To compete in a rapidly evolving industry, mining, minerals and metals (MMM) companies must digitise, automate and decarbonise – without sacrificing cost efficiency. The key lies in strategically adopting AI and cloud technologies while embedding sustainability into every operational decision.
This is according to Johan Pretorius, MMM segment lead, Anglophone Africa at Schneider Electric.
Pretorius says sustainability is a driving force behind MMM companies’ investment in digital infrastructure. “A lot of companies are approaching us; they want to know what we are seeing in terms of technology, what is the next step to take. From a digitisation point of view, we consider how we can help, and AI is an important part of that.”
He emphasises the company’s role in empowering clients with the capability to leverage AI in their operations, optimise efficiency and drive down costs.
Total expenditure
Pretorius says part of the digital transformation is to choose between capital expenditure (capex), operational expenditure (opex) and then the proverbial best of both worlds, total expenditure (totex).
“Traditionally, capex has dominated procurement strategies in the MMM space. Investments in processing plants, heavy-duty machinery, substations and other core infrastructure fall into this category. While capex enables asset ownership, control and potential long-term value, it does also come with risk, particularly around high upfront cost and extended return on investment timelines,” he continues.
According to Pretorius, opex-driven models offer increased flexibility by shifting costs from large upfront investments to ongoing, manageable expenses. This approach is gaining traction as MMM companies adopt cloud-based platforms, software-as-a-service, predictive maintenance and pay-as-you-use solutions.
Totex is an alternative, adds Pretorius. “While not entirely new, it has in recent years started gaining momentum due to its ability to evaluate the total cost of ownership over the entire asset life cycle, thus combining both capex and opex. This model moves the focus from 'how' money is spent to 'why', therefore aligning investment decisions with broader strategic outcomes.”
Pretorius says an opportunity may appear relatively expensive in terms of capex, but under the totex approach, it offers tangible economic benefits with an attractive payback period.
“Totex, therefore, emphasises the whole life cost of an asset to the initial capital outlay,” he says, adding that to implement a totex strategy requires accurate, integrated data from design through to operation.
Pretorius asserts that a successful totex strategy also demands cross-functional collaboration. Procurement, engineering, operations, maintenance and finance must align around shared goals and speak a common language of value.
According to Schneider Electric, totex breaks free from the traditional capex/opex divide, enabling MMM companies to adopt agile, tech-driven strategies. By focusing on long-term outcomes rather than spending categories, this approach accelerates both digital transformation and the energy transition.
Digital journey
Pretorius agrees that companies are at different stages of their digital journey, some more advanced than others.
Schneider Electric conducts a digital maturity assessment to ascertain where gaps exist and how best to address these. This assessment is part of a broader approach by the company to evaluate the ecosystem in which its clients operate – including the contribution of third-party service providers.
“We look at the whole ecosystem and put ‘the glue’ together to make sure that the solution being sold to the customer is sound and in line with their needs,” he comments.
As to the level at which MMM companies are adopting newer, emerging technologies, Pretorius says while he does not have exact percentages, it is clear from engagement with these ecosystems that the rate of adoption is increasing.
This is because most companies that Schneider Electric works with recognise the need to upgrade their infrastructure and transition away from outdated install bases – the number of products or services still in use by customers.
“They are upgrading the training centres, upgrading operations and have roadmaps in place for those upgrades. This is a very big drive in the mining sector, especially in South Africa,” Pretorius explains. “In Africa, many mining clients are looking at greenfield installations to be future-proof for the next 20 to 30 years.”
This is a breakaway from the norm, which is based on a ‘let’s just build it and we’ll sort out any issues afterwards’ attitude, says Pretorius.
Today, companies are approaching technology adoption with a more meticulous, calculated approach based on pertinent questions – what do we need? What about sustainability? What about ROI? What is the level of support available? Do we build locally? Do we skill up our own personnel in order to be able to support ourselves?
Another key trend in MMM companies is the centralisation of resources, aligning multiple, distributed sites into one central reporting area.
The adoption of AI and cloud-based digital solutions is expected to continue to increase as MMM companies look to galvanise resources to invest in and benefit from future use cases, such as self-driving/autonomous vehicles and battery-operated infrastructure to entrench eco-friendly and sustainable operations.
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