Earlier this year Rio Tinto moved its 100 millionth tonne using automated trucks which have clocked up over one million kilometers.
Rio Tinto is aiming to have more than 40 trucks operating autonomously across three sites in the Pilbara by early next year.
Such a milestone proves automation is here to stay; its importance in the new mining landscape is becoming increasingly clear as miners attempt to improve productivity and reduce costs.
Gold prices have plummeted in the past six months, coal margins are being squeezed, and iron ore prices are proving to be temperamental, forcing miners to implement tough spending regimes, squeeze every last drop out of capital expenditure budgets and go in search of operational efficiencies.
On the back of uncertain market conditions, looking for the elusive ‘game changing’ technology is now more important than ever.
“Coal is a business that 12 months ago was in a very good place, but now it’s in a very hard place,” Accenture mining program and project manager Nigel Court told Australian Mining.
“We’ve seen a lot of decisions made by our clients around getting themselves to a profitable place, or a cash flow positive place.
“That’s also driven capital scarcity.
“That constraint has impacted every commodity.”
He explained that implementing technology in a spend-thrift environment is the real clincher.
“The challenge is when times are tight they need to continue to invest to get the benefits when they move into the upside of the cycle,” Court stated.
He said particularly across the larger, diversified miners which have a choice about where money is spent there are “a lot more internal battles for that capital” and increased “pressure from the market place about whether that capital gets returned to investors rather than invested in future operations”.
“That’s been very healthy; what it’s started to drive is great decisions about where capital should be deployed for the greatest benefit of the business,” he said.
In some cases that fight for capital is translating to automation investment.
Court said miners aren’t automating for automation’s sake, instead the majority are looking at the return on investment.
“There’s a longer, harder look at what the business case is and what the value associated with it looks like,” he said.
Court urged the mining sector to look at longer term commodity price trends when determining what their mines should look like, ideally producing more tonnes within the same fixed cost base.
“There’s lots more discussion about what is the right cost model for this operation in a brave new world,” he said.
Miners are traditionally conservative when it comes to implementing new technology into mining.
“It has been an historical issue and has a lot to do with the cyclical nature and the reactionary decisions,” Court said.
Bucking this trend, BHP Billiton fast tracked the modernisation of its Pilbara iron ore division, launching its new remote operation centre in Perth earlier this year.
The move was an attempt to reduce contractor spending.
The centre’s launch added to the growing trend of mine site automisation and remote control initiatives with mining and logistics work in the Pilbara increasingly being controlled in Perth.
Rio Tinto already runs a similar operation out of Perth Airport and Roy Hill Holdings is also developing a remote operation centre for its iron ore mine, port and rail project.
Earlier this year BHP said it will focus on automated equipment and new technology as it moves toward “next generation mining”.
Court said “leadership needs to own these [automation and remote operating centres] as the new operating model and sponsor it into the business because it changes the way mining is done”.
BHP vice president of mine optimisation Gavin Yeates said in March the company was looking to new technology to improve its business.
“We are piloting and introducing new technologies in selected assets including integrated remote operating centres, autonomous haulage, autonomous drilling and different ways of evaluating and modelling ore bodies,” he said.
“We're actually at the cusp of moving to what we're calling 'Next Generation Mining'. This is driven by technology advances in autonomy and sensing. That coincides with a drive for growth in far more complex, deeper, lower-grade ore bodies.”
Technology consultancy firm Accenture told Australian Mining that the implementation of automation is not playing out how the company expected.
“Where we thought it [automation] would go, and where it is going is a little bit different,” the company said.
Remote operation and control centres
Now is the time to invest in productivity and technology to reap the benefits when the cycle flips.
But Court warns miners need to generate value and have control mechanisms in place to ensure budgets aren’t blown when implementing automation and centralised control initiatives.
Spending for the sake of completion is not the right mindset; rather Court said it is much more beneficial to spend with value in mind.
He said looking at the value proposition, business case, return on investment and putting metrics in place to hold the business accountable and measure performance are key.
“The value comes from increased production, consistency of production performance and consistency of maintenance,” he said.
Court added the challenge with developing control centres is that they require transformational change from the business.
“Centralising all of your key decision makers around supply chains and maintenance bases takes some thinking about how you do that and execute, how you pick the right people, where you should centralise, as well as challenges around finding a facility that can be set up appropriately,” he said.
“It requires the business to make some big decisions at speed.”
New heads, new ideas
This year has brought with it a changing of the guard at the helm of major miners, with Rio, BHP, and Anglo American among those with new bosses.
Court told Australian Mining the new blood has been a good for technology in the sector.
“They understand that doing mining the same way they’ve done it for the last 20 years is not the way to create a high performing business,” he said.
Court said new management is now looking within their respective organisations, consultancy firms and non-mining businesses to “provide innovative ideas that they can leverage”.
Employee training is one area that is currently being shaken up in the mining sector with the rise of online learning, real time collaborative approaches and simulated learning.
Court explained the future mining model is centralised and allows for increased access to talent but the challenge for miners is to understand that with centralisation the decisions around the mine’s plan sit centrally, not locally.
Lower skilled workers and unions have both expressed concern over job security and safety standards when it comes to automating mine sites.
“Jobs change on site but they don’t necessarily go away,” Court said.
“When you move to an autonomous truck there’s no longer a truck driver there but there still needs to be a person around.”
For example when a proximity detector is activated the truck will stop, the only way that it can be restarted is by an operator who has to go to the truck, check it and manually restart it.
“There are new roles that are emerging inside the business around autonomy,” he said.
“The value is not a people out proposition; it’s a production, efficiency, safety and most importantly reduced maintenance costs [proposition].”
Maintaining a plan
Having very few unplanned events in a mine “is the dream” which “is not your typical mine at the moment,” Court explained.
And thus the age old debate over producing tonnes and maintaining equipment erupts.
“Planned maintenance is six times cheaper than unplanned maintenance,” Court claims.
When commodity prices were reaching for the skies operations were focused on tonnage, creating a mentality across Australia’s mine sites to mine at any cost.
“There was a whole mantra around ‘I don’t care what it costs to move tonnes’ [and] ‘get as much out as you can’,” he said.
"In the past miners focused simply on being the biggest of the lot, but now this has changed; they are focusing on being the best, the most efficient, the most optimised," Schneider Electric's solutions vice president for mining, minerals and metals (MMM) Diego Areces told Australian Mining.
Court said “the environment is changing” and the “world where there is endless access to capital and costs don’t matter,” is gone.
But changing such an engrained culture is a tough feat; Court explains that establishing a control centre is one way to shift mind sets.
“It provides one place where you change the dynamic around how decisions are made,” he said.
Closely looking at the metrics around performance is another way to implement technological change in mining houses.
Control centres allow miners to enhance internal communication because maintenance, production and shift plans are all devised and executed centrally.
Consistency is vital for a high performance business, he advised.
Automation for everyone?
“We thought when automation appeared a few years ago we’d see a mass shift to full automation across as many processes as it possibly could,” Court said.
He said previously he thought all drill and blast activities would be done by an autonomous drill, all haul trucks would be autonomous, we also thought that we would see an extension into shovels.
“That’s not how it’s worked, what we’re seeing is a combination of [automation and manual processes],” Court said.
“Automation works very well in a controlled environment,” like for example pre-stripping where trucks follow the same path all day, Court explained.
“Where it has struggled is when it has been a less in control process," he said.
“Where there’s variability, multiple decisions to be made.”
Implementing automation is also halted by challenges around establishing technical infrastructure, including in-pit networks, in an environment that is continually changing.
“The vast majority of mines are existing mines, so you have to work out which pieces of technology are going to fit,” Court stated.
“The people that have invested early understand very well how autonomy is going to be useful to them – where they deploy it and where they don’t.”
He stated that when bringing all the pieces together to establish a state-of-the-art mine “the control centre is where the biggest value is right now”.
“You’re collecting in one place the plans, decisions made and outcomes associated with that,” Court said.
Taking that information to find out why miners aren’t being as efficient as they could be and applying that information to “enhance productivity, reduce your costs and increase your throughput”.
“The solutions need to address a problem as opposed to playing with technology for technology’s sake,” he said.
Great ideas are ones that add value to a business.
Court said the mining sector needs to invest in great ideas, because they can potentially save companies millions.
“We’re certainly seeing signs of it; large diversifieds are looking at technology as a way to lever value moving forwards,” he said.
“We’re seeing automation being executed, tested, trialled and some of those businesses trying to work out where it will work for them and where it won’t.”
Along with Rio and BHP, Brazilian mining giant Vale has also flagged a focus on new technology.
Last year news emerged Vale was working on removing trucks from its largest iron ore mine, Carajas Serra Sul S11D.
The company also released details about a project using 'copper eating' bacteria to mine mineral waste.
Gold miner AngloGold Ashanti is piloting a new automated drill and blast project which purports to stop all blasting activities and creates unmanned stopes at its Tau Tona mine located in South Africa, west of Johannesburg.
Launched in 2010, the automated technology isn’t an entirely new invention, but rather it utilises advances around drilling and backfilling processes in an innovative way, unlocking about 100 million ounces of gold that couldn’t be mined conventionally.
AngloGold said for real value to be achieved the challenge now is to amalgamate all the activities into a consolidated system.
Almost three years on the program is showing promise and is expected to allow the company to realign its focus on revenue whilst keeping the site open year-round.
Already the pace of tunnel boring has increased almost seven fold, from three metres a day to 20 meters and the advancements are designed to eradicate the need to leave large pillar areas unmined in order to assure safety.
Although the automated operations have not been without its critics, AngloGold chief executive Srinivasan Venkatakrishnan (Venkat) explained.
“A number of people were sceptical about the ability of technology to improve the long-term viability of the South African mines and we have started to prove them wrong,” he said.
O’Neil added that the new technology is also well suited for platinum mining operations and the company will be looking at implementing it across a number of additional sites.
“We’re able to get a good tonnage of gold from the areas where we are using the new technology and we’re currently expanding the technology to other areas within the South African mines,” Venkat said.
“We believe getting that right is not just going to benefit AngloGold Ashanti in the future, but it is going to benefit the mining industry generally and, importantly, provide employment for longer for our South African workforce.”
To date the company has spent between $30 to $40 million on the new non-blast technology.
Putting the numbers into perspective, the new technology is expected to add another 30 million ounces to the company’s South African reserve base.
AngloGold Ashanti executive VP Mike MacFarlane recently told the Investing in African Mining Indaba in Cape Town that the technology opens up "mouth-watering grades" of 25 g/t from depths of five kilometres.
It also speeds up the process, with no additional infrastructure investments required the automation allows mining to be done in one fifth of the time.
“We could be turning what appears to be a sunset industry into a sunrise industry. We believe that if we get this right, we could actually change the mining paradigm for deep hard-rock underground mines globally,” MacFarlane said.
South Africa has some of the largest and deepest gold deposits globally, but significant amounts have had to be left in shaft and stability pillars because blasting disturbs ground conditions and creates seismicity.
Eradicating blasting and taking people out of the danger zones with automated technology not only mitigates risk it also delivers a hefty return to investors.