How SAP Technology is Transforming the Efficiency and Sustainability of Chile's Mining Industry
How does mining for natural resources fit into our eco-conscious future as we work to protect the environment for future generations? Technology is developing to create a balance between benefiting from natural resources today and preserving their intrinsic value for tomorrow.
One of the countries that benefits significantly from mining natural resources is Chile as the natural resources sector represents 17% of GDP and mining is directly responsible for 15%. There are no signs of this shifting. For example, Chile is an international leader in the production of lithium, so much so that the government is drawing up national policies for its development.
Therefore, mining for natural resources is a central economic pillar that needs to be adapted to suit modern circumstances. Technology can play a major role in the modernization of Chile's mining industry.
The Challenges of Modern-Day Mining
While being a pillar of Chile's economic development, the mining industry does face various challenges with the potential to disrupt its viability and profitability if appropriate adaptations are not made.
Sustainability and resource preservation
Firstly, the industry must operate with environmental sustainability to meet societal demands and regulatory pressures to reduce the environmental impact of mining. Beyond working with efficiency, mining companies include responsible waste management, water conservation, and pollution mitigation in their day-to-day operations. Water conservation is an area of particular concern as it's a resource in serious scarcity, impacting multiple industries and communities, especially in arid areas such as northern Chile.
Community considerations and legal compliance
The logistical challenge of managing scarce water supplies is not the only way mining operations can negatively impact local communities. The balancing of economic benefits with the social well-being and sustainable development of these communities is critical to the mining industry's survival in modern times. As a result of the potential for environmental and social damage, government regulation and policies are tightening. So companies must act with infallible compliance to prove they can operate with minimal negative effects.Financial viability and employee concerns
Having managed the environmental, social, and governmental concerns, mining operations can be further held back by the volatile pricing of minerals internationally, significantly impacting financial viability. Maintaining the strong workforce needed to extract minerals in the first place can also be a challenge. To retain highly valuable talent, companies should look at their offerings such as attractive contracts, comfortable workplace conditions, and ongoing training. The safety of mining teams continues to be a concern even with the introduction of new technologies. Vigilant safety procedures can never be overlooked.
With such a multitude of concerns impacting the future of Chile's mining industry, a radical transformation is needed to stay ahead and forge a bright future for the use of natural resources. The technology is available to enable such a transformation.
The Technical Transformation of Mining Operations
By digitalizing the mining process, companies can achieve efficiency and continue to optimize for sustainability, profitability, and safety. There are various technologies involved in the digitalization process.
The Tools of the Trade
Autonomous machinery and robotics can enhance operational efficiency and safety by completing repetitive and/or dangerous tasks. For example, drones could be used for asset inspection and mapping of even difficult-to-reach mining areas. For ongoing monitoring, real-time data can be collected to inform responsive decision-making via IoT sensors and devices on all processing equipment. Augmented Reality (AR) and Virtual Reality (VR) are both tools that can be used in the mining industry. They could be integrated into training and planning as they can accurately visualize various scenarios to be explored.
The Application of Data
Round-the-clock remote monitoring of mining operations supports safety, especially when security mechanisms are set up to immediately respond to any risks and avoid accidents. Such granular data collection allows for advanced processing which reveals insightful patterns even from large datasets. These patterns can be used for more accurate planning which avoids issues and optimizes operations.
Artificial intelligence and machine learning can be applied to data analytics to detect issues and formulate solutions without much human intervention. For example, systems can be implemented to manage energy consumption, optimizing for efficiency and utilizing renewable energy when possible. Blockchain and Distributed Ledger Technology (DLT) could allow for the reporting of sustainability KPIs, meeting the need to create a traceable mineral supply chain, while minimizing security vulnerabilities where sensitive data could be compromised.
As various technologies hold the potential to advance mining operations to meet consumer, societal, governmental and business demands, mining companies are in need of an effective way to leverage this technology. SAP has the solution.
SAP's Solutions to Better Mining Management
As a global provider of ERP and other business software and solutions, SAP has a range of modules and depth of capabilities to help mining companies thrive beyond the challenges they face.
Supply chain management
SAP has intentionally designed technology to support the mining and supply chain. It has the power to connect operations to the rest of the business to improve connectivity and therefore responsiveness. From there, other technologies can be introduced to improve processes such as predictive maintenance to ensure maximum efficiency and minimize disruption.
One particularly pertinent SAP application is Mining Operations Management. This optimizes mining operations for efficiency and productivity by offering capabilities in production planning and scheduling, inventory management, equipment tracking, and more. This pairs well with the Maintenance and Reliability Management application as it improves asset management, increases the availability of critical equipment and machinery, and therefore stabilizes operations. The Supply Chain Management (SCM) module is perfect for coordinating the extraction, processing, and transportation of minerals.
Safety and sustainability
For mining processes to be responsible there needs to be an element of accountability. To be able to accurately report their impact on the environment and community around their operations, mining companies need an advanced data management system that optimizes data collection for real-time holistic sustainability reporting in accordance with social and legal issues. SAP provides such infrastructure on a wide scale and with full customization.
Effective ESG management can be found in SAP's Sustainability Control Tower solution. This module makes ESG reporting objective-led for continual improvement as standard in all processes. It reports real-time and accurate data, providing granular data visibility instead of resorting to averages. The reports are designed to be suitable for review by regulatory bodies as they include all common reporting frameworks.
There are additional modules that complement safety and sustainability. SAP's Sustainability and Corporate Social Responsibility (CSR) module provides all the necessary capabilities for managing sustainability and corporate social responsibility. The Occupational Health and Safety Management application is a reliable system for maintaining the safety of all employees. The Risk Management and Compliance (GRC) module combines the two concerns for effective operational risk management in line with security and regulatory requirements.
Business Intelligence
Beyond optimizing operations for both efficiency and sustainability, mining companies can use SAP technology to focus on customer needs. For example, by integrating sales and operations, companies can enhance their understanding of customer needs and align customer demands with plans for mining production, synching the two ends of the business. Analytics and Business Intelligence (BI) is the module users tap into for valuable data insights that support business success by enabling informed decision-making.
Where to start with SAP for Mining Modernization
NTT DATA provides the established strategy mining companies need to succeed in today's market by tapping into a wealth of knowledge on the industrial sector and specialist expertise of SAP technology. Starting with the base of the SAP S/4HANA platform, we help mining companies create fit-for-purpose solutions that cover business process management, resource planning, and operations optimization as specific to the mining industry and their individual enterprise.
We understand the need for sustainability in the mining industry and have a strategy to embed sustainability in the business DNA of our clients while prioritizing profitability. As an innovation-driven and efficiency-focused company, we are working to integrate emerging technologies into our client's systems such as the IoT, AI, ML, and AR to provide the highest possible value.
Director, SAP & Enterprise Solutions SAP Industry lead