A shift from a fuels-based to an electricity-based operating model can accelerate the current “slow burn” technological transformation of the mining industry, says a report on a new major industry survey. However, more innovation in asset design is key to broad, successful electrification.
“When it comes to asset design, miners tend to be more risk averse,” the State of Play report, Mining Strategy in a Changing World, says.
“In fact, only 14% of respondents said they would be willing to accept risk in asset design to increase financial returns.
“Given assets can have anywhere from a 10 to 30-year life span, risk aversion in this area is problematic.
“Innovation in asset design will be key to the energy transition and the successful electrification of mines and processing. Everything from mine layout, optimal material movement and renewable energy infrastructure needs to be considered.”
Western Australia-based researcher State of Play used feedback from 720 survey responses and interviews with 18 industry leaders to compile its latest biennial report. It said survey responses came from miners, suppliers, government, investors and researchers in 50 countries.
“In 2019, 44% of respondents saw oil and diesel as the most widely used energy source for mining over the next 15 years,” the new report says.
“Fast forward to 2023 and that has halved to 23% – an extraordinary shift.”
The Mining Strategy in a Changing World report says below the surface of an industry that looks mostly unchanging, in terms of the equipment and infrastructure employed, “a bottom up and slow burn transformation of the industry continues unabated”.
“The accumulated effect of 15 years of digital adoption is beginning to show.
“Telemetrics on equipment, internet connectivity across sites, immediate personal communication, remote control and cloud computing are changing the way the industry works and there’s no going back.
“Over the past three or four years, it has also become clear that the shift from a fuels-based operating model to an electricity-based operating model will accelerate this shift even more, providing the missing foundational pieces to fulfil the long promise of digitally dense and automated mining operations.
“Electrification of all things will unlock an entirely different way of mining.
“The degree of integration and optimisation once everything is connected on a single power system is technically unattainable in a fuels-based system.
“As we have seen in other industries, new service models will also emerge that may begin to reshape the definitions of resources and services companies.”
State of Play said 60% of respondents believed technology would have the biggest impact on innovation in mining over the next 15 years, including in exploration where “we are beginning to see the types of technologies and service companies that have been long predicted, but [which have been] slow in arriving”.
New technologies were allowing miners to visualise the subsurface and drastically improve targeting, while orebody knowledge within operating assets was improving.
“What we see in the next decade in this space will look like science fiction in comparison to today,” State of Play said.
“The smart mining companies are testing, understanding and building the skills in these technologies, and several have been for some time.”
The report said while AI promised clear benefits in mining’s technological and energy transition, “it must be acknowledged that the efficiencies resulting from technology will see job losses”.
“Research shows that generative AI could enable up to 70% of business activities to be automated between now and 2030,” it said.
“This will have flow on impacts to jobs that repetitive in nature or more likely to be entry level roles.
“It’s predicted that 40,000 Australian frontline mining jobs could be redundant due to technology change by 2030.
“Minimising the impact of these losses by retraining and reskilling those in roles replaced by technology will be key to maintaining an engaged and skilled workforce.
“The skills challenge is not an easy one to tackle.
“Between the shifting skill requirements with the increasing pace of technology and AI implementation, the difficulty with attracting new talent, and the need to upskill and reskill at a rapid pace, will require innovation across the board to be able to achieve what is required.
“Will the industry be willing to adopt artificial intelligence in a broad-based way, or will it look to lock down and control its use from the top – which philosophy is the most appropriate?
“It will be a fascinating decade watching this unfold.”
