The evolution of the industry, its opportunities and how best to equip the energy and resources sector of tomorrow
The natural resources industry has long been a dominant player in Australia’s economy. Mining and related services employ more than 380 000 people. The industry accounts for 50 per cent of the nation’s export earnings, with the top 40 sector companies alone producing more than $400 billion in annual revenues (ABS, 2016).
However, we have entered an era of extreme volatility in commodity markets, coupled with increased operating costs, leading to huge demands on efficiency measures within organisations.
On top of this, the sector is facing more than $425 billion in economic impact from digital transformation for the industry, customers, society and environment over the next decade (to 2025). This is the equivalent of 3-4 per cent of industry revenue during the same period. It will also see a reduction of 610 million tonnes of CO2 emissions, with an estimated value to society and environment of $30 billion, and an improvement in safety, with around 1000 lives saved and 44 000 injuries avoided. This equates approximately to a ten per cent decrease in lives lost and a 20 per cent decrease in injuries in the industry (World Economic Forum, 2017).
The mining sector has experienced declines in productivity of more than 33 per cent over the past ten years. In order to cut costs, many companies have reduced staff numbers, maintenance and capital expenditure, all of which are short-term solutions. Future gains in efficiency and competitiveness will be driven by adoption of innovative technologies and processes.
More recently, there has been a degree of cautious optimism within the industry.
In their Tracking the trends 2017 report, Deloitte noted that:
Commodity prices, while volatile, are on the rise, and financing, while still not widely available, is picking up. To position themselves for sustainable growth, miners must be willing to explore and invest in strategies to help them continually improve operations and enhance shareholder value. (Deloitte, 2017)
As they say, necessity is the mother of invention. And the Australian mining industry is rising to the occasion, since it has no choice, and is becoming increasingly adaptive and resilient.
At the Sydney Mining Club luncheon in June 2017, Newcrest Mining Managing Director and CEO Sandeep Biswas said:
In Australia, the mining industry is three times bigger today than it was a decade ago. Employment is nearly three times higher. And resources exports are expected to reach record levels in this financial year. (Newcrest, 2017)
So, considering the significant change facing the industry, what does the resources sector of tomorrow look like, and where do the employment opportunities lie?
As an open innovation platform for the global resources sector, Unearthed believes in harnessing the power of entrepreneurship to transform individuals and communities, to create economic opportunity and to address worldwide challenges.
Since 2014, through our international program of hackathons and online competitions, over 2500 innovators have tackled over 60 industry challenges and produced over 200 prototypes that have already made significant and measurable impact on its partners’ bottom lines and generated prospects for participants.
During the recent Austmine 2017: Mining’s Innovation Imperative conference in Perth, there was a major focus on the extraordinary amounts of data being collected by miners and how best to make use of it.
Previous Unearthed hackathon participant and current Managing Director of PETRA Data Science, Dr Penny Stewart, showcased several case studies during her ‘Silent Music: Mining Case Studies in Machine Learning’ presentation at Austmine 2017.
Through one of these case studies, she explained how the Unearthed Brisbane 2016 hackathon led to Newcrest Mining partnering with PETRA Data Science to deploy semi-autogenous grinding (SAG) mill overload downtime prevention algorithms at Lihir mine.
In his address to the Sydney Mining Club in June 2017, Newcrest’s Sandeep Biswas spoke about how this data science collaboration with PETRA has eliminated mill overloads at Lihir:
At Lihir, our three mills had been experiencing multiple overload events each year, resulting in significant downtime. Traditional engineering-based approaches had failed to adequately identify when overload events would occur. Over 360 million lines of data across 130 variables were collected,and by cross-referencing this big data, the PETRA team was able to identify causal factors and develop machine-learning algorithms which could predict future outages. By May 2017,four months following the introduction of the algorithms to Lihir’s three mills,no overload event had occurred. (Newcrest, 2017)
With industry employment opportunities rapidly increasing over the past five years, data scientists will continue to play an important role inthe resources sector.
University of Queensland Masters student Arun Prakash won second prize at the Unearthed Brisbane 2017 hackathon. At the event, Arun and his fellow participants heard from Dr Penny Stewart and this introduction lead to Arun securing a data scientist role with PETRA, which according to Arun would not have been possible without attending Unearthed Brisbane.
The Unearthed Brisbane 2016 hackathon resulted in a data science job for Huyen Nguyen as well. Being fresh out of graduate school, she was looking for opportunities and was hoping to network with people and gain an insight into what hackathons were all about. Luckily, the first person she spoke with was John Vial; a well-connected hackathon veteran. John referred Huyen to the Chief Data Scientist at global multi-disciplinary management, engineering and development consultancy Hatch. That introduction lead to an interview, after which she landed the job.
Another future trend is the massive shift in the nature of mining work from today’s human and machine-centric design to tomorrow’s computer-centric design. There is going to be an increasing push to automate many roles performed by people, due to safety, productivity and consistency-themed operational pressures, along with the rise in algorithmic and data-driven decisions.
South32 Chief Technology Officer Ricus Grimbeek said that Unearthed provides a great opportunity to tap into creative minds and explore new ideas that can help optimise their business. He noted that South32 sees technology as an enabler for the next wave of safety and productivity improvements across their business.
Although there may be less human ‘doing’ in the future, there will undoubtedly be more human creation, meaning people can concentrate on more valuable activities, such as decision-making based on the streams of data being analysed by data scientists and strategic thinking.
Future mining will also involve an increased need for interdisciplinary collaboration.
Over the past two years, Unearthed has partnered with Newcrest Mining, which has resulted in the mining giant deploying numerous data science solutions in collaboration with the data science and start-up communities. Sandeep Biswas noted that the company expected these to increase their asset productivity and generate tens of millions of dollars in additional value for Newcrest (Newcrest, 2017).
Gavin Wood, Chief Information Officer at Newcrest Mining, echoes the sentiments of Biswas, saying that the collaboration is a continuation of a great partnership that draws in the wisdom of the crowd:
Collaboration is an important part of our approach to innovation at Newcrest and is going to be key to super-charging the innovation effort within the mining industry, to enable us to succeed amidst ever more challenging operating conditions facing the industry. The work that is done in the room over a hackathon can have a real impact on what we do at our mining operations.
Seeing as change is faster than ever before, tomorrow’s industry careers will necessitate professionals becoming lifelong learners.
Barrick Senior Innovation Director Andrew Scott has said:
We’re seeing a number of comments about the rate of change and I think the key competencies will be around that. Roles will change more frequently, so we need to make sure people have the skills to adapt to that change. (Dyson, 2017)
Tom McKeon has participated at multiple Unearthed hackathons, including the Perth-based MineHack in 2016. Since participating at this event, he has secured a job at BHP – an opportunity made possible by the hackathon:
The hackathons gave me the opportunity to look inside BHP and other resource companies. This helped me find my current career in technology, as prior to that I was planning to be an electrical engineer. I discovered a passion for solving problems with data-driven solutions that deliver a large impact. Even now I utilise the learnings and practices from participating in the hackathons in my day-to-day job.
Unearthed Co-Founder and Director Zane Prickett offers a novel outlook on the future of mining employment (adapting a Jeff Bezos quote):
If you want to build a successful, sustainable career, don’t ask yourself what could change in the next ten years that could affect your career. Instead,ask yourself what won’t change, and then put all your energy and effort into those things.
In addition to careers with digital skills such as data analytics, Unearthed believes in the opportunities that entrepreneurship will afford the industry. We understand the role of start-ups as a change catalyst, as they have the right structure, methodology and tools to quickly test hypotheses about new technologies and business models in a market. They are able to fail fast and often on the way to finding what works.
According to the Australian Innovation System Report published by the Office of the Chief Economist in 2015, entrepreneurs mobilise ideas, people and resources to act on business opportunities. Their activities, wreaking disruption and creative destruction, can affect the economy in ways which lead to employment growth, new products and services, as well as different ways of doing things. Australia’s high rate of start-up activity is at the heart of our employment growth.
Through a six-month long mentor-driven Accelerator Program that commenced in July 2017 at River City Labs in Brisbane, Unearthed will support entrepreneurs to build sustainable businesses with commercially ready products to reach global markets. This year, six exciting teams of entrepreneurs have been accepted into the Unearthed Accelerator; three local startups have been joined by three teams from both domestic and international locations.
From testing the Accelerator Program model last year, start-up Newton Labs emerged and won a WA Young Innovator of the Year Award for its work in assisting a global mining heavyweight with the challenges of large boulders blocking primary crushers at its iron ore operations. Newton Labs developed a novel sensor and analytics package, and is now using its technology on mine sites to report on particle size distribution and prevent oversize material from blocking the crushers, delivering significant savings to the mine operator.
We cannot afford to ignore the investment we have already made in our natural resources sector, and the comparative advantage it represents. An innovation platform based on the sector is our opportunity to lead, rather than follow. Australia can be the resources innovation hub of the world if we commit to building the programs required to support and scale new ventures here.
The potential long-term economic contribution stemming from accelerators is significant. Technology start-ups with the right support, networks, and funding have the potential to become a major source of growth in Australia. A recent PwC report states that technology start-ups have the potential to contribute $109 billion, or four per cent, of GDP to the Australian economy and 540 000 jobs by 2033 (Riccio, 2013).
In his 2013 book The New Geography of Jobs, Enrico Moretti said:
Innovative industries bring good jobs and high salaries to communities where they cluster and their impact on the local economy is much deeper than their direct effect. Attracting a scientist or software engineer triggers a multiplier effect, increasing employment and salaries for those that provide local services. In essence, a high-tech job is more than a job…research shows for each high-tech job, five additional jobs are created outside the high-tech sector. (Moretti, 2013)
At Unearthed, we aim to create 50 new start-ups in five years. These start-ups will introduce technologies that will improve the competitiveness and efficiency of our resources sector partners. We believe this is the fastest and most cost-effective way to introduce new technologies to the resources sector, as well as the best way to support new resources technology start-ups.
Details on Unearthed and its global open innovation program can be found at: http://unearthed.solutions.
The views expressed in this article are the views of the author. This article provides general information, does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information.
Australian Bureau of Statistics (ABS), 2016. Mining Operations, Australia, 2014-15 [online]. Available from: http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8415.0Main+Features12014-15?OpenDocument [Accessed 2 June 2017].
Deloitte, 2017. Tracking the trends 2017 – The top 10 trends mining companies will face in the coming year [online]. Available from: https://www2.deloitte.com/au/en/pages/energy-and-resources/articles/tracking-the-trends-2017.html [Accessed 3 June 2017].
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World Economic Forum, 2017. Digital Transformation Initiative – Mining and Metals Industry White Paper [online]. Available from: http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/pages/files/wef-dti-mining-and-metals-white-paper.pdf [Accessed 30 May 2017].