Modern mining has implications for defence

Posted: 27th Nov

Australia's miners are finally changing the common perception of a mine worker as somebody with a pickaxe and a lamp in his helmet. For a start, he might actually be a "she", and she might be working in a downtown office in Perth, remotely controlling driverless trucks weighing hundreds of tonnes at a mine 1000 kilometres away.

Even the definition of the mining business has changed, according to Gavin Lind, executive director Workforce Skills, Health and Safety at the Minerals Council of Australia. Although the sector is based on the extraction of mineral ores, mainly coal and iron, mining is actually an end-to-end logistics business.

"When you look at it objectively, it's about moving something from one place to another, be it from the ground in the Pilbara, on to a train, to a port and onto a ship. It's a logistics exercise, but there's a massive value chain that sits before, after and during [the extraction process]," Lind said.

The mining industry itself is supported by a massive Mining Equipment Technology and Services (METS) sector; together they directly contribute $133 billion a year in economic value and support 484,000 full-time equivalent (FTE) jobs.
 
The minerals industry and resources sector generally is being transformed by the need to streamline that end-to-end business, Lind says. It invests about $3 billion a year in R&D, or about 16 per cent of Australia's total business R&D expenditure, and a further $1.6 billion on minerals exploration. Investment has focused on automation, remote operations and big data.

Companies like Woodside Energy demonstrate that those same three technology drivers are affecting offshore oil and gas firms. The company's Plant of the Future goal is to bring costs down to $US500/tonne per annum of installed capacity. Data analytics is transforming both exploration and plant management, while a major investment in 3D printing has the potential to save more than $100 million of spares inventory.

These technology areas overlap and Rio Tinto pioneered automation and remote operations in mining. The Rio Tinto Centre for Mine Automation (RTCMA), established in 2007, is based in the University of Sydney's Australian Centre for Field Robotics.

The sector was boosted on October 20 when the CRC for Optimising Resource Extraction (ORE) launched its new Kalgoorlie-Boulder Mining Innovation Hub. This will develop new mining technologies to revolutionise the way gold, nickel and other mineral deposits are exploited for maximum profitability and minimum environmental impact, says Clytie Dangar, the CRC's general manager stakeholder engagement.

Risk-averse sector

One of the sector's challenges is increasing yield from complex ore bodies. A role for "big data" in this sector is mapping and visualising the structure and composition of ore bodies and then simulating an end-to- end extraction process to optimise yields and profits. And if that means borrowing technologies from other sectors, she says, that is fine.

The waste industry has very efficient sensors to assist with separation of solid waste streams; these could be adapted to improve the efficiency of ore separation and so reduce the need for capital investment in downstream processing, for example.

A mine can support a local industrial and research ecosystem, unlike offshore oil and gas where exploration and extraction platforms are moved around the world and expertise is usually concentrated in the hands of a few very large specialist firms. While there's no alternative to building mining infrastructure in Australia, oil rigs are like ships – they get built where it's most cost-effective.

That makes it harder for local equipment manufacturers to break into a risk-averse sector whose supply chains are dominated by global giants in cities like Houston, Paris and Yokohama. The bar is high for Australian manufacturing firms in the global market, says Chris Williams, managing director of HI Fraser, which services the defence and offshore oil and gas sectors.

Deep customer and market knowledge, technical expertise, ISO9001 accreditation and effective health and safety policies are simply the norm in this sector. The key is differentiation, so in HI Fraser's experience "build to print" is not the answer – customers seek value. HI Fraser is able to design, build and support multiple high-technology components for a single customer more efficiently than the customer can do it himself. It can do this because it owns the value chain in its own business, he said, from R&D and design at one end, through assembly, testing, metrology and post-sales maintenance.

And unlike the defence market where decision-making is slow, the oil and gas sector understands the financial cost of losing a day's production. Decision-making is fast, Mr Williams says, and favours suppliers who understand the market and who can save the customer real money by offering an engineered solution, not just a commodified service.

As new technology and tools become cheaper and more accessible, the industry and its workforce will change, says Gavin Lind. Australia's 200,000-strong minerals workforce is the most productive in Australia and will only become more so. It will also include more women who have formed a fairly constant 13 per cent of the total for years, he adds.

"The opportunity here is to broaden the workforce make-up. It's far more attractive for a mother of two to be able to drive a truck from an operations centre in Perth than it is to do a FIFO into the Pilbara, for example. Imagine someone with a disability – this opens up a brand-new opportunity for them to do the very same thing: do it from an operations centre out of Perth and then your disability is not a barrier to you being able to participate." 

Gregor Ferguson - Financial Review - http://www.afr.com/news/special-reports/defence-capability/modern-mining-has-implications-for-defence-20171030-gzbber