IT optimists
Richard Roberts, 15 December 2011
AFTER posting high growth rates in 2011, and despite the economic storm clouds over Europe and the US, all of the 16 leading global mining IT firms spoken to by HighGrade over the past few weeks remain optimistic about what 2012 has in store for them. Here senior executives explain why.
A consistent theme running through the sector is that, even with the intervention of the GFC, mining’s investment boom of the past decade has had an unprecedented information and communication technology spending element – however, this could be the tip of the proverbial iceberg. The injection of remote operating centres, automated equipment, wireless communications, embedded enterprise resource planning and asset management, and logistics management systems into the mining mix has merely opened the door to a new level of IT problem solving. The glimpse afforded thus far at business improvement opportunities might spur the industry to dig deeper into technology spending reserves.
These are a couple of common mining IT sector beliefs, or perhaps 2011 Christmas wishes.
While IT organisations employing 50 to more than 500 people that participated in HighGrade’s annual survey say tougher times for the mining industry will create an even sharper focus on investment in this area (and they might get this ‘wish’ granted next year), the question they and the few analysts following the sector most often ask is, do miners have the capacity – the people and the vision – to drive the next phase of evolution?
Rio Tinto’s significant investment in its remote operations centre in Western Australia, and subsequent major investment in automated mining trucks, has provided part of the answer.
Fortescue Metals Group has also announced a big deal with Caterpillar (and Thiess) to establish a “truly autonomous” mine at Solomon near Rio Tinto’s iron ore operations hubs in the WA Pilbara region.
Chile’s CODELCO is automating underground mines and equipping surface fleets with state-of-the-art machine guidance and collision avoidance technologies.
Newmont Mining is leading organisation-wise investment in underground wireless communications.
Other miners have made, and are making, investments of $A400,000 to $3-4 million at a time in geoscientific information management, fleet management, and collision avoidance systems; machine monitoring and visualisation software; mine supply chain and ports/terminal management software; and enterprise-level data and process management solutions.
Compare these transactions to the $10,000-50,000 desktop, or domain, software sales being made before the dot.com bubble burst 10 years ago.
“We see major shifts in thinking across a range of mid-tier and global miners, all of whom are after game-changing productivity improvements, supported by a range of technologies,” Mincom’s vice-president global mining solutions, John Jessop, told HighGrade Mining IT.
“There is a major wave of change sweeping through the industry at the moment. While different organisations are taking different approaches, there are extraordinary levels of innovation across many of them.
“We have been talking about bridging the functional silos within mining operations for some years. We have seen significant moves towards this over the last 2-3 years, and some major projects along the way. But over the next 12-24 months, we predict a massive uptick in deeply integrated operations supported by some major moves from the big players in mining software.”
The significant investment in IT is producing a range of outcomes – some welcome for mining companies, others not so much.
“The ability of new hardware tools to generate data is rapidly exceeding our ability to understand its significance,” ARANZ Geo CEO Shaun Maloney said. “Software companies need to find new ways of presenting this data to ensure the insights don’t become lost in a sea of numbers.”
That was at the geological level, but the issue is far broader.
“In early October Maptek hosted a Vulcan customer advisory board meeting. Number one on the list of primary concerns was managing larger datasets,” said Maptek CEO Barry Henderson.
“Data volumes are predicted to grow by 800% in the next five years [and] the type of data is more likely to be unstructured – video, text and media files. Increased use of mine-operated tracking and sensing devices are helping to accelerate this trend. Integration, interoperability, tagging, privacy and security of data will need to be addressed.”
Modular Mining Systems, closely aligned with Rio Tinto’s “… perhaps … largest-ever non-military purchase of autonomous equipment” from MMS parent Komatsu, anticipates a “more integrated, holistic approach to managing assets – equipment, people, and processes – at mines”, according to the company’s VP sales and marketing, Mike Lewis.
“We see an increase in the industry of goal-oriented approaches to automating business processes and decision making.”
John Davies, Mintec’s president, said there was no doubt that autonomy was a driver for mining IT.
“With reliable in-pit communications and location sensing, the time is ripe for mid-to-large-size clients to get involved more with autonomous vehicle control,” he said. “And the opportunity for us is significant – you can’t have an autonomous operation without a detailed and operational plan that can be followed, and not only followed, but updated with information coming from a wide range of inputs. Data collection and reporting to help manage autonomous and non-autonomous mines is also a critical future area for vendors.”
Federico Arboleda, director of research at acQuire Technology Solutions said the beginning of “the automated century of mining” was already putting new demands on systems such as acQuire’s geoscientific information management system because of the dependence on data interoperability.
“We already have a number of JVs to develop solutions in automated environments,” he said. “The innovations in integration of tools to enhance automation outcomes is impacting the data capture world. A range of new technologies from new ruggedised tablet systems to the application of RFIDs is changing the world of data capture.
“The mining value chain requires an integrated solution by geology, engineering and metallurgy to optimise success. The field of geometallurgy has been evolving over recent years to improve mining outcomes.”
“Technologically there needs to be a greater level of interoperability between the mining systems,” said Bill Withers, acQuire’s managing director. “This can only happen if mining software vendors are open to a more collaborative approach. Customers are expecting better and simpler data exchange between their enterprise systems.”
This more collaborative approach might be emerging.
Empie Strydom, vice president – marketing with South African-based MineRP (formerly GijimaAST), said a convergence of MineRP, Gemcom, Runge, Cyest and RealIRM at a mine planning conference in Cape Town in October was not only “heart-warming” and a demonstration to assembled mining professionals that IT vendors were willing to “reach across traditional boundaries in search of ways to better serve our joint customers”, it also underlined an apparently common view that a move towards more cooperation and standardisation between mining IT companies and solutions was paramount.
“Mining IT vendors will be forced to agree on standards for information exchange and visualisation – whether they like to acknowledge this or not,” Strydom said.
“The mining industry will require massive effort to obtain international standards for both mining processes and mining technical information exchange. This is why MineRP is a major contributor to the EMMMV [The Exploration, Mining, Metals and Minerals Vertical] forum of the Open Group, working towards the establishment of common standards and practices in this domain, and has also decided to move away from proprietary data structures for its mining tools towards OGC (Open Geospatial Consortium) compliant databases and interfaces.”
Snowden group general manager technologies Rob Williamson said the consulting and technology firm had noticed a renewed focus in the industry on the integration of technologies via a “standardised platform”.
“The mining world still features a large number of specific solutions developed to cater for specific technical requirements, and companies are realising that huge value can be extracted through the implementation of a standard platform that enables integration of data across these technical domains,” he said.
A Mongolian mining company is moving large data files over satellite connections between an exploration site and its headquarters in Ulaanbaatar using Gemcom Hub.
“It will be less common for IT suppliers to be providing completely stand-alone systems, which do not interface and integrate with other systems on site. This will drive other challenges including conformability, consistent application of business rules between systems, and intellectual property management,” Jessett said.
“From a skills perspective, as more IT is deployed into the field, the requirement for skilled workers to install and support this technology will increase rapidly. Mining IT is very much about after-sales and service, and the capability of mining IT suppliers to support their products will become increasingly challenging as the pull on skilled field-based resources increases.”
A number of IT sector leaders highlighted the ongoing skills challenge, which was morphing in the IT arena into a pitched battle between miners, contractors and technology suppliers for available talent. One IT company manager said big miners were “outplaying the service providers with higher wages”.
“Competition for quality people is fierce,” said acQuire’s Withers. “We need to offer prospective candidates much more than just salary because it is difficult for us to compete with the mining companies on salary alone.”
Trent Bagnall, former managing director of QMASTOR and now head of Triple Point Technology’s coal and mineral supply chain solutions business, said people “and therefore IP retention” was a problem that was “undoubtedly getting worse”.
“I think the gas industry will put serious additional pressure on acquiring people out of the mining industry over the next decade,” he said.
“There is an ever increasing shift of IP from the mining companies to the contractors purely through turnover.”
Bagnall has a somewhat different perspective on the standardisation issue.
“Over the last few years I have watched the corporates battle with standardisation versus each mining operation doing their own thing,” he said.
“Generally it’s been very hard with the resources available even in the large corporates to standardise systems across their sites because they simply don’t have the bandwidth. I’m confident we will see mines getting closer to their suppliers in more of a partnership approach – primarily so as to lock up as much of the supplier’s resources as possible over the medium term as a way to limit the people risks associated with service and project delivery … to ensure the job gets done.
“Really [this is] a move toward delivery capability rather than standardisation.”
But beyond the battle for people, Gemcom president and CEO Rick Moignard believes skill shortages in mining are presenting IT firms with many opportunities.
“Skills shortages will only continue to get worse across the industry in 2012 with elder specialists retiring and universities unable to fill the void with graduates,” he said. “Australia’s mining industry will need 70,000 additional skilled workers within four years and Canada’s mining industry will be short 81,000 skilled workers over the next 10 years, according to numerous industry reports. Technology and services have a key role to play in helping to address this issue. Software that captures and automates routine processes is required to capture best practise workflows and allow fewer staff to run operations and reduce turmoil associated with staff turnover.
“Data management and synchronisation technology, such as our Gemcom Hub system, moves data between sites and central offices where operations can get economies of scale as senior staff can review and work on data from multiple projects without ever having to travel to them.
“The challenge will always be to achieve better results with less cost in the dynamic mining landscape. The mining domain is highly dynamic, filled with islands of expertise and mostly spread across regions where distance, infrastructure and access to experienced technical skill add complexity to operations.
“The challenge will be to find ways to leverage the investment in technology to best effect.”
According to MineRP’s Strydom, the move toward mobile computing in mining “is undeniable”.
“This demands that mining solutions providers need to think of ways to provide current, reliable information anywhere, anytime and across the variety of mobile devices available on the market,” he said.
Maptek’s Henderson said another significant trend was the increased level of interest being shown in virtualisation and cloud-based services.
“This will result in reduction in hardware assets – servers in particular – managed by mining companies. Organisations will increasingly migrate to virtualised servers, storage, networks and even desktops,” he said.
“[US-based IT advisory group] Gartner predicts that by 2012 at least one-third of business applications software spending will be by service subscription instead of product licences. The mining industry will increasingly turn to ‘software as a service’ particularly for mine planning, operations and reporting software.”
Henderson is also a believer in the mobile revolution.
“The mining industry will increasingly merge the use of collaboration technology, business intelligence and social platforms to drive efficiency,” he said. “Daily reporting from central business intelligence platforms to handheld devices and devices integrated into equipment.”
MineWare’s Andrew Jessett said even legislative changes altering the taxation landscape for mining companies in many countries could have consequences for mining IT.
“On one hand it may reduce the availability of capital for expenditure, but on the other it may incentivise mining companies to look more deeply at how mining technology can create efficiencies in their operations,” he said.
“Similarly, the push towards greater environmental accountability will continue to drive IT innovation.”
Also in the December 15 - 21, 2011 edition
- AFRICA
- Eritrea risk narrows Zara field
- ASIA DESK
- Not all good as gold in China
- AUSTMINE
- MST buys Nixon Communications
- BREAKING NEWS
- Abenab progress for Avonlea
- Alara advances
- Alcoa declares divi
- Alcyone search boost
- Better news for St Barb
- Black Fire complies
- Bu Dun Hua copper
- Chief sees higher rating for Endeavour
- Cockatoo extension
- Impala sacks drillers
- Industrea win
- Kingston shines
- Maiden Rosie resource
- More Bass trouble
- More concerns on uranium supply
- Nany option exercised
- Newcrest output up
- Palito reassessment
- Pegasus finds copper
- PGM output up
- Radar on track
- Redhill expands holding
- Rio in control
- River attraction for Silver Lake
- Southern Cross ready to move forward
- Stonehenge sets sights high
- Straits gain
- Strategic permit
- Tanoyan update for Reliance
- Trafford's exploration boost
- Two Rivers death
- Ventnor copper hits
- WA uranium policy
- West Rand mines to merge
- Windfall at lake
- Winmar attracts investor
- Yellowhead on track
- CENTRAL ASIA
- Can miners really side-step a war?
- COAL
- Mardon's new year wish
- CONSULTING
- Consultants see room to grow in 2012
- Lory leads SKM mining into new growth phase
- CONTRACTING
- Contracting briefs: Redpath, Thiess, Decmil
- FINANCE
- A golden path to Dubbo development
- Copper deficit a fixture for the future
- Kagara opts for safety first
- Money’s almost too tight to mention
- Terramin view expected to become clearer
- FORUM
- How the JORC and Valmin codes work
- More must buy into JORC discussion
- FROM THE CAPITAL
- Capital management will be key 2012 theme
- GOLD
- Loyal to the cause
- Upside seen despite Teranga downslide
- HEAVY METAL
- Atlas Copco expands mining range
- ISSUES
- State-run miners: best of a bad bunch
- MINING
- Independence gloom unwarranted
- MINING INTELLIGENCE
- 'tis the season (still) to be wary
- MINING IT
- Auto-money changes everything
- Innovation is the new black
- IT notebook: ARANZ Geo, Immersive Technologies
- IT notebook: Devex receives certification
- Mining IT: 2011 rebooted
- Mining IT: product releases to fill 2012 calendar
- XPAC to lead dynamic software revival
- PEOPLE
- People on the move: Gindalbie Metals, Abcourt Mines, Carbon Energy
- SOUTH AMERICA
- Chili backers like its prospects
- VIEW FROM THE WEST END
- Bitten on the bum by a Black Swan
