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Rio Tinto Rolls Out Ambitious, Autonomous, Mine of the Future

AP20130069_1000x360
Analyst(s):  Dan Kara
Date: Oct 09, 2013
Markets and Industries: Energy, Oil Gas & Mining
Systems and Technologies : Service Systems

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International mining firm Rio Tinto, as part of its Mine of the Future Program, is automating its long-distance, heavy-haul rail system at its Pilbara mine site in Australia. The AutoHaul system is expected to be operational by 2015. The company is also automating truck haulage operations at Pilbara.

Salients

  • $145B Market – Three companies - Rio Tinto Group, Vale SA (VALE) and BHP Billiton Ltd. (BHP) – control approximately 59% of the $145 billion-a-year global iron ore trade.
  • Squeezing Margins – Iron ore miners are looking to automation to increase their margins by cutting costs and increasing productivity, and to generate extra capacity to meet the demand from Chinese steel mills. The rate of automation is expected to increase, as is demand for iron ore.
  • AutoHaul –As part of its Mine of the Future Program, Rio is spending $7.2B to expand iron ore operations, including $518 million on developing the world’s first, fully automated, long-distance,  heavy-haul rail system (AutoHaul). According to Credit Suisse Group AG, the AutoHaul system, which is expected to begin operations in 2015, will consist of 930 miles (1,500 kilometers) of track, 10,000 wagons, and individual trains running 2.3 kilometers long. The system will be managed by a remote operations center in Perth.
  • Automated Truck Fleets – Also as part of the Mine of the Future Program, Rio Tinto plans to automate 40% of its truck fleet by 2016. Rio competitor BHP has begun a trial driverless truck program at its Jimblebar mine.
  • Cost Reduction – Train drivers in the Pilbara region of Australia who haul iron ore for Rio Tinto earn approximately $224K per year. According to investment banking firm CIMB Australia Ltd., Rio may could save approximately $94M (A$100) million annually if it reduces the number of its train drivers by 400. The company is also seeking to reduce the number of its truck drivers (Rio’s biggest iron ore mine is now almost entirely hauled by driverless trucks).

ARIS Analysis

Mine of the Future – Developed in 2008, Rio Tinto’s Mine of the Future program includes four separate initiatives – 1) a centralized Operations Center for remotely managing operations, 2) autonomous truck haulage - ATH, 3) autonomous train operations - AutoHaul, and 4) autonomous drilling systems. The Operations Center has been operational since 2009, and autonomous drilling trials have been ongoing. The stated goal of the program is to “to reduce costs, increase efficiency and improve health, safety and environmental performance”. These goals are reflected in a Rio Tinto funded research report undertaken by BAEconomics entitled Autonomous and Remote Operation Technologies in the Mining Industry.

Flexibility and Scalability - Unstated by Rio management, or at least understated, is the fact that fully operational Mine of the Future processes also allow for much greater systems flexibility, including the ability to tune operations at a very granular level, as well as scale operations up and down as need demands. Rio officials have already intimated that they expect the AutoHaul system will allow the Pilbara mine to increase production capacity without the need for purchasing additional trains. Rio also notes that production can also be increased even in the midst of a shortage of skilled employees.

Cooperative Development – Rio’s AutoHaul and autonomous truck hauling systems were developed in conjunction with the Australian Centre for Field Robotics at the University of Sydney and is the world’s largest privately-funded robotics initiative. Other mining firms are also working with leading university and research institutions to develop mining automation solutions.

Autonomous Haulage Rollout – Trials for Rio Tinto's Mine of the Future autonomous haul truck (AHT) project began in December 2008. To date, the autonomous trucks have traveled over 600K miles (1M kilometers) and have hauled millions of tons of ore. The trucks are controlled by the Perth Operations Center 800 miles away (1,500 kilometers). The early results indicate a solid return on the company’s investment (both productivity and safety). The company expects to have more than 40 autonomous trucks operating in the Pilbara mine by early 2014, reaching a minimum of 150 trucks by 2015 (provided by Komatsu).

 

Resources

Australian Bureau of Resources and Energy Economics - Website

Rio Tinto Centre for Mine Automation - Website

Mine of the Future - Rio Tinto’s Innovation Pathway (Rio Tinto) - Report

Autonomous and Remote Operation Technologies in the Mining Industry (BAEconomics) - Report

 

About the Author

Dan Kara

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General Inquiries – info@arisplex.com

 

Feedback – feedback@arisplex.com

For Content Queries – publisher@arisplex.com

 

Press Contact – press@arisplex.com

Quote Request – quote.request@arisplex.com

 

Connection or Navigation Issues – technical.support@arisplex.com

 

 

To request more information about Myria Logo 344x135 Research & Advisory Services – arisplex@myriaresearch.com