From Proudfoot’s perspective, what is the outlook for the mining sector in the next 12 months?
What we’re seeing is a general growth or increase inactivity, both on the capital projects side of things—that is, new mines and expansion of brownfield—and development of orebodies. There are a few things driving this.
One of these is improved economic outlook and increased economic activity. The demand for consumer goods and the worldwide easing of COVID-19 restrictions, allowing people to get out and work, is boosting economic activity.
Another thing that we consider significant is volume increase. This refers to increased demand for battery minerals and other technologies to address climate change; electrification, electric vehicles and so on.
We’re seeing greater demand for copper, nickel, platinum, palladium and other precious metals— these are used in various types of batteries. Copper and aluminium are needed for electric vehicles. Furthermore, we see electrification as a significant volume driver in the next year and certainly in the next few years.
On top of that, we’ve observed an uptick in the use of gold as an inflationary hedge and as a precious metal. Economic recovery and inflationary increases in major capital markets will influence the price of gold, and this will of course have an effect on the sector.
Many mines—especially the big copper mines—are getting to end of life. We have a few new mines that are coming on board but we see a lot of age in the current asset base. These older mines are starting to have higher costs, so there is a need for some innovation there, which provides an opportunity for development.
Overall, I think the future of mining is very robust. If we look at the growth in copper demand or as we electrify the globe, I think over the next five to 10 years we’re going to see an increase in mining and mining activity.
What are some trends that are emerging when it comes to technology investment in mining?
Many different technologies are being discussed. I would say our position is: augmented intelligence, as opposed to artificial intelligence; for instance, autonomous vehicles.
There’s also the whole remote work side of things. Long-term mine planning, maintenance planning, metallurgical project work, procurement—these can all be moved off-site; we already have the technology to support that. It’s just remote working, basically. Short term mine planning and other tasks that fall within a one-month window would stay on-site.
A number of mining companies are already implementing integrated remote operation centres, or IROC, so there’s a clear move to get some functions offsite. I think that trend is going to accelerate.
What are the industry’s biggest technology priorities over the next one to three years?
The focus will be on ESG. Certainly anything dealing with climate change; climate mitigation, carbon neutrality and water management; the localisation of how you work with clients or with communities; transparency, and how you engage with stakeholders. All of that is going to require new technology solutions.
ESG is a tremendous driver for information transparency. Not only do you need to provide the information, you’re also going to have to improve compared to where you are currently. Carbon neutrality and local community engagement are fuelling an awful lot of those types of behaviours.
“If we look at the growth in copper demand or as we electrify the globe, I think over the next five to 10 years we’re going to see an increase in mining and mining activity.”
In terms of mining itself, there are some opportunities that may result from moving rapidly to a carbonless footprint. For example, underground mining, which will run on batteries and/or electricity. That gives you advantages, not only in ventilation, but also allows you some flexibility in terms of infrastructure.
If you’re going to go carbonless—whether fully or partially electric— you’re not going to have diesel underground and don’t have to invest in that infrastructure.
Of course that may mean investing in the alternative infrastructure, but the cost of going non-electric is declining rapidly. And as more people get into that, the technology is going to get cheaper. I would say arguably you’re looking at a parity. For example, there might be a little bit of an increased cost in the vehicle itself, but you’re offsetting that with ventilation and heat management.
What are some challenges and opportunities in accelerating adoption of technology?
Well, the industry is relatively conservative. On the other hand, it is very pragmatic as well, so it does accept and want to utilise best-in-class new solutions.
There seems to be a perception that in order to have a fully robust technological solution we need to have all the infrastructure. I think we’re going to find that there are opportunities to have mixed or hybrid solutions, i.e. augmented intelligence or augmented operations.
There may be some technology challenges in terms of getting interconnected and being able to operate smoothly—this might require satellites, or other means of electronically linking equipment. And electronically across the value chain, as well.
“We need to invest in the necessary skills and in our people. Additionally, we expect mining to grow and flourish, so the industry needs to make sure it is attractive to young graduates.”
Other challenges might include culture, and skills and talent. In terms of culture, traditionally, support and technical staff were usually on-site, so people may still want to be able to talk to those resources in person, as opposed to doing it through virtual calls if some functions are moved off-site. A cultural shift is required there.
There’s also a cultural shift around, how will moving functions off-site affect employment in local communities? Typically equipment operators are hired from the community. If we’re going to run this remotely, how will this change?
The other thing we have to look at is skills and talent. We need to invest in the necessary skills and in our people. Additionally, we expect mining to grow and flourish, so the industry needs to make sure it is attractive to young graduates.
One of the greatest issues will be diversity and inclusion. Historically, mining has not always been very inclusive and we haven’t necessarily engaged with the local Indigenous and Aboriginal populations to have them participate in the development, operation and management of these assets. We’re going to have to improve in this area.
What does the future of mining look like, and what role will people play in the sector as it goes digital?
I think it might be somewhat similar in a lot of cases to what we’re doing now, but we’re going to have augmented technology. We’re going to have people operating vehicles, but they may not be sitting in the vehicle. We’re going to have people operating the plants, who may not be sitting in the plant. We may be looking at a lot more remote operations and a lot more remote technical information coming into the site.
In addition, as we dive into IoT, digital twins and other collaborative technologies, we will get much more visibility around how preventative maintenance, procurement and all those things work together. There’ll be a lot more connectivity across from the mine to the load, rail, and port and all those people starting to work together.
We’re going to see a lot more use of technical information, and information in general, which is going to enable increased informed decision-making at the front lines.
What roles do safety and sustainability play in the future of the mining sector?
Both safety and sustainability are key. For stakeholders, we have to change how communities perceive having a mine in their location, the advantages and disadvantages. Part of that revolves around safety and sustainability. There’s the environmental factor, but sustainability also involves sustaining the economic activity and benefits that come with having a mine in your region or in your local community.
Employment is a big advantage, but the mine is also a source of secondary development.
“We have to start to prevent as opposed to respond. Safety issues revolve around prevention. ESG will push us to look for, and forecast, potential issues that we must manage, both in terms of environmental conservation and in our operations.”
Mining companies will have to look into many ESG related areas, such as how they manage safety and water, and how they’re bringing advantage into the local community. Equally, they’re going to have to create strategies to upskill that local community and how they engage with those people.
Licence to operate has always been important; it’s becoming more important in the era of ESG. And it’s going to continue to be on the forefront of conversations in the industry for many years to come.
Do you have any advice for other mining leaders when it comes to operationalising ESG?
Embrace ESG. As we move forward with ESG, we have the opportunity to learn and integrate ESG values into the way we work. Not only develop the necessary measures, but also make sure our messages and behaviours are aligned, not conflicting.
When it comes to managing ESG, there’s two parts to operationalising it. One is: how do we build ESG into our values and how we work? That is, actually integrating it into our standard operating practices and into our methodology.
The second: we have to start to prevent as opposed to respond. Safety issues revolve around prevention. ESG will push us to look for, and forecast, potential issues that we must manage, both in terms of environmental conservation and in our operations. We need to build more muscle around prevention and forecasting. Prediction and prevention go hand in hand, and this is where the future of mining lies.
Managing Partner Americas, President Global Natural Resources
This extract was originally carried in the Equinix Mining Technology Report 2021-2022