We caught up with JSC AK Altynalmas to discuss the company’s evolution towards full digitalisation within the mining industry in Kazakhstan.
REVOLUTIONISING RESOURCE EXTRACTION
Kazakhstan is the world’s largest landlocked country. It’s bordered by a number of nations including Russia to its north, China in the east, and Kyrgyzstan, Uzbekistan, and Turkmenistan in the south, and yet is vast enough to also border the Caspian Sea.
While landlocked, the country is geographically diverse with its lands ranging from snow-capped mountains, and rolling green hills, to open steppes, rocky canyons, river deltas, and arid deserts.
And with access to all of this varied land and accompanying natural resources, Kazakhstan finds itself as a key Asian contributor to the oil and gas industry through its natural gas reserves, and equally as impressive, a driver in the Asian mining industry through the vast amount of natural minerals available.
Traditionally (that is to also say historically) mining has been a “hands on” industry with more focus on individual workers, manually operated machinery, and factors such as safety, sustainability, and efficiency often coming second to raw output. However, in the present, we see everything has changed.
The jump between the old-school methods and modern practices is huge. Today, modern mining incorporates smarter plans, innovative ideas, and the latest technology to aid in the establishment of these once lacking business elements.
We are seeing the application of digital tools in almost every area of every industrial activity, and mining is no exception. Software such as 3D mapping and CAD (computer aided design) used to generate digital underground maps allow companies greater insight into mine planning than ever before. And the automation of machinery improves accuracy, efficiency, reliability, and cost effectiveness.
“We are about to commission the construction of another big project in Kazakhstan, which will be a gold and poly metallic deposit”
Diyar Kanashev, CEO
PAST TO PRESENT
JSC AK Altynalmas has been a major player in Kazakhstan’s mining industry since 1993.
The company mines gold ore deposits and other minerals all over the country. It prides itself on being set apart from its competition through its projects, programmes, and employee-centric business methods.
Diyar Kanashev has been CEO of the firm for over 10 years and has witnessed the transformation of the sector from a relatively manual operation to what is now a digitised and far more sophisticated series of processes.
“The adaptations within the industry have created us golden opportunities,” he tells us. The Asian mining sphere is currently one of change, challenge, promise and, for Diyar, excitement. With access to Kazakhstan’s vast natural resources and as a growing company, hard work is accompanied by high reward for the employees of Altynalmas.
Before joining the company, Diyar worked in the City of London for many years. Initially, this was with Norton Rose (now Norton Rose Fullbright – one of the world’s largest law firms) as a lawyer, with a focus on the legal side of mining industry related transactions. Thereafter, he left his legal career behind to become an investment banker with Merrill Lynch International (now part of one of the world’s biggest banks – Bank of America).
After gaining the collective experience in the financial consultation and transactional side of the industry, he decided it was time to pursue his career in the operational side. Diyar looked to become involved directly in mining back home in Kazakhstan, and when the opportunity came up to work with gold ore deposits for Altynalmas, he seized the moment.
He has been able to watch the incorporation of different methods, techniques, and tools that have changed and shaped the way Altynalmas functions in the present day.
The firm’s 2017 Digital Mine Programme is a prime example of this. This initiative was designed to, and has successfully, changed the way methods of mining are practiced at the company.
It brought about the shift towards automation and digitisation of processes – increasing operational efficiency, reducing production costs, and improving the safety for, and performance of, personnel through new best practices, innovative approaches, and the newest technology and tools.
The programme has delivered over 20 projects in the past three years that have been necessary in the company’s aim to move forward.
“When coming across a Tier one level of gold ore, you build a deposit and can exploit it for decades, and even live off that alone. In our situation however, it is typical for the gold deposits to be geographically distributed and scattered across distances,” Diyar explains.
“So, in Kazakhstan we are facing many small-to-medium scale deposits that may not be such an attractive proposition when mined alone, but when collectively consolidated alongside others, you can amass a scale of great value.”
Due to the country’s wide variety of terrains and environments, the process of mining gold ore and other minerals dictates the use of multiple forms of mining methods. Rock mechanics, metallurgy, hydrology, and many other disciplines are required on-and-off depending on the location, and mining various areas requires meticulous attention to detail and a lot of research and planning.
The 2017 Digital Mine Programme also carries sustainability benefits.
The common use of digital tools means that Altynalmas can conduct its operations using coherent and timely information and yet form its decisions on the basis of reliable data. This in turn, enables the company to run multiple mines at multiple sites format of operations making the most out of what the geology presents.
“We are striving to be a 100 percent digitalised company. This will increase our business competitiveness as well as allow us to provide us with new value-producing opportunities,” Diyar tells us.
AI technology is one of the many modern innovations to hit the mining industry in Asia, and Altynalmas has been incorporating AI-powered software into its business practices to better monitor the mining process.
“One can now monitor the process even without physical presence at the mining plant – for engineers all the key indicators of the grinding process are now available to display and view live on their smartphone screens, 24-seven,” Diyar tells us.
This is a significant step toward migration to the Digital Twins based model of operations and provides the company with a significant advantage over older methods of practice. After the sites can be remotely monitored, operators and employees will be able to provide consultation to on-site personnel from afar, reducing the need for person-to-person contact and operational expenses, as well as the impracticality and cost of employee travel and accommodation.
As for worker safety, digitalisation allows for distanced work, meaning that employees need not be on-site as often as they previously had to be. And it has, of course, increased job satisfaction levels.
“The AI powered platform allows to monitor and predict ball charge level as well as the frequency of changing the mill liners to maintain the optimal range for throughput and grinding effectiveness without unnecessarily having to stop the mill for inspections,” Diyar continues. “Before the introduction of the system, our engineers used to measure the ball charge level in the mill manually, which resulted in greater frequency of the stoppage of the production process.
“The presence and application of highly sophisticated products such as AI software would definitely make any place to be more attractive for work. We are very proud that both teams (the AI technology provider and of Altynalmas) who have worked restlessly to make that happen.”
Alongside this fluidity of company processes, for Diyar, the presence of reliable, uninterrupted supply arrangements to minimise capital deployed and maximise supply distribution is of major importance. Digitalisation is a key enabler for greater accuracy over operational demand for spare parts, consumables and maintenance works. Being in greater control over such things, makes the company a more desirable business partner to those on the supply chain side of the industry and opens up more a prospect for more efficient deployment of capital.
THE FUTURE OF MINING
As for forward-focused company plans, Altynalmas aims to commission several new operational plants to expand its services in the industry. The first of these is forecast to be commissioned in the second quarter of 2021 and was engineered with the application of BIM technology (in October 2020, this project won Bentley Global Infrastructure Award in “Mining and Offshore Engineering” nomination).
“Direction of our growth heads towards expanding our mining facilities and plants. We are about to commission the construction of another big project in Kazakhstan, which will be a gold and poly metallic deposit. Because of this, we are gradually evolving to not only mining and producing gold, but also extract certain other commodities such as copper, zinc and cobalt” Diyar explains to us.
Elements such as zinc and cobalt are also among the minerals the company is turning its focus to. The branch into a wider range of minerals provides a degree of natural hedge against fluctuations of the gold price, and also opens up new route of business partnership with other companies interested in treating their non-gold mineral resources. From a business model prospective, acquiring capabilities in treating refractory and polymetallic ore-concentrates gives the company a more robust business model.
Firstly, it makes its business not limited by the life period of mines it owns and turns it into an almost perpetual business model. Secondly, it gives exposure to the processing industry margins and significantly widens its geographic reach extending it to the producers of concentrate on the continent. Last, but not least, development of processing capabilities with application of environmentally friendly hydrometallurgy technology (for more detail, please be referred to the “Working with Glencore” part of the article) is also underpinned by our “Respect for the Environment” value and we hope to thus reduce the impact that the industry makes on our planet.
Altynalmas is also focusing on the increase in sustainability practices within the company’s mining methods. Evolving into a near-completely digitised business has taken them far with regards to sustainability – however, plans are afoot to fully digitise in all areas of the business. And for Diyar, it is very much a case of watch this space.
