The mining industry is on the brink of an “extraordinary transformation” driven by technology including robotics and automation, according to mining executives from around the globe.
A new industry report by Perth-based research group State of Play shows 73% of surveyed mining executives believe robotics and automation will be the biggest impacting technologies on the industry in the next 15 years, followed by artificial intelligence, sensing and data.
State of Play drew its conclusions from the survey of 800 executives from 399 of the world’s largest mining and service companies including Australian majors Rio Tinto (ASX: RIO), BHP (ASX: BHP), South32 (ASX: S32) and Fortescue Metals Group (ASX: FMG).
In addition, the survey found that 75% of respondents were more willing to accept risk with technology than in partnering, acquisition or exploration, in order to boost financial returns.
“In the next 10 and even five-year timeframes, some mine sites will be largely unrecognisable, and in some cases, almost invisible,” State of Play chairman Graeme Stanway said.
“Industry leaders are setting their sights heavily toward AI, automation and sensing tech,” he added.
One mining executive quoted in the report, Black Rock Mining (ASX: BKT) chief executive officer John de Vries, said the “ultimate mine” would potentially look like “an army of un-hackable robotic wheelie bins where the design efficiency is monumental, both in open pit and underground”.
Other key drivers of change in mining
In addition to robotics and automation, State of Play’s report highlighted five other key drivers likely to propel major change in the mining industry: exploration, provenance, biotechnology, outsourced innovation and renewable energy.
Innovation led by explorers
According to the report, mining executives were three times more likely to see explorers as the main drivers of innovation over the past four years.
This perception is based on explorers collecting large amounts of data, sharing it widely and applying advanced analytics and machine learning to identify new deposits.
One investment executive has been quoted by State of Play as saying juniors are the ones that are finding the “mines of tomorrow”.
In addition, start-ups were ranked number two in the list of the largest drivers of innovation in the global mining industry.
Similar to the way consumers have moved from buying CDs to streaming subscriptions, the research group said mining’s high capex approach to operating mines is facing “an enormous shake-up as digitally-enabled service providers emerge”.
Growing need for transparency
According to the report, 58% of mining executives believe the source of raw materials will become a key driver of value.
“Rising social expectations are increasingly tying mining to consumer-facing industries such as electric vehicles and phones, making the provenance of minerals a key source of Australian competitive advantage,” State of Play said.
The mining industry’s priority to lower its environmental footprint has become increasingly important to the public sphere in recent times.
Another example of social expectations disrupting industry would be the mining of cobalt, an important metal in the production of electronic technology but one which has been exposed as associated with unethical practices including child labour and high fatalities at unsafe and unregulated operations in the Democratic Republic of Congo.
“Through technological advances, we’re seeing social and environmental expectations at unprecedented highs,” Mr Stanway said.
“In order to continually attract talent and optimise results through innovation, mining must meet the growing need for transparency of its products.”
He said historically, this concept of “provenance” was not a factor when it came to mining, as the supply chain took the spotlight, but this looks set to change.
“Telling the story of where minerals are from and how they are sourced to gain competitive advantage is one of the most untapped areas of value in mining,” Mr Stanway said.
“Through our discussions with industry leaders, it’s clear this will become an area of focus in the coming years,” he added.
Reducing environmental footprint
The report also found that Asian mining executives were three times more likely to see biotechnology as the most important new technology compared to Australian executives.
On the other hand, 78% of Australian executives believed solar would become the most widely used energy source in the industry.
“Technology will be used to fundamentally reduce footprint in mining, particularly through the use of renewable energies – in Chile, over 30% of our energy is consumed in mining,” Chile-based copper miner Antofagasta PLC chief executive officer Ivan Arriagada Herrera said in the survey.
Mr Stanway said once technologies such as robotics and automation are fully integrated and fuelled by renewable resources, the “level of precision, speed and accuracy that can be achieved will alter more than just profits”.
“It will ultimately refocus the world’s view of mining as an industry with a far smaller environmental footprint than ever before,” he said.