Yesterday (04/30/19) an interesting article was published in Vedomosti about the digitization experience of the largest Russian company producing precious and non-ferrous metals. This topic is consonant with the current global agenda and our expertise in the implementation of the Digital Field project in the oil industry. We give the whole article and the comment of our partner on the topic.
Nornickel will save millions of dollars with digital technology. Digital transformation has an increasing impact on mining companies.
In the period from 2019 to 2022, the capital costs of Nornickel (34.6% owned by Interros structures of Vladimir Potanin) will be about $ 10.5–11.5 billion, it follows from the presentation of the company's long-term strategy. Excluding environmental investments and growth projects, the company's capital expenditures for four years will be $ 6.5–7.5 billion, 3% of which will be used to introduce information technologies, i.e., about $ 200 million. The company expects to get more significant effect of these investments: annual EBITDA growth of $ 30–40 million, indicated in the document. In 2018, EBITDA was $ 6.2 billion.
Digitization is not an end in itself, it is an additional efficiency tool that managers can use to implement the efficiency improvement program, said Sergey Malyshev to Vedomosti, the Senior Vice President and Chief Financial Officer of Nornickel. Digitization is carried out in several sectors - in the accounting, in the service of accreditation of suppliers and contractors, in the field of labor protection and industrial safety, etc.
The technology of big data analysis and machine vision has the greatest potential for application at industrial facilities, Malyshev said. For example, at Talnakhsky concentrating plant (Krasnoyarsk Territory), the company was able to optimize the flotation process (one of the stages of ore processing) by creating a digital prompter. The line processes huge amounts of raw materials, and the prompter improves the efficiency of metal extraction. We have already managed to increase extraction by 800 tons of nickel equivalent and earn an additional $ 10 million per year in only one flotation site, Malyshev reports. The digital prompter has passed the stage of pilot operation and will be introduced at other concentrating plants of the company.
The project for the implementation of the anode closure detection system in the electrolysis shop of the Copper Plant (Transpolar Division) is in the advanced stage, he continues. During electrolysis, growths appear on the sheets, and if they are not removed, a short circuit may occur, which significantly slows down the production process. A system has been developed that includes a dynamic thermal imager and an image processing algorithm therefor, which allows you to track these processes at an earlier stage. “This has the effect of tens of thousands of dollars in savings,” Malyshev said. Another process where machine vision turned out to be more efficient than human vision is to identify the ore-contaminating elements on the conveyor before they enter the crusher. “Metal elements can cause the crusher to stop temporarily, and machine vision avoids such stops. A person may miss a metal element in the ore, but a machine will not”, he added.
Industry leaders have made a significant step forward in understanding what digitization is and how it affects all aspects of the business, including the company's production and commercial processes, argues Olga Linde, partner at Bain & Company. “Introduction of digital solutions is beginning to bring significant results for companies in the industry. For example, predictive repairs increase equipment reliability and can lead to overall savings of 10–20%, ”she continues.
But the introduction of digital technologies is not a replacement for system work to improve the company's operating processes, but a tool that allows you to speed up or increase the effect of this work, Linde emphasizes.
“Digitization is a logical continuation of the development initiatives of companies to automate their business,” Bright Managing Partner Denis Abakumov agreed. - This is the next stage of development of the industry, which complements the human intellect, becomes its assistant in solving everyday tasks”.
Digital transformation will provide companies in the industry with an increase in efficiency of 15–20% over a period of 5–7 years by optimizing operating activities and maintaining equipment, said Jörg Dorler, executive director of the consulting department at Deloitte. “The key success factors of digital transformation are quick selection and implementation of the right technologies, as well as a flexible corporate culture able to adapt to such changes,” the expert says. Although the dynamics of commodity markets will remain a key indicator affecting industry players, digitization will be an increasingly important factor in the value of companies, Dorler concludes.
The effect of the introduction of new technologies is not immediately visible, Abakumov emphasizes, their introduction requires the mobilization of internal and external resources of companies. “But the long-term perspective of the direction is huge,” he concludes.