The ASIA Miner's Kathryn Edwards speaks with the president and CEO of Canadian-based Dundee Precious Metals, Rick Howes, about technology enabling greater operational excellence across its mines.
What challenges exist for mining operations looking to improve productivity and efficiency?
THE industry must continue to look for ways to innovate and become more productive, efficient and effective. There are fewer rich deposits and a general trend towards declining grades and deeper, more remote and difficult deposits. In addition, costs continue to rise and stakeholders' expectations around sustainable development and a sharing of the benefits of these projects are also increasing.
Often when commodity prices are at their peak there is little interest in focusing on cost and productivity improvements as most companies are quite profitable, however, when cycles return to lower commodity prices and companies are threatened, it is only then that many start to think about cutting costs. The industry needs a more consistent and sustained approach to innovation and improvement of operations.
Larger companies tend to drive their own research and development efforts into innovation primarily to obtain competitive advantage but smaller companies can still innovate and compete by collaborating and forming partnerships with innovative industry suppliers/partners from within and outside the mining industry.
There is no shortage of innovative ideas and opportunities for the industry to explore, however the industry often lacks the leadership, vision and sustained commitment required to see these ideas through to implementation. All change involves taking some risks, and I believe the industry needs to be less conservative and more aggressive in applying new technologies in order to reinvent itself and generate the kinds of returns shareholders expect over the long run.
How has technology become an essential enabler of improving a mine's operational excellence?
Innovation in the IT industry has changed our own lives and impacted all industries dramatically in the last 25 years, and will continue to do so. Everything from automation and robotics to improved information gathering and sharing, and the introduction of analytics and business intelligence is becoming commonplace in most businesses.
Most recently, the impact of low-cost wireless IP communications has been an enabler for open pit and now underground mines. This allows for the ability to have low-cost voice, video and data transmission over computer networks that can significantly change the way most mines operate. The key is not just to implement technology for technology's sake but to look at reinventing how business processes are being done using technology.
Another enabler has been development of radio frequency identification tagging technology and GPS technology that allows industries like ours to easily locate people, equipment and just about anything else accurate to within several metres and better. This has made operations safer and enhanced our ability to monitor in real-time as opposed to reporting on a shift-by-shift basis.
Going one step further has been the automation of many mining tasks to improve productivity and efficiency. Everything from drilling, blasting, loading and hauling, crushing and conveying, and more can be automated. The main challenge remaining to introduce these technologies is to make sure they are fail-safe and allow for the safety of people in the area.
Could you explain your vision for Dundee Precious Metals (DPM), its implementation and how it helped transform operational excellence?
Prior to coming to DPM I had spent almost 30 years in the industry throughout Canada looking for ways to innovate and improve operations. My vision had always been to transform underground mines to run more like 'rock factories' and eliminate much of the waste we see inherent in most underground mines by introducing real-time monitoring and management.
When we acquired Chelopech Mine in Bulgaria in 2004 it was an old Soviet-era underground copper-gold mine that had never really performed well. We saw the potential to significantly increase production and lower unit costs, transforming it into a modern, efficient operation through investments in a number of more modern methods and technologies, including a real-time production management system. We coined the phrase 'taking the lid off the mine', to describe the visualization of the mine in real-time in our new operations control room.
Much had to be done to introduce the new ideas and train the workforce for the changes we wanted to implement. We formed a partnership with a number of key strategic partners in the areas of technology and mining to develop this concept into a real working system. Everyone contributed their expertise and technology solutions and we integrated the solutions together into one system.
The project started in 2010 and was up and running in 2012 through the hard work of all participants on the project team. Even today we are continuing to evolve and improve this system. Through introduction of this concept and a number of other innovative changes, we have more than doubled production and cut unit costs by almost 50%.
We continue to look for ways to innovate and improve our operations. We continue to strive to be innovation leaders in the industry and operate world-class mines.
What advice do you have for operations looking to work smarter to ensure they deliver long-term productivity gains?
My advice is to be willing to take some risks and be more aggressive on innovations. There are many good ideas and possibilities to consider. Be prepared to make a long-term commitment and form strategic partnerships to share the load and the risks of change efforts. We are a good example of a small company that successfully innovated in this way - it goes to show you do not have to be big to be innovative.