The Republic of Kazakhstan has enjoyed strong growth in its mining industry over the past decades on the back of high commodity prices; however, following a recent downturn in prices the country has decided to place more efforts on improving efficiency. For the job, Kazakhstan’s policy makers have called in Google and McKinsey & Company to introduce the Industrial Internet of Things in its mining ranks.
The Republic of Kazakhstan is the world’s seventh largest nation, and is situated in northern Central Asia. The country has enjoyed strong economic growth over the past decade, building on high oil and mineral commodity prices, both of which are abundant in the country. Its main mining activity is in uranium – Kazakhstan is the world’s largest supplier, and a is also major producer of copper, zinc and ferrochrome.
In recent years the falling commodity prices, like in a number of countries whose books lean heavily towards the export of natural resources, have resulted in a steep decline in Kazakhstan’s growth – which is expected to stagnate this year. In a bid to counter the effect of a protracted period of low commodity prices, and increase the attractiveness of the country to mining investments, the Kazakhstani Government has launched a series of plans aimed at cost-cutting and efficiency improvements. The focus however lies strongly on driving up efficiency, says the government, as cost cutting is not deemed in the interest of its people.
To support the transformation, policy makers have called in US giants McKinsey & Company, a global management consulting firm, and Google. The tech player and consulting firm will draft a strategy on how efficiency across the mining industry can be improved, and establish an approach on how leveraging big data analytics techniques and the application of Industrial Internet of Things could drive maturity wins. The partnership between McKinsey, Google and the Kazakhstani Government will see the collection and analysis of data from across the mining sector to a new centre, based in Almaty, the country’s commercial capital. A number of large mining operators, including ENRC, and London-listed Polymetal, have already signed up to participate in the data centre.
The technology being implemented involves Google installing an ‘industrial internet of things’, through which a range of sensors are installed on mining and processing equipment around the country, which, once analysed in the new “mining industry competence centre”, will provide insight into where bottlenecks occur, and this allow for real time efficiency implementation. McKinsey, which is said to be taking a 50% stake in the project, will provide the analytical and consulting skills to unravel improvement areas, and oversee execution. According to a spokesperson of the consultancy, the comprehensiveness of data availability would make the Kazakh initiative “unique in the global mining industry.”
According to a recent report from Accenture, the potential of the Industrial Internet of Things is massive – the technology is expected to add $14 trillion to the economies of 20 major countries by 2030.
“It’s not a secret that the mining sector has been a little bit neglected in Kazakhstan in terms of technological development,” Asset Issekeshev, Minister of Investment and Development, told the Financial Times. “We are trying to depart from the inheritance we got from the Soviet system. We are transforming our mining sector closer to the Australian model that allows you better access to information, and gives transparency.”