Mining Value Chain

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Achieving Operational Excellence in the Mining Value Chain
by PETER ORR and DAVID WHITTLE

Achieving Operational Excellence in the Mining Value Chain by Senior Product Manager

PETER ORR and

DAVID WHITTLE
VP Marketing Gemcom Software International

Abstract This paper examines the application of advanced information technologies to help the challenge of achieving high operational performance in the upstream processes of the value chain. The authors describe the reasons why business process improvement (BPI) methodologies adopted from other industries increase profitability and efficiency in the downstream processes, but not in the upstream processes. A case study that discusses the implementation of an integrated mine-to-mill information technology solution at Debswana’s Jwaneng Mine is provided. This case includes evidence that looking at the overall way mining activities fit together and how information flows between activities is necessary for increasing mine profitability and productivity

Introduction With the increasing globalization of the mining industry, the basis of competition is shifting. Concentration of ownership of reserves means that global mining companies are differentiated less by their portfolio of mining properties than by the effectiveness that they exploit those resources. Mining is becoming a business in which operational excellence is the primary basis of competitive advantage. In the current cycle of increasing producer prices, mining executives face challenges of simultaneously maximizing production while controlling unit operating costs. In an industry that has lagged others in the adoption of IT solutions, many in the mining industry are now seeking advance information technologies to help the challenge of achieving operational excellence.

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The Unique Challenges of Mining Mining has also lagged other industries, in the adoption of Business Process Improvement (BPI) methodologies. But in the past five years, this has changed. Large global mining companies, almost without exception, now routinely report to shareholders progress on BPI initiatives such as Six Sigma and Balanced Scorecard Programs. Unfortunately, these BPI programs are not specific to mining and require innovative approaches. The variances which occur in the upstream processes (exploration, planning, scheduling, drilling blasting, loading and hauling rock) are particularly difficult to monitor and manage. It is here; in the mining phase of the value chain that companies are looking to advanced IT solutions to improve mining processes by bringing information about disparate activities into a single integrated view.

The solution lies in the integration of business processes Mining industry leaders are increasingly using data warehousing and business intelligence technology to give mining management the capability to model, monitor and analyze the entire value stream, including: § § § § Mine Operations Mine Planning Geology Ore Control

The Debswana Diamond Company is a recent case in point.

Case Study: IT Solutions at Debswana’s Jwaneng Diamond Mine The Jwaneng Mine operated by the Debswana Diamond Company recently completed the first phase of a business process improvement program, enabled by process and integrated mine-to-mill information technology solution, provided by Gemcom Software International. The task: Increase the mine profitability and productivity through the use of process improvement supported by Information Technology (IT). In order to achieve this objective the mining company recognised that it had to be able to monitor, measure, manage and reconcile a broad range of interconnected activities in the mining value chain. By doing so, Jwaneng would be able to make timely and effective decisions. Phase 1 included business process review; documentation of existing processes; gap and overlap analysis and the planning and implementation of new business process architecture. Phase 1 of the...
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