Russian potash producer Uralkali has in the past few years launched a wide-ranging digitalisation programme that targets everything from health and safety management to basic business processes.
The programme took on a new dimension since last December when fellow Russian chemical products manufacturer Uralchem acquired a controlling stake in Uralkali.
That deal brought together two of Russia's biggest fertilizer producers - Uralkali's annual revenue reached US$2.7 billion in 2020, while Uralchem's is not published but estimated at over US$2 billion.
Mining Magazine talked to Valery Fokin, IT Director of URALCHEM and Uralkali to see if the merger had impacted on the plans to expand digitalisation and automation.
Have you started using any innovations to improve asset safety over the past year?
In early 2021, we rolled out an LTE network at Berezniki-2. This was a pilot project developed by the mobile operator MTS. The network was installed in challenging mining and geological conditions, at a depth of 400 metres. Despite this, it demonstrated stability, reliability and safety during testing. As part of the pilot launch, we tested functions responsible for the safety and efficiency of mine employees. Among these were group audio communication services, data transmission and video streaming. Over time, the LTE network will enable us to incorporate advanced analytics solutions, remote production process management, autonomous equipment operation, robotisation and smart video surveillance.
In 2020, we piloted a MGIS project (a digital twin of our mines) at Berezniki-2 and 4, which focused ensuring mine safety and used three-dimensional geological modelling. The project was then rolled out to other sites. Similar activities took place at Solikamsk-1, 2, and 3 in 2019. The system is currently hosted across the company and operational at all Uralkali mines.
In 2020, Uralchem launched a project to comprehensively automate our health and safety management processes, based on the Russian platform called BRealIT, which will significantly increase the efficiency of our work in this area by minimising the number of accidents, incidents, and penalties.
Additionally, to guarantee the control of these processes, we are implementing projects using intelligent video surveillance technologies as well as various mobile electronics and sensors.
Are you using any new software types that are helping with operations?
In addition to the aforementioned projects, the most promising area of work for us now is data management and the development of artificial intelligence (AI) technologies.
On top of the standard competition over production costs, in large business there is also competition over the best management model. With the former, the task is relatively clear - we must constantly search for ways to reduce costs without sacrificing quality. With the latter, however, things are a bit more challenging. Modern management systems require the involvement of people in the decision-making process at all levels.
While out-of-the-box thinking is required at the strategic level, at the operational level, many decisions are made on the basis of standard algorithms. As AI technologies continue to develop, why not transfer most of the operating decisions to them? AI will make decisions instantly based on evidence and without bias, enabling companies to work and develop faster. This approach is often referred to as Data Driven Enterprise.
AI, however, is not something that you can simply buy at a store. In order for it to work effectively, it needs a large volume and constant flow of high-quality and properly structured data from all processes across the company. Therefore, to build it, we need to ensure maximum and high-quality digitalisation of all information. Paper documents and logs, local Excel spreadsheets and other unstructured and non-digital media need to become a thing of the past. Instead, a fully digital and integrated system for managing all processes needs to emerge complete with the tools and processes for collecting, validating, storing and analysing the data. This is the challenge our company is facing for the next 10-15 years.
Do you expect IIOT to play a bigger role over the next decade?
Yes, absolutely. IIOT is one of the main data collection systems. Without it, developing of full-fledged digital models of production processes is impossible, making the transition to Data Driven Enterprise impossible as well.
What areas of digitalisation is Uralkali focused on?
Following Uralchem's acquisition of the controlling stake in Uralkali in late 2020, I essentially serve as the IT Director for both companies. Both Uralchem and Uralkali continued to implement strategic digital projects that had already been planned, but the acquisition seriously affected the use of certain instruments. The main task now is not to consolidate, but to find synergy between the business processes of the two companies.
We are working in three different areas to implement our digital transformation strategy, the first being Basic Automation. We understand that we will not be able to build the upper layer of digitalisation without automating basic business processes, building an IIOT platform and developing a modern fault-tolerant IT infrastructure and integration platform.
The second area is the digitalisation of production. We are already applying Industry 4.0 tools, like AR and VR, working with big data (including the use of artificial intelligence technologies and AI data collection) and using various mobile electronics in production processes, machine vision, and more.
The third area is the creation of convenient digital services for customers such as Farm Management System, Precision Farming, distance learning and so on. This area is being implemented by a separate company called DIGITAL Agro.
What areas of automation can be accelerated in your sector?
We are a manufacturing company, and, therefore, the main application of modern digital tools is in the optimisation of production processes. These are technologies first and foremost aimed at increasing the uptime of our installations and bringing the installations to an optimal operating level, in which they yield more products with optimal quality while consuming fewer resources. These technologies should also ensure the highest possible occupational safety. Thus, we can increase the number of manufactured products while guaranteeing stable quality.
Another goal is the optimisation of various costs, such as energy and employee costs. To this end, in addition to basic automation systems for data collection and production management (MES), maintenance and repair (EAM) and laboratories (LIMS), we use mobile devices for organising equipment rounds and repairs, IIOT sensors and various expert diagnostics systems like Safe Plant, and predictive analytics. These range from industrial APC solutions to digital models of production equipment using our unique AI developments.
Another area is the digitalisation of customer relationships, and I'm not just talking about the use of CRM-class systems within the company, which we have implemented and are actively developing. In recent years, the e-commerce trend has intensified, gaining momentum during the pandemic. Since the B2B market in which we operate is also increasingly moving into the e-commerce space, we have launched our own e-commerce platform.
This digital platform is not just a convenient way to buy our products. It is a full-fledged multifunctional personal account in which, in addition to purchasing, a client can see the entire history of their interaction with us, go through training, RSVP to our events, order marketing materials, and use other services. The main challenge for us here is digitalising the development of a price offer for clients. The price depends on many factors, such as market quotes, customer loyalty, seasonality and level of demand, and is determined by the sales manager during negotiations with the client. The current challenge is replacing this human element with artificial intelligence.
We are of course also introducing digitalisation into other business processes: integrated resource management (ERP), sales and operations planning (S&OP), automation of project management, logistics, procurement, health and safety, and back-office functions. There are hundreds of projects. However, our approach to initiating such projects is pragmatic. We do not engage in digitalisation just for the sake of digitalisation. These projects should either have a tangible effect on business, cover risks, or provide promising opportunities for development.
Are you using new technologies to improve ESG monitoring?
We are active supporters of ESG. Uralkali already has an ESG strategy in place, while URALCHEM is in the process of developing one. This strategy includes a range of activities, including the automation of ESG metrics monitoring. We are currently looking at several tools, but the difficulty here is that there are no unambiguously developed algorithms for calculating and verifying such indicators, so any such tool will need to be significantly improved, which is something we are preparing for.