AMC Consultants Principle Peter McCarthy shares his view on the evolution of the mining industry – from 2oth century large-scale mining toward a low-impact, data-driven future in selective underground mining.
What’s your take on the evolution of mining around the globe – where has the industry come from and where is it going?
Last century, we discovered economies of scale. Mines got increasingly bigger and bigger with unprecedented rates of production. Bougainville copper, one of the world’s largest copper mines in the 70’s, began with 95-tonne trucks and soon was moving as much as 72 million tonnes per annum using 155-tonne trucks. Today, we can buy a 500-tonne truck.
In the 21st century, however, machines aren’t going to get any bigger. Large open pit mines will still exist but those with significant waste- stripping requirements will become less economically or environmentally viable. The economies of scale have reached their limit. Selective mining underground is the future.
Secondly, there aren’t enough tier one deposits around, and the risk of developing them is becoming unacceptable, even for the largest companies. That’s why I think that, in the future, huge companies are going to be replaced by medium-sized companies, with different niche assets to reduce their exposure to catastrophic risks.
Finally, one hundred years ago in an underground mine, everyone worked autonomously and wouldn’t be seen by managers until the end of their shift. This meant they made their own decisions every day down in the mine.
As operations got larger, we saw a lot of top-down communication – more supervision and direction.
In coming years, we’ll likely see a return to autonomous decision-making as a result of big data. Decisions will be back in the hands of operators.
So, what does the mine of the 21st century look like?
The industry’s future is moving towards high-tech underground mines that have a low impact on the environment, less waste and are more energy efficient.
Future mines will look less like the mines we see today and more like an industrial site.
Mining companies will be dealing with their tailings and waste in a neat way. And, these smaller-scale operations will have a single, central conveyor to carry the ore out of the mine.
What technology developments do you think will be the biggest game-changer?
Technology for the continuous cutting of hard rock will be a big game-changer and is something the mining industry is eagerly waiting for.
Flexible autonomous haulage systems, unlike the conveyor systems currently used in coal mines, is another. These will be robotic trucks that carry just a few tonnes of material from the face and deliver it directly to where needed.
Thirdly, sensing devices that quickly know what’s waste and what’s not, at the face, will offer a step change in efficiency. These will also apply to large tonnage bulk sorting of ore on a conveyor.
The mining industry is considered to be conservative when it comes to adopting new technologies – are they ready for this transition?
It takes 20 years for anything new to be adopted by the mining industry. According to one of my studies, anything that’s going to be a good idea underground takes about 20 years from when the first commercial prototype is developed to being commonplace in the industry.
Take for instance, autonomous trucks, which were first developed in Sweden in 1973. We’re still yet to see them widely adopted even 40 years later.
It’s because there’s a large capital risk in mining and adopting a new technology is another added risk. All the shareholders investing and the bankers lending don’t want to take a risk on technology and so the directors don’t take the plunge.
Small companies operating a marginal mine, and struggling to make it work, are the most likely to adopt a new technology. They either try it or risk going out of business.
How can mining companies better tap into research and development expertise?
Company directors need to appreciate the importance of R&D because I think that very often they don’t.
They are more concerned with immediate financial performance – the three-year cycle – and too often technology isn’t valued.
Companies need to be employing experienced technical people who can rise up the chain and present a technology case to directors in a meaningful way.
Mining3 brings together two major, world-class research organisations for the minerals and mining industry in Australia. What opportunities does this new partnership open for the global industry?
Mining3 puts a better structure in place and will give companies more confidence in investing in R&D. The industry believes that Mining3 can do R&D well and deliver it.
Importantly, members will be able to direct the research the way they want – in a way that’s most profitable to them.
Mining3 will also provide the expertise to tackle new challenges.
Mining companies can’t achieve a competitive advantage with new mining equipment and technologies because everyone will buy it as soon as it becomes available on the market.
Rather, technology gives all companies an advantage over nature to increase safety and reduce their costs.
Thanks to new developments, companies will be able to mine deposits that they can’t at the moment. And, those companies with mines in production, will be able to do more with them.
Is Australia’s resources boom really over or is the next commodity boom waiting around the corner?
The last resources boom is over and probably ended about five years ago. It’s the worst experience for geologists in about 30 or 40 years. I do think there will be another boom, but realistically they only come every ten to 20 years.
My prediction is that the next commodity boom will be uranium, because if extreme events linked to climate change continue at the rate we’re seeing them at the moment, there’s going to be a greater push to source clean base-load energy.
Is Australia best placed to lead the way in mining innovation?
Right now, Australia is best placed. We are leading the world in mining innovation.
A few years ago I would have said Canada, particularly Ontario, where they were putting a lot of money into research but that’s since dropped off.
South Africa isn’t involved much anymore and Africa as a continent doesn’t have the capacity.
There are pockets of good R&D in the USA, but their industry is way behind and very much in catch-up mode.
The industry is very conservative in the USA and finds it comparatively harder to change the way they mine.
Australian mining companies are pretty good at innovation compared to the rest of the world. They are still conservative and slow to adopt, but a lot of technologies have been developed, advanced and taken up in Australia.
Originally published in CSIRO’s resourceful magazine