Mexico’s Path to Mining 4.0By Paloma Duran | Thu, 07/29/2021 - 11:29
The Mexican mining sector, characterized for years as highly traditional and slow to change, is undergoing a modernization process called Mining 4.0 that is revolutionizing the industry. In Mexico, the revolution is advancing, but gradually. “Mining 4.0 is about technology, efficiency and sustainability. It is about using your resources in the best possible way. Mexico has been progressing gradually. Mining 4.0 is the new trend, so we will see more and better implementation of it in the coming years,” Jose Castro, Director of CLUMISIN, told MBN.
In the last few decades, mining investments have focused on growing technologically, with the most important advances having been made in the areas of safety, increasing productivity, caring for the environment and communities and using resources more efficiently. These advances are aligned with the goal of becoming more sustainable while improving the public’s perception of the industry, Gerencia de Riesgos y Seguros.
Its modernization is also in line with mining’s critical role in the transition to a carbon neutral world. According to the World Bank, clean energy will increase demand for minerals by nearly 500 percent by 2050. Increased demand brings many opportunities to the sector but also challenges. Mining faces highly cyclical market conditions, in addition to strict regulatory frameworks and rising production costs. Historically, these companies have consistently battled declines. While the sector is recovering from the most recent downturn, albeit at a slow pace, its full recovery is linked to optimizing maintenance costs and adopting new technologies, McKinsey reported. In other words, Mining 4.0.
The mining innovations expected from Mining 4.0 have the potential to improve operational efficiency by 70 percent. Through planned maintenance, mining companies can reduce between three and five times the cost of urgent repairs, reported MicKinsey. Similarly, Mining Global highlighted the benefits of the sector’s march toward the new landscape. “While change is always difficult, the promise of technology is welcome and required for mining companies. Through Mining 4.0, mining companies will be able to speed up production, reduce downtime and boost employee safety – three pillars that have challenged mining operations for years,” said Mining Global.
Mexico has modern mining that employs high technology to optimize processes and establish good management, social and environmental practices. In addition, it operates in accordance with the highest standards of social and labor responsibility. In 2019, the investment destined to research and technological development of the companies affiliated to CAMIMEX, which represents 90 percent of mining’s value, was US$35.2 million. In 2020, it had almost doubled to US$62.9 million.
Through new investments, the industry has improved its safety conditions, with the sector’s accident rate falling 24 percent compared to 2018. The challenges posed by COVID-19 further highlighted the need for greater integration of technology into operations and led to the evolution of the entire sector as the pandemic accelerated the adoption of digital technologies, artificial intelligence and analytics.
Although Mexico’s progress to Mining 4.0 has been slower compared to other countries, experts believe the country is on the right path. “I believe that the progression had been very slow but in the last three years, the industry has picked up the pace by starting to do things differently. The industry is beginning to look at connectivity, productivity, precision, QA/QC and financial savings as crucial elements of their operations. I believe that this will continue to be explored for many years,” said Diana Catarino, Manager for Mexico and Central America at IMDEX.
Catarino adds that around 35 percent of the industry is already in the smart mining wave, which is mainly due to the adoption of technologies from other countries. The Mexican market wants to see results and tends to look for solutions that have already been proven to work. “Mining companies cannot afford to install a piece of equipment that has not been proven to give good results,” Jorge Luis Cristerna Medina, Operations Manager at Multiled, told MBN.
Castro says that the transition to a more efficient and intelligent industry must be broad-based and involve all actors. CLUMISIN offers webinars, workshops and training to further drive these new innovations within the industry. “In Mexico, there are many different-sized companies and each one has a different stance on this issue. Some are resisting this change but it is just a matter of time before they turn to Mining 4.0 as this is the future of mining. “
What Is Mexico Missing?
While there is certainly steady progress toward Mining 4.0, there is also resistance based mainly on the perception that the incorporation of new technologies negatively impacts employment. S is somewhat true. The OECD estimates that 14 percent of jobs are at risk following the implementation of automation technologies, for example. In mining, the number increases to almost 40 percent. The COVID-19 crisis further increased the use of remote technologies, adding to the risk that automation represents mainly for workers with basic-level education. However, remote monitoring is also expected to create new jobs that require a higher level of skills, according to the OECD.
“The mining of the future will have fewer people. Technology is going to continue to get increasingly stronger and to do that we will need data and connectivity of systems on an enterprise level. In 20 to 30 years, with mines in the middle of nowhere, automation might be the only option left,” Anthony Fraser, Chief Marketing Officer of RPM Global, told MBN.
Another problem is the lack of support from the government and the public. “The sector constantly faces new challenges, which prevent it from growing. If the government believed in us, we could achieve our goals more easily and quickly,” Carlos Silva, CEO of Sanatacruz Silver, told MBN. He adds that Mexico is ready for Mining 4.0 and is close to fully implementing it; it just needs broader support from society and, especially, the authorities.
Regardless, the transformation is underway, said José Tovar, Community Relations at Alamos Gold, in an interview with MBN. “The great challenge is that our actions and measures must be compatible with the new challenges of the industry, as well as with the type of industry that we want to have in the future. Only then can we focus and achieve it."