More automation on the way

A new wave of technology including autonomous vehicles and aircraft as well as integrated monitoring systems will unlock new levels of efficiency at coal mine sites and drive down the per-tonne cost of production in the current decade, industry experts say.

Anthony Finch, Principal Mining Engineer of Hitachi Australia, told IHS Markit in addition to tier one mines, most tier two and three level mines will have remote operating centres as well as a range of autonomous vehicles by 2028.

"They will have a lot of autonomy. They will have not only autonomous trucks, autonomous dozers, autonomous drills and they will try and get as many people away from those sites as possible," he said.

The prospect of new technology displacing people from operations is always a sore point for Australia’s unions. For instance, in response to Adani’s plans to use autonomous trucks at its proposed Carmichael mine in Queensland, CFMEU Queensland mining division president Steve Smyth was heavily critical.

"It's all about them cutting costs and trying to save a few dollars at the expense of hundreds of workers who'll miss out," he said.

Finch disagrees, saying minesites will still require workers on the ground, and it was instead a "shift of manpower".

"We still actually need people to build the trucks, maintain them, maintain the wireless networks that control the trucks. Those networks are at a much higher standard than was previously at mines, so there is a lot of technology there in the back office systems that needs to be run and maintained," he said.

Finch says the real cost advantages come from having constant availability as well as reduced maintenance requirements, rather than labour displacement.

"Because trucks are driven specifically to the manufacturer's recommendation because it is controlled by a computer, the trucks are much more reliable, and we're seeing service lives in trucks up to fifty-sixty thousand hours rather than forty thousand or thirty thousand," he said.

Autonomous and driverless vehicles have already made their way onto coal mine sites in Queensland.

Hitachi has trialled autonomous trucks at the domestic supply Meandu thermal coal mine in Queensland for the last two years. Meanwhile, BHP is using driverless trucks - trucks with a remote operator - at several of its Queensland coal operations.

Driverless dozers were recently trailed at Wesfarmers Curragh mine in Queensland.

Driverless and autonomous trucks are also being used extensively for Iron Ore operations in the Pilbara, though producer sources say replicating this in coal operations is difficult due to their smaller size and lower availability of open space - particularly in the Hunter Halley.

But driverless and autonomous vehicles are only the beginning of a new wave of automation and technology which will connect all of the components of a mine together, according to Finch.

"Mines typically work in silos; there is a production department, a maintenance department, the IT department, financials and statistics people. There are different people who quite often have their own systems and SOPs and all sorts of other things."

Finch says the disadvantage of such silos is “different versions of the truth”, which clouds management decision making.

"You ask how many tonnes did you do today you will get five different answers," he said.

To combat this, Hitachi has developed a common platform for mine performance analytics where everyone can have a common view of the mine's output and identify any issues from the coalface to the stockpile in real time.

What new analytics also allow is 'Predictive Failure Analysis' which can forecast when a machine is likely to fail - allowing parts and labour to be organised ahead of time - and 'What-If Analysis' which can simulate how a management response to catastrophic failure or event would play out and be used to develop a best practice solution.

In this space, Hitachi is not alone, however, with companies like GE also offering similar mine management software platforms.

While these new technologies appear to be the way of the future for coal mining, the difficulty for producers is balancing the higher upfront capital required against the projected long-term economic benefit gained from reduced labour and greater efficiency, sources say.

Learn more about our metallurgical coal coverage.

Eric Thorpe is a Senior Research Analyst at IHS Markit.
Posted 23 January 2018

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.