Mining businesses expect to invest considerable sums into IIoT over the next three years – with an average investment of approximately $3million. This equates to just under 8 per cent of mining companies’ overall IT budgets and represents around a six-fold increase from the amount spent on IIoT solutions since 2015.

How will the mining sector invest in IoT? (%)

Laggards
Starters
Progressives
Leaders

How will the mining sector invest in IoT? (%)

Laggards
Starters
Progressives
Leaders
8%

of IT budgets will be spent of IIoT over the next three years

This level of planned spend on IIoT places it as the number one next generation technology that mining companies expect to invest in over the coming period. Respondents expect to spend more on IIoT than they will on cloud computing, robotics and big data analytics (each at 7 per cent) over the next three years, coming as further indication of the sector’s faith in IIoT.

WHAT PROPORTION OF YOUR IT BUDGET DO YOU EXPECT TO SPEND ON THE FOLLOWING TECHNOLOGIES OVER THE NEXT THREE YEARS? (%)

IIoT
Cloud computing
Robotics
Big data analytics
Next generation security
Augmented reality

WHAT PROPORTION OF YOUR IT BUDGET DO YOU EXPECT TO SPEND ON THE FOLLOWING TECHNOLOGIES OVER THE NEXT THREE YEARS? (%)

IIoT
Cloud computing
Robotics
Big data analytics
Next generation security
Augmented reality

There is some significant variation within the average spend on IIoT, with around a third of respondents (32 per cent) expecting to invest less than $500,000 over the next three years. Although the size of the operation will naturally dictate how much companies are able to – or need to – spend on the technology, this may indicate that some mining businesses are falling behind in the IIoT innovation stakes.

Plainly, not all mining businesses have the same R&D budgets, and the perceived high cost of IIoT solutions was identified as a barrier to the success of IIoT projects by 37 per cent of respondents.

A lack of turnkey, off-the-shelf solutions is also an issue for half of mining businesses, meaning that IIoT projects must be largely bespoke, driving up the costs of implementation.

As the industry matures, and more off-the-shelf IIoT solutions come to market, these barriers should gradually start to subside. Increasingly, with fluctuating commodity markets driving organisational efficiencies, those companies who do not make the necessary investments will suffer.

However, when we consider the potential Return on Investment (RoI) of IIoT solutions in the mining sector, the implications for IIoT laggards become clear.

Mining businesses are generally confident in the ability of IIoT solutions to help them both save money and generate new sources of income. While the cost savings and turnover increases are negligible today, mining businesses expect their IIoT solutions to deliver an additional 9 per cent to their top lines and reduce their operating costs by 16 per cent within the next five years.

WHAT OPERATIONAL COST SAVINGS AND TURNOVER INCREASES IS YOUR ORGANISATION LIKELY TO ACHIEVE THROUGH ITS USE OF IIOT? (%)

Average cost savings
Average turnover increase

WHAT OPERATIONAL COST SAVINGS AND TURNOVER INCREASES IS YOUR ORGANISATION LIKELY TO ACHIEVE THROUGH ITS USE OF IIOT? (%)

Average cost savings
Average turnover increase

Those mining businesses that are slow off the mark, and fail to invest sufficient amounts in IoT technologies, will increasingly find it difficult to compete

Respondents expect to realise increased levels of automation, more effective asset utilisation and lower insurance premiums as a result of their IIoT initiatives, all of which will contribute to their bottom lines and help to increase outputs.

Critically, those that are investing higher sums in IIoT are anticipating correspondingly high rewards. Multi-commodities respondents, who expect to invest 6 per cent of their IT budgets in IIoT over the next three years state that this should deliver an extra 6 per cent to their revenues by 2023. Iron ore companies, who will invest 9 per cent over the same time frame, expect to add 9 per cent to their toplines.

Those mining businesses that are slow off the mark, and fail to invest sufficient amounts in IIoT technologies will therefore be placed at a distinct financial disadvantage.

FOR MORE INFORMATION ON THE RESEARCH, DOWNLOAD THE REPORT - INDUSTRIAL IOT ON LAND AND AT SEA: MINING

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