Dundee Precious Metals: A Case Study

Dundee Precious Metals: A Case Study
October 11, 2016 Virtual Consulting
Digital Intensity Assessment

Digital Intensity Assessment

  1. The Challenge

The mining sector continues to face enormous challenges as the fall in commodity prices across most commodities continues to impact the cost, asset and debt settings that mining companies need to have. Prevailing challenges that have been present for a long time but have been unresolved are now becoming critical. Globally productivity has been falling since before the commodity price boom despite vast production and supply chain investments. The physicality of many mining operations is becoming increasingly difficult.

Dundee Precious Metals is a Canadian-based, international mining company involved with precious metals. The company works to identify, acquire, finance, develop, and operate low-cost, long-life mining properties.

Dundee Precious Metals’ flagship mine in Chelopech, Bulgaria, produces gold, copper, and silver concentrate. The company set a goal to increase production by 30 percent. The big challenge was reaching the target without adding more people or adding vehicles to its mobile fleet.

For Dundee, having real-time information, as it happens, instead of waiting for the shift to change was the keystone. Short interval work cycle improvement is seen as the key to substantially improving production, and that calls for full visibility of all activities underground. Work cycles could be adjusted in-shift to maximize production. Real-time equipment related information such as engine temperature, oil temperature, equipment location, fuel levels, etc. would enable the company to perform repairs prior to unexpected equipment breakdown thus reducing equipment downtime and increasing equipment availability and utilization. And real time communication links with all operators underground allows for in-shift thoughtful adjustments.

As far as production information was concerned, management was in the dark and knew nothing until supervisors filled out paper reports at the end of the shift. There was little shared knowledge about in-shift production interruptions. This prevented the company from fixing problems immediately and optimizing production cycles, all in-shift.

  1. Solution

VCI was given the mandate to help envision and accelerate digitization at Dundee Precious Metals. VCI ’s main scope of work included two main work streams:

  • Create a new corporate strategy for Dundee, including a set of scenario based options for better, more efficient decision making, which in turn optimizes resource usage.
Image: Digital Intensity

Image: Digital Intensity

  • Do a baseline digital assessment and gap analysis of the level of technology usage at Dundee’s current Chelopech operations, including prioritized list of initiatives and a roadmap.
Image: Digital Intensity

Image: Digital Intensity

With Innovation intrinsic to Dundee’s new corporate strategy, conducting a Digital Intensity Assessment at its Chelopech operations helped management to better understand what the mine is currently capable of doing and what could be possible if its digital intensity was increased. Applying the People, Process and Technology lenses, VCI mapped out Dundee’s digitization efforts at Chelopech, ranked the asset’s “Digital Intensity”, which helped us define the parameters for the Vision and Roadmap. Elemental to the Digital Intensity Assessment process is its related economic values and risks. VCI defined the gaps to boost top-line and bottom-line results, and prioritized the strategic initiatives into a three-horizon roadmap, generating a business case to measure the quantitative and qualitative impact of each.

Digital Intensity

Image: Digital Intensity

Before digitizing Chelopech, management launched a detailed change management program, helping to overcome the fears of employees and transferring ownership of the new solutions to them. In the background technologies were tested and redesigned to result in a cost effective technology solution. Dundee started its digitization roadmap by equipping Chelopech with wireless technologies for communication and location tracking. This allowed them to see all underground activities in real time. The tools and trades for 20th-century mining were pushed aside by a new generation of techniques and processes that drew their inspiration from a variety of knowledge industries. Dundee succeeded in transforming its mining processes by taking advantage of Internet of Things (IoT).

Currently, Dundee is one of the few mining companies in the world that uses a large-scale, wireless industrial IP network in its underground mine and office facilities at Chelopech. The network helps connect the in-vehicle IP phones and tablets, video surveillance cameras, ventilation systems, fans, doors, power, programmable logic controllers (PLCs), video conferencing system, and even the blasting system.

Dundee’s digitization roadmap includes improving all work processes underground and in the mill.  For example, drivers, supervisors, and managers use wireless IP phones to communicate from anywhere, above ground or below. Shift supervisors and drivers anywhere in the mine can now exchange instant messages. Drivers receive messages telling them where to go. They also see how many buckets they have dumped, and how many more before the end of the shift. If an issue gets in the way of achieving the goal, such as a vehicle problem, drivers can use their tablets to capture video and share it with an expert in real-time.

To ensure work processes are adjusted to the new digital operating platform, Dundee has mapped all operational business processes in ARIS, and VCI is now helping with the transference of these digital Business Process Maps to first line supervisors. This step ensures that the work processes stays in line with digital capabilities and that the built-in continuous improvement design is owned and managed by first line supervision and not some staff function.

To track the location of people and vehicles, Dundee attaches RFID tags to miners’ caps and to vehicles. The wireless network picks up signals from the tags and transmits them to the collaboration center. With the help of custom computer software the locations are superimposed on a map that is now in the process of being linked to a 3D dynamic rendering in a “holo-cube.”

The new collaboration capabilities also extend to other company locations. For example, managers, geologists, and metallurgists in different locations can collaborate with an in-person experience, using video conferencing capabilities. Discussing production, development, and project schedules face-to-face helps to improve understanding and decision-making. That’s especially important in an international company, where people might be speaking in their second or third language.

VCI is now in the in the process of designing and replicating some of the technological solutions at Dundee’s operations in Namibia.

  1. Results

Increased Production

Since connecting its people, process, data, and equipment, Dundee increased production from 0.5 million to 2 million tons annually. That’s a 400 percent increase, far exceeding the 30 percent goal it had set out to achieve. It has done this without increasing its mobile fleet although some shaft constraints had to be removed.

Throughout any day, supervisors can see shift changes, miners’ locations, the number of buckets filled and transported, and vehicle status. At the beginning and end of every shift, the mine captain sitting in the collaboration room knows the status of all work places and can make accurate calls for the next shift. During the shift, a controller sees where every vehicle is, and can send an instant message to the driver to adjust the route to continue hauling, so instead of leaving the vehicle idle, it is being redeployed to get as close as possible to 100 percent utilization.

The ability to share real-time video also helped to improve production. This value was proven when vehicles inexplicably kept breaking down. The vendor is in Canada. Before, Dundee would have had to pay for a technician to fly from Canada to Bulgaria to diagnose the problem. To address that particular incident, the technician diagnosed the problem by viewing real-time video and solved the problem in hours instead of a week, and saved almost $50,000 in travel costs and time.

Increased Safety

Most mining companies ignite blasts over a leaky feeder system. Dundee is one of just a few companies worldwide that transmits blast signals over the wireless network. This capability improves safety because the blasting system is integrated with the blast doors and with the people-tracking system over the network. Thus, one more precaution to make sure blasting does not occur unless every individual has exited the mine and all the relevant blast doors are closed. The next step on the roadmap is to deploy drones and “digital snakes” underground to further help with surveillance and removing people from dangerous work places, especially immediately post blasts where drones can be used for safety scanning and volumetric readings.

Improved Asset Utilization

Dundee’s digital roadmap also supports condition monitoring of vehicles so that they can be serviced before they break down and interrupt production. Vehicle telemetry continually transmits data over the wireless network, such as fuel, engine and oil temperature; tire pressure and engine rotations per minute. When the information is out of range, the vehicle is brought in for inspection and repair. Alternatively, if a vehicle is not ready when scheduled, it sends a notification so that the supervisor can request another vehicle. From a production perspective, the system tracks vehicle activity including route, speed and number of buckets dumped and weight. All this information helps with the continuous optimization of mobile assets.

Decreased Communications and Energy Costs

Using the Wide Area Network (WAN) for voice and video-conferencing has saved nearly US$2.5 million in long-distance charges over two years. Energy costs have also decreased. Dundee installed optimization systems for most of its underground air, temperature and water utilities. A central application controls fans, lights, and power over the network. So, when more people are in an area, fans spin up and lights grow brighter and when nobody is there, the lights turn off and fans spin down.

Next Steps

Dundee’s digital transformation has opened up many more digital opportunities to help support a continuous production improvement. We are now exploring the options of extending the IoT concept to health monitoring for underground workers as well as extending the environment monitoring sensors.

Completing the “last frontier” of fully digitizing underground work by removing the last paper-based work is now in motion. We are also investigating how to best improve collaboration by merging the collaboration spaces between the various operations functions like planning, operations, maintenance and supply chain. We have already brought IT into the collaboration center as a permanent member to eliminate the time wastage and communication breakdowns between operations and IT.

The transformation of the mining is under way. The Internet of Things (IoT) is helping to enhance
safety, increase production, and optimize resources based on real-time information. Multi-functional collaboration and digital business process mapping are major elements essential to the success of this transformation, as they will enable the next wave of algorithm-based optimization.

Dundee is leading the way in an industry that is still in the early stages of digitization. Real innovation requires a meeting of the minds and VCI is a proud partner of Dundee. VCI has aided in planning scenarios, implementing strategies and developing roadmaps to help propel Dundee towards the next step of the “mine of the future”.

VCI has helped Dundee make more than just incremental changes, rather they have partnered with Dundee to effect real step-change through their focus on people, processes and technology.


For More Information

Gideon Malherbe, Partner at VCI USA Inc.

Email: gideon.malherbe@govci.com

Phone: +1 (914) 381-0000