Kumba Iron Ore reimagines mining with Oracle Aconex

The mining industry anticipates exciting times ahead, as companies not only grow and improve their operations but expand their traditional project portfolios to include initiatives around decarbonization, energy, security, and sustainability.

Kumba Iron Ore ranks as the fifth largest iron-ore producer in the world and the largest in Africa. Based in Johannesburg, South Africa, Kumba is a division of multinational mining company Anglo American.

The company is firmly committed to reimagining the mining industry to improve people’s lives through an innovative approach to sustainable mining practices. That approach is considered the blueprint for the future of Kumba’s business.

Kumba is committed to making a real difference for everyone whose lives they touch and mining the materials that make modern life possible in ways that are safer, smarter, and more responsible.

The future of mining

Mining projects are lengthy, high-value investments with long permitting cycles and stringent safety, health, and environmental compliance requirements. Building a mine can cost billions of dollars.

There's a big focus on operations, with implications on how the project needs to be handed over from the project phase to the operations phase. Given that mining projects exist in extremely remote locations and typically are tied to commodity cycles and markets, on-time delivery is critical.

And there is no single project delivery method that everybody uses. That appears to be changing, however. Mining projects typically use geographically dispersed project teams, and it’s clear that project team members and organizations at different locations, different companies, need to work together to deliver that project.

International consultancy EY indicated that capital productivity in the mining sector is a big problem with 64% of projects either running late or over budget and an average cost overrun at about 39%.

But there’s good news for what lies ahead. The same study indicated that miners improving their capital productivity will be better positioned to navigate ongoing uncertainty and drive better project outcomes. EY indicated that mining companies investing in the implementation of enhanced project management capabilities could reap benefits between of up to 30% of project capital value.

Why mining companies should implement automated project management

Deon Stassen is manager for project controls at Kumba Iron Ore. His role encompasses the establishment and management of project controls and project delivery standards, especially as it pertains to the functions of planning and scheduling, cost management, risk management, project administration and document management, project systems, and reporting, as well as project change control and WBS development.

His department typically performs studies and execution of projects from $5 million upwards and are normally more than $25 million. Their projects focus on extending the life of existing operations and expanding their existing portfolio of iron ore assets. Kumba recently embarked on an ambitious digital transformation program of its capital project controls environment and already are seeing benefits from this initiative. Stassen says the adoption of Oracle Aconex is helping Kumba improve capital project management and project control processes.

“From a project execution perspective, we've certainly experienced some benefits since deploying Oracle Aconex in the form of transparency of our project management and control processes throughout the project execution lifecycle,” Stassen says. “We have better visibility of our process performance across our delivery effort, which then allows us to identify and eliminate superfluous activity and excessive delays in the review and approval cycles.”

This level of visibility allows Kumba to identify and adjust not only a specific process, but also behavior within the project teams that could hamper or even jeopardize on-time delivery. “We could identify and eliminate delays typically experienced in payment processing and approvals to ensure that our contractors and suppliers are paid on time, improving our cycle turnaround times by between 20 to 30% or even more, depending on how manual and paper-dependent the process was to begin with,” Stassen says.

Managing massive amounts of documents

Quick, easy access to information is helping Kumba with business improvement processes. With a pipeline of projects generating massive amounts of documentation and contractual communication, it can be difficult to control and manage it all with the current systems used across the industry. Digital transformation is bringing capital projects into the modern information management era as the role of document controllers and the document control function related to capital projects evolves. “Kumba has witnessed a change in the document management and control function since establishing a common data environment,” Stassen says.

In the past, most projects would experience the document control function as a sort of post office intermediary between originators and recipients of documentation. This approach would see a lot of emphasis placed on document number creation, liaison metadata, and content quality in a smaller pool-based approach where the recipient would request certain documents or content from originators via document control.

“In today's environment, we see the originators and recipients are directly connected as the business process is intended to be, with a document control function placing a lot more emphasis on the monitoring of timely transmission of content, quality of metadata, and content document processing integrity across the common data environment to not jeopardize our data integrity,” he says.

Project team members are empowered to initiate and track their own review and approval cycles without the effect of bottlenecking and document control. Their ability to delegate or even relieve individuals within a functional governing process occurs seamlessly without affecting their ability to consistently apply governance due to the workflow templates, Stassen says.

“We foresee that this approach will help tremendously in shortening the project handover and archiving processes once we have to turn over to our operations,” he says.

With a unique security model, Oracle Aconex, which is part of the Oracle Smart Construction Platform, promotes end user trust and ensures data ownership is retained by the participants of the common data environment. As part of its digital transformation drive, Kumba invited its project supply chain to participate in the process with great success.

“Most projects in our case typically experienced quite a delay between contractual communication and the physical transactions materializing in the forms of claims or invoices,” Stassen says. “But now, given our level of visibility of these direct communication processes between ourselves and the other contracting parties in Oracle Aconex, these events could directly translate into more timely cost forecasting, leading to better decision-making at a tactical project management level and even more so in the case of multiple projects forming part of a portfolio.”

Rather than being reactive, Kumba now is proactive. Process compliance and transactional transparency happens quickly. With Oracle Aconex, they can detect potential claims before they occur without experiencing days or weeks going by before the official documentation reaches an inbox.

The benefits of a common data environment

Given that Kumba established standard processes within the common data environment, their typical month-end processing effort within project controls is significantly reduced. Reporting is automated and it reads directly from their common data environment which cannot be manipulated prior to publishing. “Now we've got one version, and our month-end close and reporting cycle normally doesn't exceed one or two days from month end. Our control team members don't have to work excessive hours or overtime in order to achieve reporting deadlines,” Stassen says. “We've also experienced many instances where some of our projects could make good tactical decisions within a few hours as the relevant cost and general information were already available.”

It’s an exciting digital transformation journey ahead for Kumba. It's also a frontier that very few in South Africa have yet to embark. “For Kumba, we will continue to align and integrate our capital project delivery environment with our FutureSmart Mining™ approach, which is our blueprint for the future of our business,” Stassen says. “It’s a future that enables innovative thinking, technologies, collaborative partnerships, while shaping our industry to make it safer, more sustainable, and more efficient and better harmonized with the needs of our communities and society.”

Rick Bell is a senior content marketing manager

Aconex Construction Management from Oracle