The impact of cloud computing on the mining industry

Mining companies face many severe challenges. By integrating operations and management into the cloud, mining companies stand to become safer, more productive, and more sustainable – three axes upon which excellence is required for future competitive success.

The matrix below details the areas in cloud computing where mining companies should focus their time and resources. In cost and quality, the superior option for mining companies are public cloud environments provided by major technology players. Because of connectivity issues in remote locations, establishing hybrid capabilities upstream in the value chain will be necessary.

The flexible, high-grade storage and computing power available as infrastructure-as-a-service (IaaS) is valuable across the mining value chain. Whether platform-as-a-service (PaaS) and software-as-a-service (SaaS) are valuable depends on the specific functions companies want to outsource, and whether appropriate platforms and applications are available.

Cloud management and brokerage should be primarily left to the cloud providers, although for mining companies willing to embrace multi-cloud architectures, cloud brokerage may be an area to start exploring.

Mediating parties can be enlisted as integrators or managers to arrange the solution between the miner and the cloud provider if necessary, but large mining companies could expect the cloud provider to offer a relationship manager to handle these arrangements.

An enterprise’s realisation of cloud mining must occur gradually. First, the mines must be outfitted with sensors and remote controls to obtain data and execute instructions. At this stage, a cloud platform can integrate a production overview and perform analysis to inform mine management.

Second, all the connected mines and operations must be integrated into one single management platform. Now there is a far larger wealth of information to draw on, and collaboration between different operational units can be improved. Finally, partnered third parties must integrate their operations so that an ecosystem can flourish.

The fuller the integration of cloud, the greater the benefits. Companies should aim for vertical integration from field to boardroom and horizontal integration from engineering design to operations. The mining industry has some advantages here.

Most companies have worked with automation and digital technology for years, so will not have to start from scratch. Connectivity is the main obstacle to cloud installation. Mines are often in remote areas without a sufficiently strong or reliable internet connection to relay data to a remote-control centre. Hybrid cloud solutions are necessary to navigate this difficulty.

Edge capabilities allow the collection and processing of data, which can then be delivered to the cloud asynchronously – when available or at scheduled intervals. The analysis and decision-making can be performed on the cloud and sent back to the mine. This option is the best of both worlds.

A mine harvests the superior insight available on the cloud, but is not at risk of downtime when the connection is limited since the decisions derived from those insights are stored locally. In coming years, satellite connectivity products like Space X’s Starlink and 5G private network solutions may dissolve the connection problem in remote areas. However, hybrid cloud is the best solution for now.

Cloud can mitigate the risk of environmental hazards harming workers. Sensors and data analysis can identify the risk of disaster events like structural collapse or dam failure far enough in advance to evacuate all personnel.

They do this by monitoring data like piezometric pressure, pond elevation, and inclinometer readings. Continuous dangers like dust, excessive noise, UV rays, and chemical exposure can also be monitored and managed.

Companies can monitor worker health to anticipate stress and fatigue. In a connected mine, personnel health markers can be captured with wearable Internet of Things (IoT) equipment and used to make decisions that keep workers in optimal conditions.

Rio Tinto incorporated the Fatigue Science Readiband, which sent the sleep data of employees to the cloud. This helped Rio Tinto ensure no worker operated heavy machinery after being awake for 14 hours.

Automation improves safety, and cloud enables automation. Humans removed from the task site cannot be harmed. Cloud-connected sensors can relay data to cloud-based analytics. So far, cloud has been particularly helpful in automating drilling equipment and haulage fleets. Caterpillar had 70,000 industrial equipment units connected to the cloud in 2018, and customer feedback reported that safety-related incidents had halved.

 A content management system can be established on the cloud, giving all employees access to relevant safety documents, such as operating procedures and internal policies.

Better decisions are made when there is better data to inform them, and better tools to analyse that data are available. Cloud establishes visibility throughout production, operations, and sales. AI analytics, digital twin simulations, high performance computing (HPC), and other cloud capabilities enable deep insights.

Decisions made at each individual mine can draw on the information gained across all other mines. Geophysical data – including 3D terrain imagery, geopositioning, mapping, pit slope, tailings dam, and survey data – improves exploration. Extraction is automated. Processes can be optimised to maximise yield and minimise waste volumes with stockpile data, weather analytics, and gas emission detection.

Supply chain and transport security and efficiency can be monitored and improved. Marketing and sales programs can be designed and adjusted with a closer understanding of demand.

Evolution Mining increased the average payload of trucks at its Mungari mine by 4% with the introduction of a cloud monitoring system. Komatsu, an equipment vendor, partnered with Cloudera and Microsoft Azure to create an industrial cloud analytics platform to monitor all equipment types.

Teck Resources collaborated with Pythian to build a machine learning predictive maintenance application on Google Cloud, estimated to save between $2m and $4m annually at a single mining site. Sandvik’s Optimine process management solution, developed on IBM Cloud, has reduced user mine production downtime by as much as 30% and reduced cost-per-ton ore production by as much as 50%.

Several benefits are associated with the centralisation of operational functions from individual mines to remote operations centres.

Employment cost falls with on-site team requirements because fewer employees are required to operate mines remotely. For example, BHP runs its integrated remote operations centre from Perth, which allows it to keep operations going 24/7, some 1,500 to 2,000 km away from the physical assets.

Automation, where cloud enables it, improves the efficiency of both physical operations and digital processes. Storage, transport, and drilling systems achieve higher and more accurate performance and more efficient resource consumption when automated rather than manned. They also incur much less wear and tear. Digital business processes see similar results: higher performance in less time. In both cases, money is saved on employee wages.

A mining company might generate petabytes of data at different sites but never combine them. With cloud, all employees across an entire organisation can communicate and collaborate. All the mines belonging to a company log their data and reports in the same systems, which the central office also uses.

There is no difficulty or delay in central office workers accessing the data they need to make protocol decisions or in communicating those decisions to mine workers. The company becomes faster and more accurate.

Much broader information and idea sharing is possible. Microsoft offers social innovation solutions that encourage innovation by engaging and connecting workers across organisations and geographies. ERP software stores information that can be accessed whenever required.

The above applies to all aspects of a mining company's business, but certain aspects stand to see particular gains. Institutional knowledge is better protected against loss.

The aging workforce and outdated information storage risk the loss of useful knowledge. Cloud knowledge management systems establish repositories for storing and distributing such information. Before retirement, the most experienced and successful workers can contribute to central best practice guides that the whole organisation can see.

Equipment uptime can be improved. Analytics on health data delivered by cloud-connected sensors on equipment (e.g. mills and conveyors) can alert operators to impending breakdowns and errors before they occur, and suggest the measures that must be taken to prevent them. Digital twin equipment models offer new insights into optimum use practices and different use scenarios.

Mining companies with cloud operations can communicate more effectively with third-party collaborators in their supply and industrial chains, supporting more robust business ecosystems and greater productivity.

Miners can display their production and operation status in real-time. All partners can see the data necessary to inform their collaborative roles, whether that role is equipment maintenance, mine planning, resource transport, supervision, consultation, or research.

Cloud servers offer a superior solution to on-site or company-owned ones. Cloud providers are large companies with millions of clients. Having so much more scale, skill, and specialisation than miners, they can offer a more sophisticated product for less money.

Cloud servers are faster, more sophisticated, easier to use, less risky, more reliable, and cheaper. Rio Tinto vacated four data centres and cut IT costs by 20% when it moved to Microsoft Azure. Mineman reduced IT infrastructure costs by 60% and data recovery time by 50% when it moved to AWS.

Resources are flexible and elastic: user companies can employ as much storage and computing power as needed. There is no under or overprovision on pay-as-you-use models, so there is no server incapacity or wasteful idleness. Companies always pay the minimum necessary amount. This benefit becomes more pronounced at scale.

Each internally managed server requires new storage, computational power, cybersecurity, and staff for management. An externally provided server can be acquired through a simple license upgrade, or even automatically. No large up-front investments are required, and new services and applications can be added in an instant. Business units can be integrated into the cloud with minimal hassle.

In the future, as the quantities of data necessary to compete increase significantly across the industry, companies will have to manage the collection and storage of gigabytes of data each day from sensors and equipment.

Servers provided by large specialist companies have better uptime, backups, power, and security. Designing, installing, and maintaining this internally would be more expensive for a mining company.

Cybersecurity on cloud servers provided by the major vendors is of the highest standard. For example, AWS has attained the highest security rating possible in the industry, and Hitachi Data Systems employs National Security Agency (NSA)- approved encryption methods.

Cloud migration minimises the risk of data breach or loss. Mining companies often do not have the budget, plan, or skills to keep data as secure as cloud providers. A ransomware attack cost Norsk Hydro, a Norwegian aluminium and renewable mining company, more than $50m. Data is also less vulnerable to damage from vandals or weather events; data on the cloud is stored at several locations to ensure security.

The occasional engagement of HPC is possible. Resource-intensive programs like digital twins and continuous reservoir modeling would require dedicated on-site servers without cloud; with cloud, such servers can be enlisted when needed, then disengaged.

Processes optimised or automated via cloud technology use resources such as energy and water more efficiently. The footprint of on-site data centres and servers (using electricity, air conditioning) is eliminated as their functions are outsourced to the cloud. Better visibility across the value chain makes it easier to identify and capture potential new efficiencies in resource consumption.

Environmental data is more easily accessible, so decisions can be more appropriate. Reports and best practices on resource management can be made accessible to all employees on a cloud portal.

Relocating on-site jobs to remote operations centres mean operators can live in cities and participate more fully in their family and social lives. Such benefits are regarded as more beneficial to worker wellbeing than even the most generous amenities available on a remote site.

The better transparency, traceability, and visibility available with cloud enables companies to comply with regulations and validate their doing so more easily. Mining companies must comply with many regulatory frameworks, including the EU Emission Trading Scheme, the Australian Emission Trading Scheme, and various federal and national regulations.