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  1. Solomon Wisdom
  2. Sherlock Holmes
  3. Extractive Industries
  4. Tuesday, 22 January 2019

Digital Transformation in the Mining Industry – from Comparative to Competitive Advantage

Category image miningThere are some things that you can change in a mining operation and somethings that you cannot. For example you can change how efficiently you operate the mining, beneficiation and transport operations, but you cannot change the grade of your ore or the size or location of your deposit. The latter gives you a comparative advantage but the former gives you a competitive advantage. It was difficult if not impossible to use your competitive advantage to overcome a comparative disadvantage, even with huge economies of scale – since most of your competitors were huge too. 

Enter, Digital Transformation. Sensors, data, analytics, integration, AI and a host of other emerging technologies are transforming mining to a point where the competitive advantage yielded by Digital Transformation is starting to encroach upon comparative advantage and at the margin allowing some companies to compensate for comparative disadvantage with Digital Transformation sufficiently to make up for unattractive grade, reserves and location.

The implications for the mining industry are significant. If you don’t digitally transform, your comparative advantages might not cut it anymore, and more Agile operators with erstwhile grade, size and location disadvantages will start to price you out of the market, especially during supercycles.

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