09 agosto 2019
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Rag Udd, VP Technology Global Transformation, BHP
Speech given at GW3 Future Workforce Summit 2019
Thanks for the warm introduction. It’s my great pleasure to be here today.
First, I want to acknowledge the traditional owners of the land on which we meet today, the Yuibera [You-ee-bera] people.
I pay my respects to their Elders past, present and emerging.
BHP, and myself, are very proud to be supporting this event – and our broader partnership with the Greater Whitsunday Alliance.
More importantly though, we are really pleased to be an active participant in this conversation today, in what we believe is an important time for the region.
I’m here today in my capacity as BHP’s Vice President of Technology, Global Transformation.
It’s an exciting role – and I’m looking forward to sharing more about our technology and transformation agenda.
But, as many of you know, my former role at BMA saw me spend well over half my time here - in this region.
Mackay, Moranbah, Dysart, Emerald, Blackwater, the Bowen Basin.
I’ve spent countless hours at our operations, on the highways, in the towns.
Talking with our people, talking with local business operators, talking with the community more broadly.
In my down time, I have also been lucky enough to spend time a lot of time trying hopelessly to catch fish.
As you’ve probably gathered, I’m extremely fond of this region.
And I’ve experienced first-hand the immense capability and commitment of everyone that calls it home.
That’s why I want to be involved in conversations like the one we’re having today.
And why I am committed in my role with BHP to working collaboratively, to co-create shared value from the uptake of technology at our mines here in Central Queensland…. together.
Today we are here to talk about the future for all of us.
As the promotion for the event stated – “transformation starts today”.
I’d like to share a little bit about ‘what’ this means at BHP.
But before we get into that I want to be clear on the “Why” and the “How” – because, in my view, that’s actually going to be really important part as we go through a transformation.
‘How’ the nature of work is changing – and, how, we need to prioritise people - whether it be the people who currently work for BHP, or the next generation - as we learn more about the change.
‘How’ we can’t do this alone and need to work in partnership across the region – with community leaders, government and educators – to solve shared challenges, and co-create solutions.
‘How’, as we innovate and transform, we want to create opportunities for our supply chain to do the same, especially local businesses in the regions where we operate.
Creating a mindset where, on balance, our people, communities, and industries are excited about the change and the opportunities that transformation can bring.
Creating an environment where people are leaning into the change, will allow us to capitialise on the benefit that this inevitable change will bring.
But let’s start with the Why.
Like any business or region, we must stay ahead of our competitors to survive and thrive – here in Queensland and around the world.
Whether it’s through enhanced skills and capabilities, safer operations, or faster movement of resources to market.
Importantly, when we achieve that competitive advantage, it means that others around us also benefit from the work we do.
And when others are benefitting – the value is shared.
As the world continues to change – so too does our industry – and we must not lose sight of our position within a larger eco-system.
More to the point, we must not lose sight of the need for shared value.
And this is especially relevant here in Central Queensland.
· Whether it’s creating more permanent employment opportunities – and investing in skills and training to prepare for the future of work;
· Whether it’s working in partnership and collaborating to solve shared challenges; or
· Whether it’s enabling local businesses to innovate and grow with us.
All of these things – and much more – are vital factors in ensuring we can and will thrive for the long-term.
So, ‘what’ does transformation mean to BHP?
Where have we come from? And where are we going?
Our industry has helped fuel the digital era – or the fourth industrial revolution as it’s become known. There’s no doubt about it.
Copper for mobile phones, steel (iron ore and coal) for driverless cars and nickel for batteries.
While we’re proud of our role in this revolution – the truth is mining hasn’t progressed at the same pace.
Until recently, our advances have been mostly incremental.
Bigger trucks, faster trucks, and learning to operate and maintain them more effectively and safely.
In fact, our approach to transformation and technology has been one of evolution - not revolution.
And while that approach has brought us many rewards, what we know is that it will not deliver the step change that is now possible, in the world and in the time in which we now live.
Let me give you a couple of examples to provide a clearer picture for where we are heading.
For those that aren’t familiar, the Coal Handling Preparation Plants – or Prep Plants as we know them – help us prepare coal from the ground to the market.
We crush, wash, clean and sort coal to prepare it for our customers.
We built our first prep plant at Blackwater over 50 years ago.
If you were to build a new prep plant similar to the size at Blackwater, it would set you back around $AUD750M.
And while their value to the production of coal is immense, the way they are operated has remained largely unchanged since they were first introduced. They are reliant on judgement and information arrived at in batches of time – like a shift report.
Fast forward to today, and through the advent of decision analytics, we see great potential to very rapidly enhance the productivity of our prep plants and achieve a whole new level of through-put.
To make this happen, we will install hundreds of sensors throughout the plants.
The sensors will provide real-time information from equipment in the field – from chemical properties, yield, temperatures, to speed and rotation of motors, water flows and much more.
Once fully implemented, we will be able to optimise what we do – as we do it in real time.
And we expect a greater return on our coal because we have the ability to optimise instantaneously. This will still involve people – they’ll just work in a different way.
Elsewhere at our sites, we have been impressed by the safety and productivity gains delivered through the latest geospatial technology.
Drones are allowing us to gather more information about our sites than ever before.
We can quickly and accurately measure many things, from bund heights, to stockpiles, review compliance to plan and understand where we need to make changes to improve safety or boost productivity.
Most importantly drones are making mining safer.
Deploying technology that removes surveyors from our pits takes them out of harm’s way.
They’re spending less time driving utes and more time driving improvement.
Another example that demonstrates how technology could change the face of mining that I’d like to share with you is our study into autonomous haulage.
Through the study, which spans both BMA and BHP’s Iron Ore business, we see potential for up to 500 autonomous trucks to be introduced to our open cut operations.
Here in Queensland, we hope to start converting our first fleet this fiscal year.
It’s an ambitious target - that would see about a tenfold increase to the existing fleet of autonomous trucks BHP already has operating at our Jimblebar mine in Western Australia.
For us Jimblebar is an excellent demonstration of what can be achieved when we push the boundaries.
The site’s improved safety and productivity outcomes make a strong case for change. It’s now one of the safest operations in our portfolio.
In fact, since the introduction of autonomous haulage, significant events and injuries in haulage have dropped by nearly 90 per cent.
Jimblebar is also now our benchmark site for productivity.
In short, costs are down and tonnes are up.
Equally importantly though, our team at this site have embraced the opportunity to change. To learn new skills, to re-train, to be early-adopters.
And I want to take this opportunity to clear up a common misconception.
Often it’s assumed that transformative technology, like automation, suggests no people are involved.
That’s simply not true.
Our team at Jimblebar, which operates both a fully autonomous truck and drill fleet, is made up of over 800 people.
The fact is the technology is only as good as the people who run it.
At BHP, we know that people must be at the heart of our transformation.
In Queensland, we have over 10,000 proud, passionate miners that work in our business.
The people in the towns and regions where we operate. The people in this room – and beyond.
That’s why at BHP we have committed to investing on a number of fronts, to create a stronger foundation to realise the future.
Firstly, we know people are seeking stability in employment – and so too are we.
We’ve heard the strong calls to reduce long-term labour hire and create more permanent employment.
Our investment in BHP’s Operations Services (OS) has come about as a direct answer to those calls, and is one of the key ways that we plan to deliver the stability that a permanent job brings.
To date, OS has already resulted in 400 new full time jobs within our Queensland operations – and soon we will commence recruitment for another 400 permanent roles.
We’re proud of that achievement, and excited to welcome 800 new people into the fold to support the delivery of a safe, stable and sustainable performance.
Critically, we expect around half of those people will live in regional communities.
And while we’re transitioning to a more permanent workforce, at the same time we are also steadfastly focused on preparing our people for the changing nature of work.
In other words, we’ll create the jobs, but please understand that the jobs will change over time. So, in preparation for tomorrow, we know we must build a tech savvy workforce today.
A recent report commissioned by Queensland University of Technology and the State Government identified that automation and robotics will create over 725,000 new jobs in the next 10 years.
As a business, we are keenly focused on re-skilling, training and creating options - to allow people to make the most of the opportunities in front of them – both now and into the future.
For example, we have partnered with the Queensland Resources Council, TAFE and the State Government to deliver training programs to enhance foundational digital skills.
The training will reach thousands of employees… if they want it.
At our mines, where the changing nature of work will probably be most significantly felt, we have also launched a development program focused on preparing for the roles of the future.
Through this program, we aim to create the best environment for change, by giving people the tools to prepare for it.
So everyone can take control, make their own decisions and shape their own future.
This includes learning more about autonomous equipment and operations, transition pathways, training and re-skilling requirements.
At our Goonyella Riverside mine, where this program is underway, participants have been excited by the options and opportunities – and have shown a real willingness to focus on their development.
Over time, as the nature of work changes, it will mean fewer equipment operators. But it will mean more controllers, more builders and more technicians.
New jobs. Jobs that are augmented through the use of technology.
It will mean less physical and less routine jobs. But it will mean more dynamic, fulfilling careers.
We are also working hard to prepare the next generation – partnering on a number of fronts to tackle the STEM skills gap.
In fact, BHP has contributed more than $55 million to STEM programs across Australia.
That means a lot, to a lot of people– especially here in Central Queensland.
It means, just last month, a group of students from Moranbah and Dysart High Schools attended the Hopper Down Under conference, spending invaluable time with some of the best female technologists in the Asia-Pacific.
It means 60 high school students – from across Central Queensland – are completing Remote Pilot certificates as part of their senior studies, giving them the highest qualifications for Drone Piloting in Australia.
And soon, it will mean vocational students will have the option to study automation at TAFE – here in Queensland. Enabling them to possess cutting edge, and highly sought-after, autonomous competencies.
There are many more fantastic examples like the ones I’ve just shared, and each of them have two core ingredients that point to how we are approaching our transformation:
· Firstly, people in our business and the region are at the centre; and
· Secondly, partnerships. As we help people prepare for the future, we want to do it together.
And this takes us to another key aspect of what I’d like to discuss today. Another ‘how’.
We can do a lot, as an organisation and as an industry, to solve for the future.
But we can do MORE when we combine our capabilities with others. In fact, I believe we are all stronger when we work together.
And there’s no better example than Central Queensland.
As new technology becomes available in our sector, strong partnerships in this region will be essential.
Its why, late last year, we sat down with GW3 to understand how we could contribute to the region’s future.
Through GW3 and beyond, we want to bring our expertise to the table and be part of a collective approach to enhancing prosperity across this great region – for generations to come.
One of the other exciting initiatives in the region that we are partnering on to position it for future success is the Resources Centre of Excellence.
This Centre was announced last year by the Palaszczuk Government and the Mackay Regional Council.
BHP is also committed to making this centre a success.
We are committing nearly half a million dollars [$475,000] to bring the centre to life.
Importantly, we want to apply our expertise and know-how in establishing the Centre’s systems and processes.
Helping to ensure its long-term sustainability and value to the region.
For us, that’s an investment of money and effort that makes perfect sense.
The centre will be a critical nexus between research, education and industry.
It will be a one-of-a-kind facility in Queensland, featuring an underground mining simulator, a research lab; and enhanced, state of the art, education facilities.
Crucially this is another vote of confidence in Central Queensland.
An area that we intend to be part of for the long-haul.
Another key area we are eager to focus on is education and training.
This week the Palaszczuk Government announced a state-wide program offering free apprenticeships for young Queenslanders.
It’s an excellent initiative, which we fully support.
But we must make sure those apprenticeships will deliver the skills our State needs.
To keep Queensland and Queenslanders on the cutting edge of what’s possible.
Businesses, like ours, and industry working with government – more closely than ever before – to set the next generation up for success, now and into the future.
And in return, we will be able to continue creating fulfilling jobs in great regions like this one.
Last, but by no means least, I’d like to talk about the importance of our suppliers.
We know that growing smaller businesses with our business creates value for local communities.
Our BHP Local Buying Program is an excellent example of how we are doing that. Last year, BHP spent well over 100 million dollars with local businesses in Queensland through this vital program.
As we accelerate on our transformation journey, we know we must also embrace new ways of working and new partners to do it with.
Looking, listening and learning beyond our business and industry.
Engaging with suppliers, developers and entrepreneurs and, in turn, sharing value and stimulating growth.
One great, recent example, is a partnership we’ve embarked on through an open innovation hub earlier this year.
Through that collaboration we launched a competition to improve access to our mines.
Site access has long been a frustration for us – especially here in Queensland – and it often results in delays in getting people onto our mines.
The challenge reached 8,000 innovators around the world over the course of a month.
Twenty-seven companies submitted novel solutions and – after a discovery session with the top seven – we are now progressing our discussions with an Australian company and hope to pilot the solution at one of our mine’s soon.
Like I said, we must embrace new ways of working.
Another illustration of how we are doing this is our Supply Innovation program.
In a nutshell, it’s a platform that’s designed to connect our unique mining challenges with local suppliers and innovators.
We started this concept in South America, it’s now running at Olympic Dam in South Australia and soon we hope to pilot it here in Queensland.
But we know we still have work to do to improve the way we engage with local businesses.
Particularly the innovators that are going to be critical to helping us remain globally competitive into the future.
In partnership with AustMine, we are proud to have recently helped establish the nation’s first truly representative forum for mining and its services sector - or METS as we know it.
The first meeting of this working group kicked off last month and key players from this region were at the table.
As we move forward, we want to use our collective networks – which crisscross the country – to drive meaningful collaboration and value creation for all.
Today I’ve spoken at length about ‘what’ and ‘how’, but as I draw to a close, I want to return to where I started - ‘why’.
Why are we here? Why now?
Because – as you say – “transformation starts today”.
It spans all industries. It’s rapidly gaining pace. And, it’s game-changing.
If we are not in that game, the future will simply leave us behind. And, the benefits will be captured elsewhere.
Clearly that’s an outcome I’m not prepared to accept.
Instead, I believe there’s enormous potential for this region to be at the forefront of the fourth industrial revolution.
I know a lot of people believe that shifting the views of Queenslanders is a difficult proposition… and some might think it’s not possible.
I don’t agree. I know the people in this region – when presented with a challenge, we lean into the challenge. And that’s what we need to do here.
Collectively, we have the opportunity to lead – but the window is small and others will go ahead of us if we don’t.
To do this, we must lean into the unknown and invent it together.
We must engage in frank conversations – like we are today – about what it actually means.
But most importantly, we must convert our conversations into action.
I applaud GW3 for bringing us all together today. Let’s use this opportunity wisely and with a sense of urgency.
Let’s work together to identify the specific actions and initiatives needed to set up our local people, businesses and industries for success.
Like I said earlier, at BHP, we are absolutely committed to bringing our expertise to the table, co-designing solutions and creating shared value.
But to be clear, this isn’t just a BHP challenge - or even a challenge that’s exclusive to mining.
It effects all of us – and it demands our collective effort.
I urge all levels of Government to come to the table too.
We know the best outcomes occur when federal, state and local governments work together.
We can never forget that regional Queensland is the engine room for the State’s economy – and it makes an enormous contribution to our nation.
And we must ensure regional Queenslanders are prepared for the future of work.
Now is the time. No one has all the answers – but we all need to step up.
So today, I say to you - join me - and let’s create this future together.
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