This Is Now...Back To The Future

Welcome to the futuristic and dramatic world of smart and connected mines. In fact, the future is already here. Last year, Rio Tinto, the world’s largest miner, experimented with driverless trains. The first ride did have a driver, but he didn’t do anything. Later, Rio’s CEO boarded it and said that it was “working very well”. He added, “We just have to ramp up the entire system, which we want to do it in a very safe and structured way.”

Global firms have adopted other means of “driverless haulage”, which are equipped with GPS (for navigation), an obstacle detection system, and vehicle controllers. Such unmanned trucks reduce costs, enhance mine safety, and lower the wear-and-tear on tyres. Ultimately, such vehicles will be moved through remote control that will avoid collisions between man and machine. Most work in mines will be done by machines, and not men.

If you think that such technological innovations are happening in the developed world, you will be pleasantly surprised. India’s Hindustan Zinc Ltd (HZL) has a prototype for, what it calls, a digital mine, where technology plays a key role. The idea is to minimise, even eliminate, manual interventions in most areas of exploration, production, and distribution. In a recent piece, Sunil Duggal, CEO, HZL, wrote, “Mine digitisation has developed intelligent mines that are smart, connected, wired, and analytical.”

Picture this scenario, which may feel like something out of science fiction, but will soon become a common-place reality. According to a recent report by Deloitte, a consultancy firm, to discover minerals, and establish the potential reserves of new mines, there will be an increasing use of digitised geological data, and autonomous equipment. To exploit these resources, mining firms will use Internet of Things’ sensors to capture real-time on-the-ground data and happenings. At places, where the ore will be beneficiated, there will be wearable technology for “field maintenance and operator safety”.

Drones, artificial intelligence, and driverless trains and trucks will inspect, monitor, and move the minerals. “Diverse mobile-connected workforce” will also help in the moving of the ore products. At the last stage, integrated remote operations will ease the shipments to the final users. Like the modern power plants and ports, the operations will be technology-intensive, and not labour-intensive. The man-machine ratio will reverse.

Such changes will not occur on an incremental basis, but will come in the form of huge technological waves. The first wave is alre­ady on. In this scenario, there will be an increase in automation and mechanisation of the various operations and movements. There will be minimal and manageable changes in the existing business models, and management styles. Corporate decision-makers will learn to manage and live with the changes.

Then will come the second wave. According to experts, it will “involve significant changes in your operating model” and potentially disrupt “process changes across organisational boundaries”. Supplies will happen without human controllers; managers will need to plan and act in real time. Buying behaviours of the consumers will be scrutinised through predictive analytics; the use of big data will be paramount. Hence, production will be matched instantly with supplies; the supply-demand curve will even out.

In the case of the third wave, there will be complete disruptions. Business strategies and the manner in which the sector will operate are likely to undergo a transformation. It is likely to be an Uber or Airbnb kind of an experience that happened in the public transportation and hospitality sectors. As the Deloitte report says, “Wave 3 changes are not always readily apparent from our current day perspective—the futu­­re of the sector will continue to evolve in ways that may not be easily predicted.”

The trick may not lie in simple adoption of new applications and technology-driven solutions. These will happen in the normal course, as technology evolves and develops. In the near future, one will witness the emergence of new enterprises and new managements. The companies of the future may need to “embed digital thinking into the hearts of their business strategies and practices in order to completely transform the way corporate decisions are made across the enterprise,” contends the Deloitte report.

Here are examples of how technology is leading to a new mining mindset:

• In Australia, a global miner set up a visualisation tool to provide view of its iron ore supply from the pit to the port. Almost instantly, the buyers of the ore were able to instantly get a snapshot. It assisted them to take decisions, and initiate actions to enhance efficiency.

• Another miner used data-driven analytics to generate over two million scenarios to pinpoint unrealised values across the mines, and rail and port networks. The software analysed each scenario, and tested them against actual data to measure the possible changes. Later, the miner adopted the solutions that could yield maximum profits.

• One of the world’s largest mining companies launched an online auction platform. Thus, the shippers of the minerals could compete, and offer the best prices. The system proved to be efficient because it eliminated ship brokers, who today play a crucial role to bring toge­ther the miners and shippers. According to experts, the use of such platforms is likely to overhaul, and change the way the miners contract freight services.

What is important to note is that it is not just the companies that will evolve. Technology will lead to huge impacts in other areas—workers’ safety, environment-friendliness, and security of the local communities. Obviously, as machines take on man’s work, accidents will be limited. There will be less harm to the surrounding land and air. More important, in the future, no one will be able to recognise the mining areas after the exhaustion of the minerals. Communities that were displaced may be able to come back to their old habitat, which will look nearly similar to how they left it.

However, the path to heavenly digital mines is paved with huge obstacles. One of the foremost challenges is likely to be loss of mining jobs. Most consultants feel that the numbers will be in hundreds of thousands. How will the mining firms create jobs? How will they retain the old workers? They will need to re-train and re-skill workers, both the existing ones and newcomers. The miners will need to implement a new education programme to address this issue.

Organisations and managements will need to re-invent themselves. This is easier said than done. In the recent past, most cross-border mergers failed because of a single reason—lack of cultural fit. If managers in different parts of the world are unable to inte­grate, how will they change themselves? The same is true when organisations need to grapple with disruptions. Most of them are unable to survive, and die a natural death. How will such miners deal with the disruptive and unruly effects of Wave 3?

Policy-makers will need to take decisions differently. No longer can they focus only on the exploitative and degradation aspects of mining. They will have to be more constructive to aid the miners to adopt newer technologies, and rapidly. The governments will need to enmesh their skill-training programmes, technology framework, and infrastructure vision, with the changes in the mining sector. In the future, miners and policy-makers have to interact with each other as partners, not as enemies.

Civil society and local communities can look at mining and miners in a different vein. No longer do they have to oppose such activities, as the paradigm will change. Instead, they have to force the mining companies to adopt new technologies that will ensure safety of the workers, and sustainability of the communities. Both will need to act as extreme pressure points to fast-track the process of the ongoing transformation.

Suddenly, mining has become a new-age sector. All the stakeholders need to dump their old thinking. They will need to act as facilitators to enable smarter mines, connected mines, and safer mines. This is the future.