Monday, March 14, 2016

Are we ready for the brave new world in mining?

Depending on an optimistic versus pessimistic outlook, we seem to be moving toward either A Modern Utopia of H.G.Wells or a Brave New World of Auldous Huxley.

The world is getting more connected with the continued expansion in the use of Information and Communications Technology (ICT).  This includes connecting people, processes, information and technology.

However, are we ready for the transition to this Brave New Utopia?

This connecting trend manifests itself in mining through an increased use of technology to seek to achieve a step change in performance, including better safety, environmental and community outcomes.  To respond to ever-increasing challenges, mining companies have been experimenting with new business models and new technologies to reinvent the way operational processes are carried out.  Different companies use different terms for their vision for the future mine, but all approaches are basically made of of the following key components:

 The resulting changes to mining business capabilities include:

  • Converting from largely mechanical-manual processes to various methods of automation.  This includes tele-operation of equipment through to almost fully autonomous vehicles.
  • Converting from batch to continuous processes.  For example, changing from truck-shovel operations to in-pit crushing and conveying systems, and/or changing from a drill & blast batch process to continuous mining using new rock breaking machines.
  • Implementing remote and/or integrated operations centres as collaborative hubs to monitor and control almost every aspect of the operation.  This includes providing the data and information necessary at different levels of the business and across different functional and organisational boundaries.
  • Reorganising the business processes to enable greater end-to-end integration.  For example, a coordinated supply chain for moving the ore through to a delivered product while providing visibility to all involved parties, including external parties.
  • Developing strategic partnerships with key suppliers to develop new technologies and/or to outsource key parts of the value chain.  Examples include partnerships to develop autonomous haulage trucks, handing off the blasting operation to explosive companies and using external services to monitor equipment health.

These improved capabilities are made possible through the integration of systems and processes that are enabled by the continued expansion of ICT into every aspect of mining operations.  This expansion is accelerating due to disruptive changes in consumer markets leading to media hype around terms such as cloud computing, big data, advanced analytics, social networking, mobility and the internet of things (IoT).

Behind the hype is the continued exponential rate of increase in the available storage, computing power and communication capabilities, which have now reached a level of change that helps unlock new ways of working in any industry, including mining.

These consumer-led ICT trends can sometimes lead to disruptive change, where completely new companies using new business models outperform and disrupt incumbent players.

These trends also create the opportunity for the “plug and play” integrated collaborative environment as depicted by the "connected systems & processes" part of the above diagram.  The barriers are no longer technical, but are mostly cultural.  It will be the ability of organisations to adapt to change that differentiates the leaders from the laggards.

This more widespread adoption of ICT provides opportunities for the Australian mining industry to improve it’s global competitiveness and in doing so these opportunities can also form the basis of growing a METS sector (Mining Equipment and Technology Services).

There are significant efforts by most Australian State Governments and the Federal Government (METS Ignited) to encourage the development of the METS sector, partly in response to both the decline in resources growth projects and the decline in traditional manufacturing industries such as car manufacturing.  These efforts for developing new METS innovation capability need to be well informed of the impact of the ICT enabled transformations in mining and the evolving eco-system of suppliers. 

Not only are all parts of the METS sector active in technology-based innovation, but the METS sector itself is being impacted by disruptive technology.  For example, there is an increasing trend of equipment vendors, technology vendors and engineering project companies developing a services business, often through partnerships.  This trend towards a services model is being accelerated by the proliferation of intelligent sensors in the field, improved data analytics and ability of distributed teams to collaborate and share data and information in a virtual manner, anywhere in the world.

The future of mining will see more technology savvy workers who will drive adoption of new processes.  The operations will shift from a relatively static and disparate set of functions, to a digitally aware, dynamic, automated, integrated and interactive environment, with increased agility, lower operating costs, higher productivity, improved safety and lower environmental footprint.

However, where will these technology savvy workers come from?

One of the foreseeable issues in transitioning to this new paradigm in mining is the likely shortfall in necessary skills and capability.  This potential shortfall was seen as a critical issue during the resource boom and led to a number of “industry skills” studies being carried out in Australia between 2010 and 2012.

It seems to me that this is still a very significant sleeper issue, and one that has been hidden by the recent attention given to "declining productivity", when in fact the productivity trend has more to do with declining ore grades and deeper mines than anything to do with human or equipment capability.

With significant staffing cutbacks in the resources sector over the last three years, along with the retirement of the baby boomer generation, there is almost certainly going to be a significant shortfall in required technology savvy capability when the industry returns to a growth mode.

Some of the issues raised in these studies in 2010-2012, most of which were never addressed in any significant way, are as follows:
  • What are the future industry needs in terms of skills – do we really understand what the industry needs in the next 10 years to properly position for automation and remote operations
  • With the changing nature of mining and greater use of ICT and automation, what changes can we expect to the ‘social license to operate’ between the mining sector, government and the community? Will the increased availability of data also lead to increased regulation? 
  • How much need is there for ICT specialists to understand mining and well as mining specialists to understanding ICT? Is this in addition to a need for dual professionals with T-shaped skills (both mining and ICT) who are at the centre of the “IT/OT Convergence”? 
  • Is there an emerging issue where existing work is based on specialist functional expertise (geologists, engineers, metallurgists, marketers, etc.) whereas the the trend is towards automated and integrated operations? Does this integrated world view need to become part of the training for both mining and ICT specialists? 
  • What are the ICT skills needed by the future site technicians managing automation equipment? 
  • The future remote operators will not have any first-hand experience in a physical mine environment, so how can that deficit in tacit knowledge be made up? 
  • What are the new skills required for the proper use of the future advanced analytical and visualization systems necessary to interpret the increasing amount and variety of operational data (Big Data / Advanced Analytics). 
  • How can we ensure that graduates of operational mining disciplines and ICT are properly equipped to have substantive conversations about the value that new technology can bring to the mining business? 
  • With the current state of the mining industry, are there enough new students starting in the core professional areas of geology, mining engineering, metallurgy and related disciplines?
  • What are the structural changes happening to mine operations and workforce – what template does the mining sector have for managing automation and ICT-centric operations? 
  • What sort of training is needed on well-defined technology futures (the technologies that exist today and which we could foresee as part of the solution) versus disruptive technologies (the technologies are on the horizon that may challenge current operational practices and embedded value chain models)? 
  • What is needed in training young people, who are already proficient at many of the enabling technologies versus retraining existing people in the industry? 
  • Are there different needs from the major mining companies and the SME sector?  Or are there different needs for the METS sector?
  • What are options for up-skilling – including traditional approaches (executive education, graduate courses, undergraduate courses, specialist training courses) and non-traditional approaches (remote training, massive on-line open courses or MOOCs)?  What role can ICT play in changing the way training and education is delivered? 
  • What is the training needed to understand the difference between project management and governance of mining projects versus large scale ICT and automation projects? 
  • Open innovation – who do you cluster with? What is the opportunity cost in corralling/protecting IP as opposed to the possible multiplier effect generated by open-source/crowd sourcing solutions? 
  • How can the business and higher education sectors collaborate better to ensure better students are attracted to the industry? 
  • What other industries (e.g. agriculture, petroleum, military) have similar challenges and may have some of the solutions? 
  • What are the key stakeholder groups that need to be involved and aligned around these questions? 
  • How can we maintain a dialogue on the shared challenges faced by the industry? 

So who is actually doing ANY planning around these topics?

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