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State of the Mining and Metals Industry in 2020

As the world is getting used to the new normal, mining and metals companies are trying to move on and keep their volumes up and their supply chains running. They need to do this just to keep their position or to try to gain a couple percentage points of their market sharea market share that may have shrunk in these difficult times.

Agile companies are best positioned to respond to the infrastructure growth our sector is expecting now that governments are investing over 1 trillion USD worldwide to keep people in jobs and stimulate both the local and global economy.

Metals and Mining Industry

Let’s have a closer look at the metals and mining industry. It has been clear during COVID-19 that companies with strong safety cultures can go longer and stronger. Also, companies that already provide regular training and have employees that are digitally savvy are just quicker to respond to key changes, as their staff is already open to change and can more naturally see and react to cause-and-effect scenarios.

Mining companies that invested heavily in technology and diversification of their staff are more resilient in these times. They are not just "lucky." The technology investment into the sector that they made after the GFC to perform at a lower cost per ton is now paying dividends.

Their recent technology investments allow remote monitoring and control of activities at a level that can keep their pit running with autonomous drilling and hauling, and their plants and logistics running with only a handful of people in the field. Even maintenance in many cases can be prepared and performed remotely or least prioritized based on having the right KPIs, alarm management, and an adjusted healthy maintenance mix to the revised OPEX and CAPEX scenarios different commodity producers are finding for themselves.

Integrated planning will point out constraints that will appear after expected or unexpected changes in their value chain.

Metals companies have also made some initial steps in safety, augmented reality, and mobility, but they have a longer way to go. Their automation levels are often a step behind the mining sector, challenged by large complex production areas that are less integrated by nature.

At the International Society of Automation (ISA), I have not seen metals clients push as hard for interoperability as their mining peers recently. I think this is going to change in the next couple years ahead.

Sustainability Pressure

Both mining and metals sectors are under additional pressure to respond to growing calls to increase their sustainability from many stakeholders like investors, governments, and local communities, as well as environmental and climate change activists and various lobby groups.

The sectors both make significant contributions to the global economy, but they have a hard time shaking off their image toward investors, the public, and even their own employees who were job-hopping to high-tech companies after the GFCdespite impressive employee diversity programs and technology investments.

If they want to get back to positive financial growth at levels pre-COVID, they cannot afford to lose staff during the next 12 to 18 months. 

To keep their top talent engaged, most companies are now progressing a wide portfolio of automation and sustainability initiatives. We also see sustainability initiatives like microgrid and decarbonization initiatives that help both uptime and power quality, and provide further independence from the grid.

This is a grid that has been destabilized during the last decade. Other industries and households have reacted to cost increases and changes in the market, and a large part of the global utilities sector has been privatized. Resilience is the theme of the year.

Public Trust

With these investments and additional cyber programs, the sector makes sure it does not lose the public trust whilst it does what it can to promote good citizenship within its local communities. Investments in water management, environmental management, and hydrogen are some of the more recent changes. These go beyond the more aesthetic initial projects that do not target base loads but are designed to show an intent to local stakeholders, such as putting solar cells on roofs of their facilities.

We only see clients’ true intent when they work tirelessly “behind the meter” to make many smaller changes everywhere in their operation, making their processes more efficient.

Another part of public trust is making sure that staff can go home safely. This is a reason why we see investment in integrated control rooms within Tier-2 companies. They are increasing safety and flexibility, knowing it will make them more competitive over timeand an easier take-over target. Above all, it provides them with access to new talent, as these control rooms are positioned in the hearts of our cities or at airports where networks are at their best and with minimal latency.

Trending Up

One thing is clear. Long-term trends in mining and metals are looking good, underpinned by significant global infrastructure investments post-COVID. These have reached 1 trillion USD just in the United States alone, with an additional 2 to 4 trillion USD for all other regions combined (based on various government references pointing to stimulus packages in the hundreds of billions of U.S. dollars for most larger countries).

We also see increased sustainability demands from other sectors like the electric vehicle industry that will raise the demand of many commodities to levels not seen before. The rate of production will have to go up. Grades are reducing steadily for precious metals like gold and platinum, as well as for other key commodities that enable global initiatives in sustainability like copper, lithium, cobalt, graphite, aluminum, or even nickel. (Nickel has finally has gained after a challenging period as it enables the storage of ever more energy aiming to stabilize our grid.)

With the growing demands and competitive pressure, the need for sustainable production is only increasing. We think this trend is going to continue for some time.

Circular Economy

We have one final point that we believe is relevant for our readership. Clients are looking into how to invest in a more circular value chain, and they need to overcome the technology and innovation challenges that come along with it.

The circular direction is happening relatively slowly. More recyclable materials are becoming available, and ingenuity is increasing in how we can re-use and process our various waste streams. The growing price of commodities and the increasing carbon tax is accelerating this direction, however, and circular processes are typically much less energy-intensive.

Also, the global community much better understands the long-term climate effects pushing companies and their governments to use our resources effectively. Until a balance is achieved, it is likely we will see the adjustments in brownfield environments first before seeing big step-changes in greenfield investments.

Even though glass and metals already find frequent re-use, there are going to be more elements like copper and battery metals we are going to have to re-use instead of producing from various precious ores. Increased volumes will make it more viable to do this whilst the grades readily and economically available on Earth will keep reducing. Our alignment with sustainability drivers will mean we will not disrupt nature and topsoil where we can prevent this.

As a consequence, underground mining may not have seen its best time yetcurrently good for less than 20% of global mining production, it might have the potential to double in the next couple of decades under growing pressure not to create large open pits.

Good Time to Be an Engineer

We believe that many technologies will play a key role going forward to make all of this happen without significant disruption. It is a good time to be a METS or data engineer. It is a good time to be a member of the ISA community. We thank you for your interest and contributions.

 

A Good Sample of the ISA Standards I Believe Are Worth Considering for the Metals and Mining Sector

COMPACTED LIST OF ISA STANDARDS, SOME NAMING SIMPLIFIED:

ISA-5.3-1983 - Graphic Symbols for Distributed Control/Shared Display Instrumentation, Logic, and Computer Systems

ISA-5.4-1991 - Instrument Loop Diagrams

ISA-5.5-1985 - Graphic Symbols for Process Displays

ISA-5.06.01-2007 - Functional Requirements Documentation for Control Software Applications

ISA-TR12.12.04-2011 - Electrical Equipment in a Class I, Division 2/Zone 2 Hazardous Location

ISA-TR12.13.02-1999 (R2013) - Investigation of Fire and Explosion Accidents in the Chemical, Mining, and Fuel-Related Industries - A Manual by Kuchta

ANSI/ISA-18.2-2016 - Management of Alarm Systems for the Process Industries

ISA-TR18.X - Alarm Philosophy

ISA-RP60.X - Control Center Design

ISA-RP74.01-1984 - Application and Installation of Continuous-Belt Weighbridge Scales

ISA-TR77.30.01-2015 - Power Plant Control System Dynamic Performance Test Methods and Procedures  

ISA-TR77.70.01-2010 (R2015) - Tracking and Reporting of Instrument and Control DataANSI/ISA-88.X – Batch Processes

ANSI/ISA-95.X - Enterprise-Control System Integration

ISA-TR99.00.01-2007 - Security Technologies for Industrial Automation and Control Systems

ISA-TR100.X Wireless Technology

ISA-RP105.00.01-2017 - Management of a Calibration Program for Industrial Automation and Control Systems

ISA-TR106.00.01-2013 - Procedure Automation for Continuous Process Operations - Models and Terminology

ISA-62443-1-1 (99.01.01)-2007 - Security for industrial automation and control systems Part 1: Terminology, concepts, and models

For the full list, please refer to:

https://www.isa.org/standards-and-publications/isa-standards/find-isa-standards-in-numerical-order/


This article originally appeared on LinkedIn. It is republished here with the permission of its author.

 

About the Author

Bas Mutsaers is the director of the ISA Mining and Metals Industries Division (MMID). He has been an ISA member since 2005. He is currently the global strategy, technology, and marketing lead for sustainable production at Schneider Electric.


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