Planning for a mining tech boom

Australia's resources sector is in many ways the envy of the world but this engine of our economic progress isn't exactly seen as a hotbed of activity when it comes to innovation. That perception is perhaps to some extent justified because the sector hasn't traditionally been at the forefront of tech adoption, apart from the deployment of larger, better equipment.

The mechanics of the business have essentially remained unchanged with facilities strewn across desolate landscapes where hardy souls fly in and out to earn their keep. However, IT is now an integral part of the industry and the heavyweights are in fact making progress on measures that could change things forever.   

The business of stripping riches out of the earth can be a lonely affair and it's also a dangerous one. That's why good labour doesn't come cheap. One way to cut the human factor out of the equation is automation and while the idea of mines run by robots may sound far-fetched, we already have the technology to make it happen.

Ealier this week mining giant Rio Tinto announced further expansion of its “Mine of the Future” program.  Rio already owns the world's largest fleet of driverless trucks after it signed a deal with Komatsu Limited last year and the miner has just invested $US518 million to bring driverless trains to the Pilbara. 

The first driverless trains are expected to begin work in 2014 along Rio's 1,500 kilometre network and will be controlled from a room in Perth, 1,500 kilometres away. The miner has also expanded trials of new shaft and tunnel boring systems, which also involve automaton, and the deployment of digital technology  to improve mineral recovery. Rio isn't the only miner with its eyes on automation, with BHP Billiton and Fortescue both working on plans. However, Rio does have a substantial lead on its rivals.

It's hard to deny the productivity and safety benefits of this technology which allows miners to tackle the twin banes of skilled labour shortages and high wage costs. With resource extraction set to get even more remote in the future remote technology may in some cases be the only means of running an operation. It does, however, open up a can of worms on the IR front. The automated trains will cost jobs which in turn will enrage the unions. Like any technology, automation has its pros and cons. There are clear benefits when it comes to miner safety and output efficiency. It does cost jobs but also creates new opportunities in maintenance and control operations. 

Another important point of consideration is that Rio's vision requires enormous investment and the miner has already poured millions into the project and will no doubt spend a lot more. Wholesale commercialisation of automation technology is easily decades away, but for big miners the focus is to gain a competitive advantage in the space. Rio has already laid down the foundations for future-proofing its operations.  

The sort of money laid down by Rio to future-proof operations is well beyond the reach of most in the sector, but that doesn't mean that IT can't make a difference.

Increasing productivity doesn't necessarily mean having to deploy robots, in fact for most miners, engineering and construction firms, having an effective Enterprise Resource Planning (ERP) system can be the best productivity driver.

The commodities boom has led to a massive growth in the mining services industry but the majority of companies are still running their systems the old fashioned way.

According to ERP software provider IFS, a number of these companies, especially in the engineering and construction market, are growing quite aggressively but have no ERP systems in place.

“Basically a lot of them are very immature as far as systems are concerned and it's a very immature market,” says IFS Australia and New Zealand managing director Rob Stummer.

That's surprising because with the volume of work growing at an astronomical pace, losing track of your work processes is akin to shooting yourself in the foot. Taking control of the ERP process is the first step in improving resource allocation, boosting efficiency and reducing project risks.

For outfits like IFS, Australia is the land of opportunity especially in the lower end of the scale, where mining services firms don't have the money to engage an SAP or Oracle.  

Robots and automated systems make great headlines and certainly point to where the resources sector is headed but for most organisations in the space the road to the future starts with a push to more streamlined enterprise systems , with a particular emphasis on data analytics , to derive productivity benefits and manage risks.