June 2016

Mining’s new boom

  • By Christine Gibbs Stewart, CEO, Austmine

How the mining equipment, technology and services sector will help drive the sustainability of the minerals industry

Fast-forward 20 years and picture what a mine will look like in Australia. Will it have people in it? Will it be just a small hole in the ground with a remotely guided robot undertaking precision extraction? Or will most mining take place in an urban setting and involve secondary metal recovery from things that are thrown away on a daily basis?

For the mining equipment, technology and services (METS) sector, thinking about the future is an important part of how we will meet future customer demands. But in such a stressed environment, more pressing issues continue to consume our immediate focus. Finding the right balance is the key to building long-term sustainability for the METS sector and the mining industry as a whole.

The METS sector is an important contributor to the Australian economy and a significant employer, with over 350 000 workers across Australia. According to a 2013 Austmine survey, the METS sector contributes around $90B per annum in revenue to the economy, a large proportion of which comes from exported products or services. According to a 2015 Austmine survey, the METS sector is one of the most internationalised sectors in Australia, with approximately 66 per cent of companies exporting products and services and a footprint that extends to every corner of the globe.

The growing recognition of the independence and importance of the METS sector was illustrated by the federal government’s 2014 announcement that it was one of five sectors that would receive funding to establish an industry growth centre, which has now been formed under the name METS Ignited. This exciting initiative puts a sharp focus on the sector and expands the thinking on the value of our mineral wealth from the actual rock being extracted to the high-tech inputs and value-added services. From a policy perspective, this is an important shift as it recognises that the sustainability of our minerals industry lies within the METS sector. From an economic perspective, it helps to turbocharge an industry that is one of Australia’s key competitive advantages and is a global leader in many aspects.

Australian METS companies are known around the world for their expertise in both open cut and underground mining, with a strong focus on innovation and technology, safety and environmental awareness. They are recognised as problem solvers and providers of best practice solutions, with many companies seen as world leaders in their particular niche. With current commodity prices forecast to remain the norm for some time to come, this reputation will be needed here and overseas to ensure the future competitiveness of METS companies. Coupled with some of the finest researchers, scientists and strategic minds globally, we have built a strong foundation for the future.

A new perspective on innovation

While innovation is certainly key to improving productivity and addressing future demands, there are several systemic barriers when it comes to innovation and technology adoption and utilisation.

Many miners have made reference to the need for better utilisation of existing technologies, particularly following the furious investment phase of the mining boom. At the International Mining and Resources Conference in November 2015, Anglo American’s Technical Director, Tony O’Neill, noted that challenges within the sector generally came from adoption and system issues as opposed to a pure lack of technological innovation.

A challenge for METS companies has been ensuring that miners use their technology, equipment or systems to full capacity once installed on the mine site. A lack of training, personnel changes and cultural attitudes all contribute to a high-tech piece of equipment not being used to its optimum capability following installation. Therefore, the recognition from miners that they need to get ‘fit’ and be smarter on site is good news for METS companies, provided that it filters through the ranks and is enforced from the top.

The best industry-wide example of underutilisation is that of data, or ‘big data’, given the large volume collected daily by mining operations. Every mine site around the world gathers vast quantities of data in a variety of formats, ranging from driverless trucks to manual sampling orebody data to video imagery from drones or surveyors. The major challenge for the industry, METS and mining companies alike is how to process, prioritise and act upon this data from both an operational and strategic point of view.

Along with the opportunity for METS and mining companies to tackle the productivity challenge via better utilisation of existing equipment and technology, the need for new innovation remains critical. The federal government’s ‘Ideas Boom’, which is part of the National Innovation and Science Agenda, is a call to action to encourage greater innovation across the board. The METS sector is a leading light in this regard, with new innovations being launched by Australian METS companies on a regular basis. In Austmine’s 2015 survey, 63 per cent of METS companies reported that innovation was core to their business strategy and 81 per cent reported that they launch a new product or service continuously or every few years. One example of a leading innovator is a relatively new company called Vayeron. It has developed an intelligent conveyor roller monitoring system that predicts and reports potential failures, significantly reducing downtime and maintenance costs while improving safety. Another example is the WA company Safescape, which designs and manufactures the Laddertube, a state-of-the-art escapeway system designed specifically for use in underground mines that is unaffected by water, salt or other mineral deposits.

However, many innovations fall by the wayside early in their development due to a lack of on-site testing opportunities, difficulties in accessing decision makers, a shortage of potential commercial partners and an inability to obtain funding. To help address some of these issues, Austmine introduced the Innovation Mentoring Program, which is sponsored by METS Ignited. It is a program that mentors individuals with the aim of creating the next generation of innovators. Demand for this program was exceptionally high, and it pairs expert and experienced innovators from within the mining and METS sectors with new and aspiring METS innovators. The program began in February 2016, and the first round will wrap up in July 2016. A second round is planned to be rolled out in late 2016/early 2017.

The urgent need for industry collaboration

Austmine’s 2015 survey showed that 32 per cent of METS companies viewed increased collaboration throughout the supply chain as fundamental to thriving and surviving in the mining downturn. However, at the time that the survey was conducted, only 39 per cent of companies reported that they were actually collaborating with other organisations on research and development (R&D). These partnerships ranged from METS companies collaborating with other METS companies, mining companies and universities and research institutes.

In a recent webinar held by Austmine on Commercialising R&D featuring CRC ORE, Curtin University, Federation University, the Minerals Research Institute of Western Australia (MRIWA) and the Newcastle Institute for Energy and Resources, the urgent need for increased collaboration with industry became even more apparent. Exciting projects coming out of research institutions include Federation University’s bucket elevator systems, which extend the current reach of about 300 m to 1000 m, allowing for the continuous vertical hauling of material from underground. In addition, Curtin University is working to develop a carbon meter to monitor the levels of activated carbon in gold circuits. This is currently being trialled at Sunrise Dam with AngloGold Ashanti, demonstrating the support for important industry projects at an early stage of development.

Organisations such as CRC ORE and MRIWA exist as research collaboration facilitators or gateways to research funding. These organisations are not being used to their full extent by METS or mining companies at a time when the sector should be innovating to ensure that it remains competitive and sustainable.

Many of Austmine’s members have demonstrated that collaboration is key to success, for example:

  • Puma Energy and Banlaw have teamed up to offer a comprehensive fuel provision and management solution with fantastic results
  • Rockwell Automation has long partnered with Cisco (among others) to provide an end-to-end offering to clients
  • Schenck Process and Sandvik signed an agreement in March 2016 aimed at improving customer service and the performance of crushing plants through a greater understanding of mining customers’ equipment.

One of Austmine’s core values is collaboration, and we are breaking new ground this year with our Collaboration Laboratories, or Co-Labs. The Co-Labs are a series of strategic one-day workshops focused on a different industry challenge that bring together 30-40 key stakeholders from the METS, mining and research sectors to discuss, unpack and devise solutions. A thought-leadership paper will be produced from each Co-Lab, jointly authored by the participants. The first of our Co-Labs will be held in Perth, with others being rolled out nationally during the year.

Taking Australian METS companies forward

With a general consensus that current market conditions are likely to remain as they are for at least the next few years, METS companies are rethinking and reinvigorating the way that they do business. 

METS companies must be nimble, continually adapt to shifting customer demands and service their clients in more effective and efficient ways. Austmine has seven experienced Business Advisers working nationally to deliver the Entrepreneurs’ Programme, a federal government initiative. This program provides one-on-one assistance to help companies improve their operations. Getting fit in a time like this is not only good for mining companies, it is necessary for METS companies as well. 

While opportunities do still exist within the mining sector, projects are fewer and of smaller value than they were before. The focus on operational expenditure, with the enormous workload placed on Australia’s bulk commodity mines over the last two to three years, provides an opportunity for maintenance, engineering, predictive analytics and analysis and operational asset management solutions and technologies. Companies that can help mining companies to manage their overwhelming energy costs (energy is the second-highest cost of any operating mine site, behind labour) – whether through fuel efficiency, fuel additives, renewable energy sources or energy-efficient equipment or components – will also still find a demand for their products or services.

Opportunities abound internationally, and we have identified Latin America, particularly Chile and Peru; Canada (with its shift from underground to open cut mines); India and parts of South East and Central Asia as the best prospective regions for Australian METS companies over the next two or so years based on projected project spend. As previously stated, more than 65 per cent of Australian METS companies now export their products and services, with many relying heavily or almost solely on their export revenue for survival. With the current Australian dollar, Australian METS companies are becoming more competitive, and pursuing offshore opportunities will aid in long-term sustainability.

Austmine is currently working with METS Ignited on a ten-year METS Sector Competitiveness Plan. This important piece of work has involved feedback from METS companies and miners, leveraged sector development work and explored worldwide trends and current and future societal needs. The plan will provide a blueprint for ensuring that the METS sector remains at the forefront of technological achievement and continues to be a leader in the minerals industry.

Our vision is for Australia to be the METS global innovation hub. The mining boom is certainly not over – it has just entered a new, exciting phase.  

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