reduces not only operational costs, but also up-front capital costs because it reduces the infrastructure needs of ventilation shafts in underground mines. More significantly, the reduction of diesel particulates results in improvement to worker health and safety.”

Partnerships and co-creation of solutions with OEMs, other mining companies and governments are needed to successfully integrate electrification in mines, according to EY.

“The survey finds that, in the case of electrification, miners are clear that they can’t go it alone. This is leading to a more open perspective around the role of suppliers as strategic partners, which expands the possibilities for miners to benefit through innovation, cost reduction and competitive advantage.”

Newmont Goldcorp has taken such an approach at its Borden gold project, in Ontario, Canada – partnering with Sandvik and MacLean Engineering on developing what it says will be the world’s first all-electric underground mine – while Nouveau Monde Graphite has built up a taskforce of its own to progress its plans for an all-electric open-pit graphite mine in Quebec, Canada.

In terms of mine design, decoupling mines from diesel is not an easy task. This is due to the diverse range of technical and financial challenges in mining various deposits.

EY said: “Getting full value out of electrification requires a thorough consideration and understanding of the technology road map, in parallel with the strategic plan for the mine. The survey highlights the need for a phased implementation with a flexible design that provides for technology improvements of the future.”

And, lastly, mine electrification will require different worker skills as it enables other advanced technologies, requiring less maintenance and human intervention, according to EY.

“Analysis of the survey findings reveals there will be increasing demand for data and digital literacy skills across all phases of the mining value chain, as the human-to-machine interface evolves and becomes more prevalent,” the company said. “In developing economies, this means challenging the assumption that a mine provides employment only for people doing physical labour.”

Mitchell added: “It is important to start thinking about building agility into mine design to leverage the potential benefits in asset flexibility, lower ventilation requirements and the human footprint.

“The future of electrification in mines requires a paradigm shift in thinking – from existing known and proven technologies to new emerging technologies. We must realise that the challenges of the sector can be solved faster by collaboration – and a robust strategy, underpinned by gaining the right capabilities and an agile approach, is critical.”

Annual EY mining business risks report ranks licence to operate at top

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More than half (54%) of global mining companies rank licence to operate (LTO) as the biggest risk to their business, according to the 11th annual EY Top 10 business risks facing mining and metals in 2019-2020 report. The survey of more than 250 global mining executives sees LTO climb six places to first position amid rising nationalism, changing community perceptions of mining operations and the impact of automation on the workforce.

With the sector seeking to redefine its image as a sustainable and responsible source of the world’s minerals, the report cites rising societal expectations, the impact of advancing technology on stakeholders and a need for greater collaboration with all stakeholder groups as drivers for escalating risk.

Paul Mitchell, EY Global Mining & Metals Advisory Leader, says:  “Licence to operate has evolved beyond the narrow focus of societal and environmental issues. There are now increasing expectations of shared value outcomes from mining projects. Any misstep can impact the ability to access capital or even result in a complete loss of license – particularly in light of the increased use of social media, which makes potentially negative publicity more globally visible than ever. Miners need to take responsibility for helping to overhaul the image of the industry by communicating the value they are adding to local communities and economies, and by working to ensure that key stakeholders are taken along on the journey.”

Last year’s top risk, “Digital effectiveness,” falls one position to second place in the 2019-2020 ranking. The implementation of digital remains a key challenge to the sector. While miners are making significant strides in applying digital solutions to single issues, the findings indicate that they are failing to do so across the whole value chain. Indeed, 72% of respondents say they are investing 5% or less of their budgets on digital. Meanwhile, a recent EY poll of more than 600 mining and metals executives, found that 37% of management have little or no knowledge of the digital landscape.

Mitchell says: “The stark reality is that digital is the key to achieving sustainable productivity and margin improvement for mining businesses. It is, therefore, not the time to stand still in an age of turbocharged business transformation that is largely driven by digital. To respond to disruption across the sector, businesses need to adopt an end-to-end digital program.”

Disruption is a new entrant to the report ranking, entering at eighth position. With automation already disrupting workforces, and 31% of respondents stating that technology companies have the potential to play a more dominate role in the sector, disruption is pervasive throughout this year’s top 10 risks.

Mitchell says: “We are now in an era of constant disruption, and it is coming from unexpected places. Instead of seeing it as a threat, mining businesses should see it as a great opportunity to innovate, collaborate, evolve and thrive. If dominant players respond slowly or ineffectively to sector and external changes, market leadership could be lost as newer participants such as technology companies and sovereign states make inroads.”