The Mining Servitisation Journey
Why Most Mining Companies Struggle with Servitization (And How to Succeed)
Here's an uncomfortable truth about service-based transformation in mining: most companies underestimate the journey by 2-3 years and the investment by 30-50%.
Research by Bigdeli and Baines identifies four distinct stages mining operations go through:
Stage 1: Exploration
You're studying peer implementations, evaluating supplier offerings, running small pilots. Management is asking: "Does this actually reduce total cost of ownership?"
Reality check: Remote mine locations create unique complexity. Can your telecommunications infrastructure support real-time monitoring? Can service providers deliver rapid response in isolated regions?
Stage 2: Engagement
Service models are gaining acceptance. You're expanding pilots, developing contract management capabilities, integrating data systems.
The hidden challenge: Cultural resistance from maintenance teams who fear job losses. Success requires showing how servitisation elevates teams from reactive repairs to strategic asset management.
Stage 3: Expansion
You're accelerating across multiple sites and equipment types. Predictive maintenance is demonstrating real value, with companies like Freeport-McMoRan increasing truck availability by 5% and reducing maintenance costs by 10%.
The complexity: Each mine site has unique geology, climate and constraints. Service models that work brilliantly at one site require significant adaptation for others.
Stage 4: Exploitation
Advanced services are core to your operational model. You're operating with fully integrated equipment management, autonomous systems under performance contracts, digital twins optimising mine plans.
Real example: Caterpillar signed transformative agreements with key mining customers in 2021, developing customised, site-specific solutions to achieve bold sustainability objectives.
The Servitisation Paradox
Here's what research shows: financial performance improvement lags behind operational performance improvements. You'll see better equipment availability, reduced downtime and improved maintenance response times 12-18 months before the financial benefits fully materialise.
This is where executive commitment gets tested.
The Companies Succeeding Have:
Board-level support for multi-year transformation
Clear business cases with realistic timelines
Willingness to learn from both successes and failures
Patience through the challenging middle period
Where is your operation on this journey?