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A lot of miners are fighting for survival at present: what part can technology really play in improving their lot? (03 Dec 2015, 9:39) - "Many companies get comfortable doing what they have always done, with a few incremental changes. This kind of incrementalism leads to irrelevance over time, especially in technology, because change tends to be revolutionary not evolutionary." - Google co-founder Larry Page. It's hard to believe Google was only formed in 1998, given the immensity of change in the IT world - and by extension the 'connected' world - in its relatively short life. Given the number of leading technology companies that have bought into the mining IT space in the past decade - companies that have to compete in Google's world - it can surely only be a matter of time before the super-charged information age truly lights up the dark recesses of miners' bords and boardrooms. Or is that already happening? The diminutive Australian firm Blast Movement Technologies has just picked up its second consecutive national export award, this time for growing its business in North America. Its business is transponders that can survive mine blasts, and smart software. At the other end of the corporate scale venerable old-world machinery manufacturer Caterpillar is getting together with peppy young things such as Chicago-based Uptake for a seat on-board the Internet-of-Things (IoT) juggernaut. Connectivity and predictive analytics, says 40-year Cat veteran and CEO Doug Oberhelman, are the future. "We figured we better disrupt ourselves in our own way before somebody does an Uber on us," Oberhelman says. What about the companies using BMT's blast monitors to boost mining efficiency, or Caterpillar Minestar to optimise fleet utilisation - are they buying the whole disruptive technology pitch? Available evidence is not convincing. Miners spend tens of billions of dollars a year on fixed and mobile equipment; billions a year on explosives. But technology sales to the sector in the past two years have plummeted. One projection from technology research firm Frost & Sullivan that had the total global mining ICT-spend rising from US$16.3 billion in 2010 to US$26 billion in 2018 is looking particularly incongruous. The world's biggest, most profitable miners are sitting on the world's best mineral deposits. Are they also the world's best miners - or just living (well still) off discoveries of yesteryear? Does technology have a more important role to play in separating mining company performance, and investment returns, in future? There are those who've been around the industry for a long time who believe that it must. "The way we are creating long-term, sustainable value in our industry ... needs a major rethink," Dundee Precious Metals CEO Rick Howes says. An experienced mining engineer and mine manager, Howes has become increasingly outspoken on the industry's need to create 'digital mines', using available technology, that can be better managed in real-time. "We call this concept of intelligent mining we're trying to do taking the lid off because it's a big dark hole and no one knows what's going on inside it and so our idea was let's uncover what's going on inside it and know what's going on, in real time, all the time, and let's then manage better than we typically manage these [mines]. "It's ultimately about the decisions you make, and choosing the optimum decisions to get the optimum results. Rio [Tinto] is doing that now, which is very exciting. But I can't think of many others who are doing it." Technology has had a material impact on Rio Tinto's operational improvement drive at its Western Australia iron ore division, helping to make it the lowest cost producer in the world a decade after current CEO Sam Walsh stood on a Brisbane wharf watching automated straddle cars shifting cargo: seeing mine trucks in their place. Rio Tinto now wants to go much further, to change its mining DNA and not just today's (skinny) margins. Automation has figured in most of the headlines, but the change is more about information. "The mine of the future isn't just a mine with disparate bits of technology chucked into it - it's a modern, vibrant, sophisticated workplace," says Rio Tinto head of technology and innovation, Greg Lilleyman. "In the immediate future our automation programme is high on our priority list. "Where the biggest opportunity or gain comes [further] into the future ... is in the area of data and predictive analytics. Information is where we're turning our minds heavily to." Depending on who adapts fastest during the worsening global mining credit crunch, more companies will set off in pursuit of the leader and the business improvements on offer. Anglo American is carrying more unwanted historical baggage than Rio, in the form of operational challenges and debt. But it shares a similar strategic vision for the role of technology. "In my opinion, it is imperative mining moves very quickly to embrace some of the innovative technologies that are giving other industries a significant edge," says Tony O'Neill, Anglo American's group director for technical and sustainability. "One example is big data. Its analytic capabilities will give us fresh insight into our business that could have huge spin-offs in areas such as safety, production optimisation, equipment maintenance, and the leadership and engagement of our people." Canada's MaRS Market Intelligence said in a report on mining and metals sector IoT appeal: "If mining automation is the poster child of mining innovation, then the Internet of Things is arguably the 'printing press. Indeed, by enabling the IoT miners could unlock benefits beyond mining automation and enhance existing or new information technology products and services." A genuine game-changer Big data analytics is shaping as a bona fide game-changer for the mining industry, where talk of factory-style production and even lean operating principles has been around for some time but the supporting information management tools used in best-practice applications elsewhere has been missing. That is, mining has been and is a big data generator. Mine information management technology development and use has definitely been on an upward-moving curve since the mid-1990s. It's not a Google-type curve, but progressive. Still, a new focus on operations/information technology integration, analytics and business-intelligence driven decision making is crucial to miners' efforts to make IT transformational. "I don't think we've even cracked the door open yet on what the opportunities for the use of all that data and information is going to bring to us," Lilleyman says. "But we're starting to." Deloitte Americas mining leader chairman Glenn Ives says: "The real changes that have to happen [in mining] are akin to what happened in manufacturing. Compare a car plant in the 1970s with the car plant that Tesla uses to build its new cars. There are sensors on everything today. There are robots doing everything. "Mining today still looks like a car plant maybe in the late 70s, but certainly not one in the 90s. Data are not fed together, and that's the key. That's what's got to happen. IoT systems with sensors, full data analytics, and automation capabilities will bring marked improvement to both mining productivity and efficiency just as it did for manufacturing." The inaugural Aspermont Mining Intelligence 'Future of Mining' survey of the world's top 200 miners conducted between July-September this year emphatically underlined the value of high-powered computing, cloud services (increasingly), BI and data analytics to miners today, with predictive analytics set to become doubly important in the next 5-10 years. (Aspermont is publisher of Mining Journal). Of 116 responses to a question asking which technology, or technologies, will have the biggest impact on a miner's business (safety, efficiency, productivity, profit) in the next 12 months, and then the next 5-10 years, 61, or 52.6%, said high-powered computing in one form or another was important now. More than 92% said it would become increasingly significant. Big data analytics and BI was seen by 40.5% of respondents to be capable of impacting businesses this year, while nearly 96% of respondents believed it would be changing mining outcomes in 5-10 years. By contrast, less than 14% said automation and robotics would impact the bottom line, or improve safety, in the next 12 months, with about 35% saying it could conceivably impact significantly in 5-10 years. Half the respondents expect remote control systems to be changing their business in 5-10 years, up from 28.4% now. High-precision guidance technologies are also expected to have a far greater impact into the future, with 53.4% of respondents nominating them compared with 14.6% now. Other technologies seen to have much latent potential to improve mining efficiency, profits and safety include IoT and connectivity devices (21.6% saying important now/70% in 5-10 years); technologies, including software, that facilitate OT-IT integration visibility and integrity - the so-called single version of the truth - and open up optimisation possibilities (19.8%)/53.4%); and survey technologies such as laser, drone and satellite (19.8%/97.4%). Again, for many respondents who nominated this latter field, it was all about the survey data and making better use of it. Non-IT technologies seen to have potential to grow in importance were headed by new generation rock-cutting machines and tools (6% now, 26.7% tomorrow), and ore sorting and pre-concentration systems, while future applications of inpit crushing/conveying (IPCC) systems, the new breed of mine tunnelling machines, and vertical conveyors, are seen to be limited at this stage. 'New frontier' insitu and subsea mining technologies (and methods) continue to arouse interest, and research funding, and they have their supporters. New developments in downhole geophysics are seen as important, and set to become more significant, while alternatives to diesel, gas and traditional grid power are expected to become increasingly influential as mining cost and sustainability drivers. Bigger spread of believers Views on the game-changing primacy of the right information driving better decision making, and supporting technologies becoming more important, are no longer confined to the industry majors. Herbert Wirth, CEO of Poland's biggest miner KGHM, said: "All areas of technological development will be important in underground mining. Due to emerging threats, those of particular importance are such technologies which on the one hand ensure safe working conditions or limit time spent in hazardous areas, and on the other hand improve economic indicators. The key technologies are then automation, robotics, remote control and mechanical dredging. "But to implement [and maximise gains from] these innovations it is necessary to build modern networks of data exchange and analysis." Keith Neumeyer, CEO of Mexico silver miner First Majestic Resources, says a corporate information dashboard set up to enable the company to connect its operational KPIs and the financial overview provided by "the fastest known SAP installation in the mining industry" is giving the management team "amazing visibility into every penny we spend, almost in real time". "We are now operating more like a manufacturing business, continually finding ways to cut costs and operate more efficiently," Neumeyer says. "Manufacturing businesses constantly look for small efficiencies in each process which should show continuous improvement, which yield small and large cost savings over time." Neumeyer believes a "transformational shift" is required in the mining industry, based on "questioning everything", innovating, improving, eliminating waste and ensuring tonnes produced are profitable. "I see these turbulent times as a golden opportunity to make hard decisions and bring on transformational change that could be argued, should have happened earlier, but which in reality was much harder to implement during the previous cycle." Global IT director, business intelligence and application development at Newmont Mining Corp, Julio Da Silva says with data volumes and performance no longer constraints, analytics and reporting can be driven beyond what was previously possible. "It's now possible to integrate complex data in real time and enable real-time reporting and decision-making," he says. "A good example of this is in preventative maintenance. You can correlate data from temperature sensors on a piece of equipment with maintenance data from an ERP solution and assess preventative maintenance measures that have already taken place. "In real time you'll be able to make data-based decisions." Key to effective data-based decision making, says a survey respondent company CEO, is that integration. "It's about entire system management, or whole system management," he says. "If you take the modelling, the simulation, the data we're pulling in, together with automation, look at all the elements that are there together [in a mining system], they're not separate, they're really linked. You have to be able to manage the whole system. My belief is that it's more around that whole system management than it will be about any one of the individual items in the system. All of them are necessary, but when we start pulling them together I think that's when we're going to start to see the true value." Deloitte's Ives says: "With miners now collecting masses of data - through sensors, equipment monitors and other devices - they need systems for turning the data into intelligence. This involves more than the adoption of analytic programmes. It also requires companies to integrate their operational systems with their ERP platforms. "Ultimately the aim is to enable better decision making by adopting a common platform capable of sharing information across the extended enterprise in near real time. "Keep an eye, in this regard, on Rio Tinto's new data analytics excellence centre in Pune, India, where the company will analyse the huge volumes of data captured by the sensors on its fixed and mobile equipment to better predict and prevent downtime events that could impact productivity or safety." Rio shows the way Lilleyman told Mining Journal in London Rio Tinto's flagship business improvement projects, targeting energy efficiency, "world class asset management", technology deployment, and capital effectiveness, were expected to deliver hundreds of millions of dollars worth of annual cost savings. Predictive maintenance, leading to better asset management, would weigh in heavily. "By 2018 our maintenance costs will be US$200 million per annum less than what they are today," Lilleyman said. "I don't think we're, as an industry, all that advanced in our maintenance practices at all. I'd say Rio Tinto [is] a little bit ahead of where the average company is, but we're not anywhere near where I'd like us to be. We launched only in the last couple of months a group-wide programme to take us from wherever you might categorise us today, to world class asset management. "When you contrast some of the practices used today in the mining industry with those, for example, in the aeronautics, or nuclear industry ... there are great gains to be made." Rio Tinto is seeing a 10-15% lower cost of running autonomous haul trucks at its Pilbara iron ore operations, than manned vehicles. About 20% of the 350-truck fleet is currently autonomous vehicles. "We were running pretty well [with manned trucks] and there is always room for improvement there too, but the scope for improvement on the autonomous set-up was massive in comparison. We're now at 10-15% better [cost for 20% of the tonnes being produced in the Pilbara]. "And the gap is going to continue to widen, in comparison." The Aspermont Mining Intelligence survey of top-200 miners found technology-led mining execution system (MES) improvements figured prominently in companies' ongoing efforts to lift productivity. A McKinsey report on mining industry productivity released this year pointed to a worldwide (multi-commodity/multi-region) decline of as much as 28% in the past decade. The report, and others, have highlighted improvement in physical output of commodities in the wake of capacity expansions, at reduced labour levels. Economic productivity, affected by the lower prices received for many commodities, is also said to have improved on the back of previous high levels of investment, leading to substantially higher output, lower current capex and opex levels, and efficiency dividends from investment in technology. More than half (55%) of 104 responses to a question about the top-three productivity drivers nominated ICT-buttressed 'intelligent mining' as they key to improvement. Similar numbers indicated fleet, drill and blast, and mill optimisation programmes and projects would be major factors, while 44% said workforce reductions and 'sweating assets' were still on the agenda. Mechanisation continues to be a productivity booster in many jurisdications. Nearly 85% of respondents indicated gains would come relatively quickly - in the next 6-12 months - while 14% said it might take 1-2 years. Productivity gains of 5-10% were anticipated by 16% of respondents; 36% said a 10-20% productivity improvement was in the offing; and 8% could see bigger gains (+20%). The Future of Mining survey/research is sponsored by SAP and ABB Enterprise Software. This is part of a series of reports to come from the research.
