Robotization of the Mining Industry

October 2014
Original Source: The Telegraph 

Image Source: Photographer: Ian Waldie/Bloomberg

 

The decline in demand for raw materials from the Chinese market, which threatens to eliminate a third of the mining industry, is forcing large companies to turn to automation to reduce production costs dramatically.

Salients

  • Machinery Conversion and Labor Displacement - According to the article in The Telegraph, experts predict that by 2020 the major mining companies could have converted 40% of their machinery to operate autonomously as robotic solutions and drones to replace human workforce.

  • Greater Efficiency and Lower Costs are Key - The trend towards automation has accelerated in line with this year’s continued slump in iron ore prices. The current price, below $80 per ton, makes smaller mining companies unprofitable, while the larger ones intensify the strategy of cost reduction.

  • Autonomous Vehicles Invade the Mines - The two largest producers of iron, Rio Tinto and BHP Billiton, lead the introduction of heavy load autonomous vehicles (AHS, Autonomous Haulage Systems), seeking greater production and efficiency. Rio Tinto has a fleet of 53 vehicles at its Australian mines, with plans to triple that figure in the near future.

Insights

  • Relevance of the Chinese and Emerging Markets - China is the second world economic power and the world's largest consumer of natural resources. Fluctuations in demand in China significantly affect the market prices of raw materials globally. The slowdown of economic growth in China puts pressure on mining companies and building material suppliers, who watch as the market prices for their products decline. Simultaneously, however, demand increases for raw materials from emerging markets experiencing growth and industrial transformation, especially in South America and Africa, which require complex, modern equipment and infrastructures.

  • AHS Testing Ground: Australia - Since 2008, Rio Tinto's autonomous trucks have driven over 1 million miles to transport more than 100 million tons of ore in the mines of Western Australia. 210 ton giants, the AHS can carry up to 320 tons. The new fleet of 150 Rio Tinto vehicles is expected to transport up to 1.5 million tons per day. The AHS communicate via wifi and are equipped with sensors to detect obstacles. The vehicles drive autonomously using GPS, and are loaded from the excavators using telemetry and radar. Central control of the fleet is situated at the headquarters of Rio Tinto in Perth, over 1,000 km away from the mines.

  • Safer, more Efficient and Greener Industry - The rise of robotics in mining responds to the need to find solutions to the three great challenges that the industry faces: reduce accidents and improve worker safety, increase productivity and efficiency in all processes, and comply with strict environmental regulations.

  • Return on Investment - There is no comprehensive data on the impact of robotics in the mining industry, which is worth close to a trillion dollars, but companies such as Rio Tinto, which has decreased costs by $ 2,300 million since January 2013, provide meaningful data. Rio Tinto is one of the pioneers and leaders in the automation of the mining industry. In Australia they currently finance one of the world's largest robotic non-military programs. Their studies concluded that the benefits of the introduction of automated machinery in mines far exceeds the high cost of purchase, installation and testing. In the United States and Australia, the salary of a truck driver can reach $160,000 per year. Taking into account the additional costs of accommodation, travel, and other expenses, an AHS doing the work of 5 drivers in 24-hour shifts, can represent a saving of one million dollars annually. The cost of an AHS varies between 3 and 5 million dollars.

  • Ubiquitous Robots - Robotics in the mining industry reaches all areas of activity, from prospecting for new mines in remote and unexplored terrain using drones, to processes where productivity, safety and efficiency can be improved, and even in rescue operations after an accident. The mining ecosystem of the not so distant future will see the proliferation of Autonomous Haulage Systems for loading and transporting ore, robotic drills and excavators, ore extraction systems, autonomous trains to deliver the cargo to port, systems to treat waste activity, sensor equipped robots to detect hazardous conditions and operate in confined spaces and tunnels, and drones that dramatically impact the supply chain and monitor activities in remote and sparsely populated locations where legislation may be less restrictive.  The entire system can be controlled from offices thousands of miles away.

  • A future Without Miners in the Mines - If robots can replace humans in stressful, tedious and dangerous tasks, the mining industry certainly provides plenty of opportunities to do so. Automation provides answers to the challenges of safety, productivity and environmental conservation, and is an inevitable and unstoppable process for large companies. The introduction of autonomous robots in mines allows innovation around the traditional activities of the mining industry, which will spawn new businesses and companies. The savings in personnel costs in certain activities justifies buying autonomous machinery, where the ROI is reasonable. We envisage a diminishing human labour presence in the mining activities of large mining companies in the United States and Australia. Humans will be progressively replaced by autonomous machines, managed by technical specialists from control centres located thousands of miles away. Nelmia estimates that the loss of jobs could be as much as 60% within 5 years.