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IBM (NYSE: IBM) Mining Solutions

Mining Efficiency Technology

By Marcelina Hardy
Wednesday, July 31st, 2013

IBM (NYSE: IBM), the software developer giant, has decided to dabble in the mining industry. Who would have thought?

underground mineIBM has come up with a way to optimize the mining industry – to help it out with production and exportation with innovative technology. Specifically, it will help with resource usage, output, and save the mining industry money by improving operation efficiency. The term that you will start to hear everywhere in the investment world is “Mine-to-Ship.”

IBM has found a way to put the mining industry on a schedule. Supple chain operations will be set to work systemically. The goal is to increase efficiency, which has always been the company’s achievement for anything it's delved into.

How it Works

Mine-to-Ship loads materials on a train. The amount it loads is dependent on operational information. It takes into account equipment and stock status, also keeping track of equipment maintenance. Essentially, it takes over the human operation of the shipping process, which cuts down on human error and takes into account many factors that are being considered now.

To take it one step further, IBM is also instating new exploration technologies, including geospatial modeling and seismic imaging. Geospatial modeling will gather, store, process, and deliver earth mapping. It will pull information by surveying, sensing, geographic information systems, satellites, and cartography.

Seismic imaging takes internal images of the earth. This will help locate reservoirs quickly, which can increase production in areas where it’s been hard to find new mines and fields. Besides being able to locate new areas for mining, the new technology from IBM will also help with extraction and recovery afterwards.

Who’s Benefiting from IBM

Steel production is one of the industries that will benefit greatly from the new technology. In addition to gathering, monitoring, and analyzing steel production, the solution will conserve energy. With conservation of energy, less money will be wasted, which means more revenue.

The coal-mining sector is another industry excited about the latest advancements. Reduced risk for miners with the information collected from the software can save lives and increase coal production and exportation.

Petroleum has always been difficult to locate in some areas. With IBM technology, petroleum will be easier to find, collect, and deliver. Rising production means meeting demand and an increase in revenue.

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As an investor, you’re probably eyeing IBM's work with the natural resource industry wondering how you can benefit from it. That internal itch you have to seek out advancements in the industry is a good one to have because it signals you to act on this quickly before you miss out.

From the Economic Times:

"While working with companies in this industry, we have seen an increasing need for maximising sustainable and value-based engagements," V Neelakantan, IBM ISA Industry Leader (Manufacturing and Natural Resources), said.

The limited supply of natural resources coupled with rising demand is a key driver for new technologies in this industry, and the scale of this industry is so vast that a fraction of a percentage improvement in any single area can yield benefit in billions of dollars, he added.

While IBM is working with many corporations right now, one of the largest is the Oil and Natural Gas Corporation Limited (NSE: ONGC). This multinational oil and gas company based in Dehradun, India is one of the largest in the world, producing as much as 72% of India's crude oil and 48% of its natural gas. Due to its enormous production, Fortune Global 2000 listed it as one of the biggest corporations in 2012.

But just because ONGC is big doesn’t mean it has no more room for growth. With IBM's new technology, it’s likely it will be able to grow even bigger, remaining a contender in the world’s oil and gas industry.

With IBM on board with the natural resource industry, this is just the beginning for better production. No one knows how beneficial this will be to the coal, petroleum, and metal industries around the world, but one thing is for sure: it will be beneficial, and there’s more room for adjustments that will further improve efficiency.


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