Digital Transformation in Mining Industry has become an Imperative: Yancoal

By Claus Andresen, SVP, Head of Cloud Success Services, Asia Pacific & Japan (APJ)

“The system was developed totally independently at each mine site, so each mine site had its own configurations. Therefore, over the last 10 years, Yancoal was really modifying SAP on the fly. It was like modifying the engines on a plane mid-flight,” said Graham Slattery, General Manager, ICT, Yancoal Australia.

In an era defined by transformative technology, the mining industry stands at a crossroads. Facing a distinct paradigm shift —from the relentless quest for minerals to aging infrastructure and the weight of environmental responsibilities—mining companies find themselves at an inflection point. The push and pull of economic volatility, regulatory pressures, and the need for sustainable operations intertwine with the importance of digital innovation. Yet, despite the industry’s traditional roots, the imperative for digital transformation looms larger than ever. These pressing factors demand a multi-pronged approach to navigate the complexities, ensuring not just survival, but thriving in an ever-evolving landscape.

Among those pioneering the digital imperative is Yancoal, a prominent mining enterprise that embarked on a transformative journey in partnership with SAP. Through a meticulous process of business transformation, Yancoal has emerged as a shining example of the industry’s potential, enabled by SAP’s innovative solutions.

Digitally Forward, Mining in the Cloud

Yancoal, established in 2004, stands as a premier coal producer in Australia, operating and owning nine mines across the country. With a workforce of 4800 employees, its business priorities currently revolve around maximizing productivity, investing in blending opportunities, and pursuing M&A acquisitions diversifying from coal industries.

The cloud journey has not been devoid of challenges. As a longtime customer of SAP since 2011, Yancoal was armed with disparate system configurations at each mine site, leading to continual modifications. Despite facing industry headwinds in the pandemic years, a strategic business strategy to shift to RISE with SAP was recommended, which promised 20% savings over five years and paving the way for a comprehensive overhaul. This journey encompassed a brownfield implementation, technical upgrades, and future greenfield projects, streamlining operations by replacing legacy systems, optimizing data storage, and unifying reporting mechanisms onto the SAP platform.

“We delivered the project successfully within five months, seamlessly implementing changes that went unnoticed by the business is aligned to our objective of minimized impact to the business.   Demonstrate success and you gain the trust and confidence from the business that you can deliver a successful project.” said Maria Rodriguez, Business Solutions and Portfolio Manager, Yancoal Australia.

Yancoal focused on future-proofing its business by adopting best practice industry use cases to optimize efficiency and functionality. For example, Yancoal transitioned from multiple legacy on-premise and third-party analytics platforms, and consolidated various business reporting methods into a unified analytics strategy powered by SAP Analytics Cloud (SAC), SAP Analysis for Office and SAP Datasphere for improved efficiency. This move simplified the processes and notably reduced report generation time from hours to minutes. The decision to opt for a brownfield approach was driven by a necessity to address poor data quality, a challenge that could have taken years to rectify.

The collaboration between Yancoal and SAP goes beyond the typical vendor partnership. Supported by SAP’s Customer Success Partners (CSP) to augment its IT workforce and address critical business needs, this partnership embodies transparency, a shared vision, meticulous planning, and aligned governance.

“At the end of the day, we make the decision, but we make an informed decision. I couldn’t have done this without my partnership with SAP. I have a point of contact. I wasn’t alone.” Maria Rodriguez, Business Solutions and Portfolio Manager, Yancoal Australia.

Yancoal’s Future Vision

“Given the time constraints across Yancoal, our aim is to streamline operations through automation and unleash valuable time. Where do I see artificial intelligence (AI)? For example, AI can aggregate vast datasets, analyze them comprehensively, and yield valuable insights, opportunities, and risk assessments.” Maria Rodriguez, Business Solutions and Portfolio Manager, Yancoal Australia.

“Improving productivity is key. Data and technology, including automation and artificial intelligence, are further unlocking growth opportunities and enhancing our operational performance and improving our productivity, enabling Yancoal to be safer, more efficient and more sustainable.” Graham Slattery, General Manager, ICT, Yancoal Australia.

Looking ahead, automation clearly takes the spotlight as Yancoal aims to further streamline operations and save time for its workforce. Artificial intelligence plays a pivotal role in Yancoal’s business vision, where it will be used to analyze extensive data from work orders and repairs in the Enterprise Asset Management space. The aim is to identify critical risks and opportunities, especially in job planning and machinery performance. The company eyes SAP’s consumption-based AI model for gradual integration, a move they believe holds immense potential for future advancements.

Learning from successful business models, Yancoal seeks insights to streamline operations and save resources. Its emphasis on data analytics aims to provide real-time information to operators and management, whether on-site or remotely. Additionally, they aspire to automate maintenance tasks, envisioning a system where technicians can take photos of devices, prompting automated actions and reducing manual data entry.

Beyond SAP’s primarily focuses, Yancoal is implementing sensors to optimize large conveyor belts to minimize inactivity-induced inefficiencies as well as using new environmental monitoring and data capture technologies. The challenge, however, is the disparate data across platforms—a challenge Yancoal aims to surmount. Its vision involves centralization of data, from manual capture into a consolidated database to eventual automation, paving the way for seamless utilization of reporting systems with a clean digital core.

Ultimately, Yancoal’s story represents more than a digital transformation—it’s a testament to resilience, innovation, and the impactful nature of collaborative partnerships that inspire the mining industry, and beyond.