Mergers and Acquisitions in Mining – The Implications for your Data

Mergers and Acquisitions in Mining – The Implications for your Data

By Christian Schroefl, CEO & Co-Founder of Natuvion Australia Pty. Ltd. Craig Boyle, Business Development Manager at Natuvion Australia Pty. Ltd. Benedict Louis, Consultant at Natuvion Australia Pty. Ltd.

When it comes to acquiring or selling an asset in mining, data management may not be the first consideration. Here is why it should be of paramount importance.

The rapid onset and spread of COVID-19 initially slowed down Merger & Acquisition (M&A) activity across numerous sectors. In 2020, a total of 61 M&A deals were carried out for projects and companies with primary business in metal and resources in 2020, with a total deal value of $16.70 USD billion. Volumes have since picked up from these lows with historical evidence suggesting that M&A markets quickly recover once uncertainty subsides. (Source: S&P Global Market Intelligence) A new increase in M&A transaction is fuelled partially by companies’ relentless search to build robust portfolios, but also by the drive to accelerate the energy transition. (Source: Deloitte) Proper data management is an area affected by all M&A activities which has to be prioritised. The aim must be to focus on management of data to enable the required reporting of financial and business information from the transformed entities. Organisations often need guidance as to the extent that data needs to be merged or split. The following aspects should be considered in a merger or carve-out of data:

1) System Consolidation

The requirement of migrating data from one or multiple source system(s) into one or multiple target system(s) and therefore consolidating data into one or multiple target system(s).

2) Company Code/Plant Merge

The requirement of merging existing legal entities into one target legal entity. In this case there is a merge of company codes, financial documents will be renumbered (offset or pattern) as they can be dependent on the company code.

3) Change Organisational Structure

The organisational structure needs to be set up. Typical organisational units inside backbone systems include the operating concern, management reporting structures, company code, plant, purchase, and sales organisation. For these organisational units, different scenarios are possible – starting from a rename of the same, deletion, merge or split.

4) Carve Out

This pattern ‘data carve-out’ describes the requirement of migrating selective data from a source system into a target system and may also include the deletion of the transferred data from the source system. The derivation of the relevant data scope will be defined according to organisational units (e.g. company code, plant, etc.).

“Significant mining assets acquisitions and mergers generate significant publicity in the media. The success of these transactions however is the seamless integration of assets and data”

– Christian Schroefl, CEO & Co-Founder of Natuvion Australia Pty. Ltd.

5) Technical Chart of Accounts

In a chart of account harmonisation, accounts can be renamed and/or merged if historical data need to be converted. In case of a chart of account harmonisation without historical data, a split of the accounts can be included.

6) Downtime Reduction

Transformation downtime minimisation can reduce the technical business interruption (system downtime). Three different near-zero downtime (NZDT) scenarios that can be individually combined are: 1) Warm-Cold-Data-Migration (Pre-/Post Migration) 2) Data Synchronisation of Up-Time-Processes (DeltaMigration/DB-Trigger) 3) ORACLE Database Optimisation/ Native-Data-Migration

7) Data Anonymisation

The anonymisation/pseudonymisation should not negatively influence the business processes. Anonymisation of personal data means replacing key fields (business partner numbers, customer numbers, personnel numbers) and technical data (documents, metering points, etc.) with synthetic data, which could be contrary to the purpose of the respective systems for analysing error situations and ensuring productive processes.

8) Process Mining

Process Mining works by extracting knowledge from event logs readily available in today’s information systems. This data is then visualised as a graphical interpretation of the business processes. The interpretation also outlines the variations to the end-to-end business process. It is these variations that may be caused by manual interventions of the business process, waiting on data and paper evidence etc. Process mining will then assist in identifying how these variations can be overcome either through removing manual processes and/or in some cases adopting Robotic Process Automation outlined below.

9) Automation

Mining organisations have been at the forefront of automation in industry with for instance driverless vehicles. Robotic Process Automation (RPA) has now also been commoditised to automate business processes. The robots known as ‘Bots’ can imitate human interactions within applications and processes. For example, RPA can significantly reduce the time spent on compliance tasks and also revolutionise the time to quote and invoice processes through automation of workflow and approvals to start.

About us

Natuvion is a digital moving company. Our team does not transport desks, filing cabinets or chairs. Natuvion moves businesscritical data and processes from one technology platform to another. We are specialists in all the data considerations outlined above. We stand ready to advise these matters to our Mining colleagues.