To what extent has the pandemic been a catalyst for technological adoption in mining?

The first thing that stands out is the adoption of digital and tele-remote work. The industry has been a slow adopter of remote and flexible work environments, in part, due to work culture. Historically, the culture has favoured face-to-face, “human touch” interactions between stakeholders. However, the arrival of Covid-19 has challenged that approach. The environment has accelerated quickly with a move to distributed workforces, but also the adoption of technology that enables those workforces to work effectively.

Digital transformation has become a recurring theme in the conversations we have been having with mining executives. For example, we have noticed that most companies are now less reluctant to adopt digitally enabled platforms for supply chain — with an uptick in demand for things like human resource information systems for payroll and employee management. This is a major shift, compared to the industry adoption rate in recent years.

Ongoing travel restrictions also pose challenges to physical presence in operations. As a result, the pandemic has created an opportunity to rethink operating models. Companies are further exploring capabilities to reduce the gaps between physical and digital. We hear about more discussions and appetite in equipping key assets and activities with the right technologies that would enable visibility, in terms of monitoring performance, and even remote operations when the context is appropriate.  

Decarbonization and Green Agenda routinely land near the top of EY’s opportunities and risks list. How does this influence the actions of mining companies?

While prevalent before, the ESG discussion has really morphed since the beginning of 2020. Covid-19 forced the world to shut down a lot of its industrial production, and social media played an important role in driving the discussion on how the environment would fare better in a reduced carbon footprint world. Whether a consequence or just by coincidence, we’re witnessing a renewed push by some shareholders for mining to embrace ESG principles and to act on becoming less energy intensive, more environmental-friendly and more community-supportive. In speaking with industry executives, we are learning that although productivity and capital allocations are still on the agenda, more and more pressing questions and demands have risen about ESG — including health and safety performance, sustainable support from communities, environmental protection, tailings, energy sources and energy use.

Our top 10 business risks and opportunities report confirms that mining and metals executives would agree that a focus on ESG and decarbonization are critical to sustain a competitive advantage and build stronger license to operate. 

Can you speak to the role that metals will play in the global transition toward renewable energy?

Every industrial revolution or civilizational transformation has been somewhat anchored on mining and metals: The Stone, Bronze and Iron ages, gold rushes, coal in the first industrial revolution, silicon for processors and, of course, copper for economic development today. With the transition to renewable energy being played out, the world is seeking transition metals — including copper, aluminium, nickel, cobalt and lithium. The difference between today and past industrial revolutions is that today’s consumers have a heightened awareness of, or the strong desire to know, where and how mining sources the materials. Miners must be cognizant of the growing trend toward ethical sourcing. It’s not impossible that sourcing becomes a key differentiator that would drive premium pricing; in which case, a de-commoditizing era might open up for what we call “commodities” today.

Many of the most esteemed voices in the field of AI research have come out of University of Toronto. How are these breakthroughs being applied and adopted by mining companies?

A major hurdle mining and metals companies face in effectively adopting AI and other emerging technologies is culture and education. While many companies understand that digital transformation is critical to sustainable productivity and margin improvements, they’re strapped with the challenge of getting employees to understand and embrace the upside of digital ways of working.

If we take exploration, for example, there’s a lot of previously collected geological, geochemical and geophysical data available that can be leveraged to support the advanced definition of drilling targets. For an industry that prides itself in good geosciences, geological targets and rich orebodies, exploration is definitely a good candidate for machine learning. The industry needs to continue to build use cases around the adoption of machine learning in exploration to help address the hesitations and cultural barriers that exist today.

Companies cannot dismiss the importance of having a strong culture to foster innovation and technology adoption among all employees — from the boardroom to the front lines. Luckily, as more employees work remotely and use digital tools to access information, the culture shift is already starting to take place. Companies now will need to continue the momentum forward to drive a digital-centric culture. Once culture and education gaps are overcome, AI can be a tool that has the potential to be transformational for the industry.

How will EY continue to assist mining companies in navigating the challenges 2021 will bring?

Post-Covid-19 investments in infrastructure, combined with demand to sustain the energy transition, will drive significant growth in the mining and metals sector over the next three to five years.

At EY, we help our clients secure new opportunities and address challenges with our Now, Next and Beyond framework. This three-horizon framework can serve as a comprehensive guide for enterprise-wide, digitally enabled business transformation. Success, however, depends on the ability to think, operate and plan in three dimensions simultaneously, not separately.

Our focus is on helping companies manage the disruption caused by Covid-19, while actively planning for transformation and new business models that will drive success in the next and beyond. With our new EY Americas Mining and Metals Centre of Excellence, in collaboration with NORCAT, we can offer companies across North and South America access to cutting-edge services and innovation-led solutions that meet the most pressing needs of mining and metals businesses, today and in the future.