Home > Mining Automation: Adapting to the changing face of resources

Mining Automation: Adapting to the changing face of resources

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Automation and its accompanying disruptive technology is changing the face of mining completely.

Boundaries are being moved, new opportunities are arising, and the way in which miners do business is evolving.

According to professor Michael Jacobides “when the environment changes profoundly the maps with which we do navigate it may need to shift as well”.

As mining enters uncharted territory after the boom, it will need to redefine itself, and automation is playing a major part in this.

Adapting to the post-China boom times will involve miners concentrating on sustainability, optimised efficiency and creating value within communities, according to the head of MMM for Schneider, Diego Areces.

It is not news that miners are adapting to shifts, with a major one being falling demand from China.

The 13 per cent Chinese GDP growth of 2007- and the need to feed this with resources - has slowed, with single figure expansion tipped for the near future.

At the time of writing, the price of iron ore had just hit a five-year low, and some analysts are predictingit could fall below US$80 a tonne next year, and potentially drop further to $US75 a tonne in 2016.

Diego Areces of Schneider, which is a partner to some of the world’s biggest miners, believes the recent lax demand for resources could be a positive as it’s more sustainable and less likely to be volatile: Times are different and miners will have to behave differently in response.

Growth will be slower overall than it used to be, though this isn’t all bad.

“The pace is going to be slower because we are no longer going to have these demand shocks that China created, for instance,” Areces toldAustralian Mining. “We’re going to have India, Africa, but this is not going to be like China.

“The population will continue growing, urbanisation will continue, the middle class will continue growing, therefore the consumption will continue growing, but at a different pace,” he said.

“Mining companies need to adapt to that.”

According to Areces, who is the vice president of Mining, Minerals and Metals Solutions at the French-headquartered energy and automation specialist, there are three key aspects that will drive the industry:sustainability, optimising efficiency and value creation.

No longer just a reporting requirement and something seen as an impediment to growth, sustainability is a must in any business, Areces said.

“Today if mining companies are not sustainable they will not be able to operate... So that kind of accountability is a must. And it’s no longer about just being sustainable - it’s protecting the environment in a productive way.”

Optimising operations seems a no-brainer.

“That for us is about people efficiency, production optimisation, and assets utilisation and optimisation,” said Areces.

Values will be more important than volume, and companies will be driven to be the best at what they do rather than the biggest.

This statement was echoed by Honeywell Process Solution’s regional business leader – Pacific, Darren Wyllie, who told Australian Mining “it used to be about getting the most tonnes out the door as quickly as possible, but this has now changed and now how we get these tonnes out the door is much more important”.

Data will drive many operations

According to Erik Brynjolfsson, from the MIT Sloan School “roles in a deeply data-driven world are going to shift; I think the job is going to be to figure out, ‘where do I actually add value and where should I get out of the way and go where the data takes me?’”.

There is a focus on predictive analysis and the entire chain of production, and seeing how automation and new technology plays a role in providing granular data as well as a broader overview of operation – essentially which assets still work, and importantly, still make sense in the current economic environment.

Consider BHP’s recent decision to split its assets, praised by supporters asgood for the clarity and focus of the miner as well as an exercise in cutting unnecessary cost

“We’re seeing a higher focus on cost reduction to improve productivity, fewer people are doing more, and we’re seeing a number of clients turning to automation to improve how they interpret information from their assets and use this to impact their business,” Wyllie told Australian Mining.

Return on capital investment will also be something mining businesses care more and more about, with divestment of what’s not being used.

Assets at a mine site that aren’t being fully utilised will look more and more like waste.

“If you have 50 per cent of your capacity sub-optimised, you can cut your plant in half and get 4 per cent [on what’s gained from the sale]” Areces said.

Another value-related prediction was the extension of companies’ value chain, with gasification of coal cited as an example. Again, it is to do with getting more out of assets.

Again, it is not just about getting more out of the ground, as “productivity is also about making sure we’re driving safety online with this development, we have an obligation to get it right,” Ventyx’s chief executive Jeff Ray told Australian Mining.

“You simply can’t let up on safety, at our company we’re about finding ways to have people use automation and technology to not just increase productivity, but also safety.

“Part of this is our ‘unman the mine’ concept which integrate IT and OT, and doesn’t require the same level of workers onsite to operate the equipment.”

Wyllie went on to clarify though that it is not about personnel reduction but making sure the right person, and the right technology, is in the right place at the right time, such as the implementation of online management systems.

Another trend has been the shift in how mining companies are governed. In line with the expectation that mining companies will create value for the communities and customers they are involved with, there would be more community representatives wanting a seat at the table.

The government and the community would both be part of the governance of the mining company of the future, said Areces.

“We were taught that governments in private business are bad, and I believe that concept is somehow changing because of the impact that governments can have to customers, in the community, in the building of societies,” he said.

This was something that could be seen globally, he argued.

“If you take a look at some of the countries in the world, the most important investor in some of the major companies in the world is the government.

“Governments can help mining companies - every time that you have a new mining project you need infrastructure and you have a lot of value creation for the communities and the customers, and it’s important that the government sits at the board of a mining company, for instance.

“I have the feeling that mining companies will have to [increasingly] involve the community and governments into the governance of the company, and I have the feeling that mining companies will have to be more adaptive to the evolution of the market.

As we move into the second machine, which is all about automation and augmenting power and cognitive work, the mining industry is changing, and so are its obligations.

How the mining industry takes advantage of these opportunities is up to it.

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