The mining industry is using automation to increase efficiency and reduce manual labor.
FREMONT, CA: Mining is a traditional industry. The emblem of the industry internationally, after all, is a hammer and a pick. Yet, despite the industry's ancient reputation, some major mining companies are taking a progressive position and demonstrating that digitalization and automation can produce much better operational results. Described as Mine 4.0, the industry sees digital transformation infiltrate into everything.
Improving efficiencies with automation
The global commodity crashed from 2014 to 2015, when prices plunged by more than 30 percent. Indeed, the coronavirus epidemic shows that miners have significantly less control over their company's revenue side. Therefore, minimizing costs and enhancing productivity in the three main expenditure areas of the industry, like wages, electricity, and materials and supplies, has become critical to shortening the bottom line.
The market pioneer in the introduction of robotics is Rio Tinto. At its Australian Pilbara activities, the firm has experienced a decade-long technological change, investing billions in automated vehicles, which have 15 percent lower costs, unmanned drills, trains, and drones for its mine sites. Rio Tinto has also invested in robotic process automation (RPA) to complete back-office functions, like form-filling and data entry effectively.
RPA software manages maintenance order requests for its iron ore business, and even scheduling, ordering, learning and growth, finance, and other core services. Through RPA, predictive maintenance, and other information technology, the firm saves about $200 million a year in maintenance costs.
Managing RPA v manual labor
Robots do not make mistakes, don't get tired, and can work 24/7, unlike humans. They are also much easier to scale up and scale down, which is a significant benefit in the cyclical mining industry.
Typically, RPA also contributes to a reduced workforce. The CFMEU Mining & Energy Union in Australia, looking at Rio Tinto's operations, indicated a trend of rising capital intensity and decreasing jobs per dollar invested. While this reduces companies' expenses in the longer term, it is a trend that frightens many.
Overall, as in any industrial setting, automation in mining has been proven to enhance operational efficiency and help manage market shocks, like the impact of COVID-19. As stated in the latest thematic investment report by Sustainalytics, investors also see resilience as a marker of a sustainable and, therefore, more investable business.
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