Newcrest Mining spent just over $26 million on its IT in this financial year; but the insights they provided are expected to deliver over $50 million worth of future recurring benefits back to their business. Having paid back the Newcrest IT spend twice over, Newcrest IT is aiming for even more impressive results in the coming financial year.
The listed mining business is deep into a digital transformation journey that is establishing a rich data culture at the organisation, supporting the business with data insights that can be used to improve workforce safety and optimise operations. Led by Chief Information Officer, Gavin Wood, Newcrest’s foundation for success is a strategy that includes a simplified and streamlined IT portfolio designed to deliver what the miner needs to succeed.
Newcrest’s IT approach is deeply pragmatic – they work closely with employees at Newcrest’s operations to assess what they need to do their job better, and then deploy tested solutions to deliver just that. Cloud computing plays a major role – delivering anywhere anytime access to data, along with the reach, resilience and elasticity required by Newcrest.
One of Newcrest’s core values is “innovation and problem solving,” a value strongly in evidence in the IT team.
Wood explains; “We have a strong drive towards a standards-driven agenda and are focused on delivering safe, responsible, efficient and profitable mining.”
The IT team works closely with the business, finds out exactly what data and systems they need to do their jobs safely and better, and then deliver solutions that do just that.
While he’s no fan of over-engineered or “gold plated” technology solutions for the mining sector, Wood demands from his vendor partners the sort of secure platforms that are robust, fit for purpose and which deliver good value.
“We make extensive use of managed services. The right suppliers are part of the extended team – they are not approaching this work feeling that they met their SLA so the job is done. They, like the rest of the team, are looking at continuous improvement opportunities. They are doing things consistently and looking over the horizon at delivering new value adding services to us,” says Wood.
Surrounding the strategy is a streamlined and business-focussed IT governance framework with a steering committee comprising IT and key business leaders who meet each month to ensure everything remains on track.
It has helped streamline work from the IT team says Wood as decisions are made faster and systems deployed swiftly.
The Newcrest IT team is also driving an internal IT transformation. This began with the team using what is describes as “capability building blocks” so that a solution could be put together with; “A bit of mobility, bit of cloud, bit of collaboration to assemble a solution with reusable capabilities.”
This transformation is now being cast forward so that the capability building blocks are focussed on business outcomes. So a new solution will exploit building blocks for process control, advanced analytics, workforce safety and productivity, shared intelligence and cloud. By leveraging Microsoft Azure, new solutions can be quickly spun up and deployed where they are needed. The Newcrest IT team is now looking to use containers to reduce further the system’s administrative overheads and allow more Agile teams to take a dev-ops approach, supporting rapid iteration and innovation.
But there’s no risk of innovation for innovation’s sake. “We want to deliver what the business needs and bring pragmatic thinking to bear that is focused on the things that matter in the company. Unless we see clear buy-in at our mine sites we’re not going to waste the company’s money on something that might sit unused.”
With around 4,000 users with access to Office 365 everyone in the organisation has access to key operational and business data when and how they need it.
Besides the corporate data held in that system and other IT platforms, the Newcrest IT team also “owns” the data from the front-facing mining and processing systems themselves thanks to a closer integration of information technology and operational technology.
It’s one of the richest seams Newcrest could ever mine.
Better access to data and streamlined processes delivered Newcrest 100,000 hours of productivity savings last year, and Wood says the team is on target to deliver another 100,000 this year. His team uses a balanced scorecard to measure its value, with a key goal being; “To drive hours of productivity savings through process improvements, training and mobility.”
Where his team finds a better way to do things – however small – they do it and those hundreds of small initiatives rapidly add up.
To unleash the value in the data that Newcrest collects, they have deployed Power BI and self-service dashboards that initially delivered Newcrest transparency about tonnes mined, the grade of the tonnes processed, how many ounces of gold were produced in a period.
“It’s a really powerful platform for us – we are making more use of Power BI to deliver dashboards and visualisations to give people the insights that they can act on.” And that is liberating cash for the business.
“Our digital team is delivering future recurring benefits through the application of data. This financial year IT spent approximately $26 million in capex and opex at a group level. However, only part of this pertained directly to digital. We expect to deliver over $50 million worth of future recurring benefits off the data science initiatives and process control automation – by increasing throughput of processing plants. If you process more tonnes, you produce more gold, that turns into more cash.”
“And there is real cash and by improving gold recoveries – after crushing, milling, flotation cells and the processes involved – if we can improve our recoveries by a couple of per cent there’s a lot of money in that as well.”
“You’d struggle to find many other IT departments paying for themselves two times over and we are looking to do better in the coming financial year. A lot of that is built on taking the data and using visualization and dashboards to empower people to take decisions to drive the business harder.”
Wood has created a culture of continuously challenging his people to put themselves in the shoes (or steel cap boots) of the miners that use the digital tools to improve safety and operations. One bold and highly successful move was identifying two talented individuals with non-IT backgrounds, but who exemplify driving performance through data and appointing them to leadership positions.
Increasing instrumentation and sensor deployment across the organisation is positioning Newcrest for an even richer data-driven future, with the data itself optimising operations. Ongoing maintenance and calibration of this instrumentation will be crucial in reaching this future.
“Between crushing, milling, the conveyors, flotation cells, autoclaves there are lots of data points and we envisage being able to use that data to optimise our operations. We will use the Microsoft stack, the data and the tools in there to look at the ore characteristics at the front of the plant and then optimise the plant settings to adjust for those ore characteristics, monitor how that goes and make changes based on the data. Machine learning algorithms will be key to that.”
“It makes mines inherently safer, there is a more consistent outcome, more stable processes. Stable processes mean more throughput and more throughput means more gold, and we see the long-term potential benefits of that in the hundreds of millions of dollars in free cash flow.”