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Mining Automation: Adapting to the changing face of resources

and its accompanying disruptive technology is changing the face of mining

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

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

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

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

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
“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

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

“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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