31 October 2017
Diane Jurgens, Chief Technology Officer
IMARC keynote speech in Melbourne, Australia, 1 November 2017
Check against delivery
I’d like to begin by acknowledging the traditional owners and custodians of the land on which we meet today, the Wurundjeri people of the Kulin Nation. I pay my respects to their Elders both past and present.
It’s great to be here at IMARC among such luminaries of the global mining industry. And it is fitting that the theme of this conference is about creating value through collaboration. What an ideal forum for us to explore the opportunities we face as technology and innovation change the global economy.
In mining, timing is everything. We must balance the incredible speed of progress with the long-term nature of mines to capture the dividends that technology can deliver.
Mining has laid the building blocks of the modern world – copper for mobile phones, steel for driverless cars and nickel for batteries. Just some of the resources that form the backbone of 21th century infrastructure.
Today, industries across the globe face disruption from a new wave of technological marvels. The emergence of advanced automation, machine learning and artificial intelligence, to name a few, present challenges and opportunities that heighten competition for talent and investment.
Having worked in aerospace, automotive and now the mining industry, I’ve watched the breath-taking pace of change.
Airplanes have moved from analogue gauges to electronic displays and from rivets to complex carbon fibre structures. Automotive telematics are becoming ubiquitous and electric vehicles are reshaping the industry.
Both of these industries have used technology to progress from 2D drawings to digital technologies such as 3D modelling, virtual assemblies and high-speed computing simulations. We are now doing the same in mining.
The challenges are not limited to the business world. Our personal lives are adapting to the pace of technology.
Just a decade ago social media played a minor role. Today it’s the primary source of news and social connection for many people. These social and consumer electronics trends are raising expectations in the workplace.
This rapid progress we are seeing was coined as the Law of Accelerating Returns, by futurist Ray Kurzweil. He asserts that in the 21st century we won’t experience just 100 years of progress – it will be more like 20,000 years of progress.
So what does this mean for mining?
It means we need to push the boundaries that conventional mining imposes. We need to connect our workforce, data and systems. We need to replicate existing technology from other industries and more importantly accelerate innovations to make our work safer, more productive and energy efficient.
So today I’d like to elaborate on the two areas that I believe will create the future of mining – integration and automation.
I’ve learned from my experiences in manufacturing the role integration plays – how lean production processes can maximise safety, value and productivity. And how technology drives further value through automation of manual procedures and improving the reliability of decision-making.
I highlight integration first as that really is the capability that connects everything, building a bridge between the present and the future. It is the centrepiece of our technology strategy at BHP as we lay the foundations for fully integrated and highly automated operations by 2025.
We know in recent times BHP has been seen as a fast follower rather than a technology leader. However, our goal to attain a leadership position is now well within reach thanks to our global asset portfolio, robust balance sheet and a commitment to invest in innovation. The scale of our ore bodies, combined with greater connectivity between our operations, allows us to more fully maximise investments and returns.
Last year we globalised our Technology function. It now spans research and development, program delivery and technology operations along the value chain that converts reserves into marketable resources. Our new operating model has helped us apply a systems engineering approach to work with our Assets to analyse mine life cycles, identify constraints and prioritise investments.
Today, we support 12 core assets, two sea ports, and more than 1,300 kilometres of rail network. This facilitates rapid replication of best practices across our operations. At BHP we have a portfolio of ongoing projects to integrate and automate across our operations.
We know this makes our work safer.
For example, we recently trialled smart caps in our Escondida copper mine in Chile – technology that measures driver fatigue by analysing brain waves. The system is now being integrated into more than one-hundred-and-fifty trucks.
It’s easy to get excited about the potential technology offers to improve safety. Personally, I think the greatest contribution technology can make is to keep people out of harm’s way.
Using a systems engineering approach, we are also integrating our operations to improve Productivity. Now we can better track supply chain output and minimise waste as we move to the next level of drill, truck, and rail automation.
Today we use artificial intelligence to automate decision-making. For example, at Mining Area C in Western Australia Iron Ore we are introducing a system that chooses which crusher the trucks should use to minimise queueing to reduce costs and idle time.
Use of advanced sensors and real-time process control can improve quality and grade delivered to processing plants, which boosts performance and reduces energy and water intensity. For instance, the BHP Precision Mining project is exploring opportunities to maximise copper output and extend the life of our Escondida mine in Chile. We are trialling advanced sensor technologies throughout the extraction process to quickly and accurately analyse the quality of copper ores.
We’ve improved our decision-making and supply chain allowing us to pinpoint bottlenecks and support our Queensland and New South Wales coal rail networks.
Over at Olympic Dam in South Australia, low cost heap leaching using chemical reactions to extract metal showed great promise during our trials. We expect to double the mine’s output to meet the expected rise in copper demand for renewable energy and electric vehicles.
We are also trialling an electric vehicle fleet in our underground operations at Olympic Dam to minimise emissions and reduce employee exposure to diesel particulates.
We have a pipeline of other process and systems integration initiatives which will improve safety, lower costs, unlock resources and create new growth projects.
The benefits will multiply when we integrate these technologies to manage our operations as a single system. More reliable operations will reduce - spare capacity, investment in equipment and the need for stock piles. Our understanding and analysis of our integrated supply chain will also help us measure improvements as we move to further automation of drill, truck and rail networks.
At BHP, we are rolling out autonomous drills to improve safety and productivity across Western Australia Iron Ore sites. Over the last year we have seen an increase in overall drill productivity and a reduction in wear and tear maintenance costs.
We have also deployed autonomous hauling at our Jimblebar Iron Ore mine and the site will be fully autonomous by year end. I recall the first time I saw one of our autonomous trucks in action. It made driver-less cars look easy by the way.
The productivity benefits of the autonomous haulage fleet at Jimblebar has helped reduced costs by around 20 per cent. Most importantly, our autonomous trucks and drills shield employees from dangerous situations.
Our path to rail automation has begun with a new 4G communications system and automated track signalling to reduce cancellations due to congestion.
Technology opportunities such as these are among the most capital efficient in our portfolio, with an average capital efficiency ratio almost twice that of our growth portfolio.
Across the industry, the potential for greater efficiencies thanks to technology is extraordinary.
In April 2017, McKinsey reported that by 2035, data analytics and robotics could produce between US$290 and US$390 billion in annual productivity savings for oil, natural gas, thermal coal, iron ore and copper producers across the globe.
And the World Economic Forum calculated digital initiatives would be greater than US$420 billion in the next decade.
An AlphaBeta study commissioned by Google reports that as automation reduces routine and manual work, jobs will become safer, more satisfying, and more valuable. The challenge is that Australia currently lags global leaders in automation with 50 per cent fewer Australian firms engaged with automation compared to leading countries.
For BHP, we are instilling a digital mindset and culture of innovation across our organisation to realise efficiency gains through both integration and automation. And this includes building partnerships within Australia.
A vital pillar to our technology strategy is building an ecosystem of partners with established and new companies – many from the METS sector. These partnerships have given us access to leading technology and outside talent to help us find solutions to complex problems.
Here in Australia, I commend the Federal Government for its plan to position Australia as an innovation leader. This now needs to translate into greater innovation investment through government, academic, and industry contributions.
For BHP this means investing in relationships with universities and we recently contributed US$3 million as part of an alliance with the University of Melbourne, Stanford and Cambridge to raise global awareness of CO2 storage and support the development of large-scale carbon capture and storage projects in the future.
I encourage you to visit the BHP Engagement Lounge today for an insight from our climate change and sustainability teams into how we are leveraging technology to reduce greenhouse gas emissions.
Other commercial partnerships are accelerating the development of technologies for safety systems, sensors, conveyors of the future, virtual mining, and predictive analytics for maintenance – to name a few.
Technology employer of choice
Infusing technology across the industry does not create excitement for everyone. There is concern about the impact on jobs, communities and businesses. We understand these concerns, and many of us here today have seen throughout our careers the need to adapt to evolving economic and technology landscapes.
The shifting job mix will also bring opportunity. That includes retraining and upskilling employees while competing against other sectors to become a technology employer of choice. At BHP, we invest in our team members to equip them with the skills to keep up with the rapid pace of change. We also recruit the brightest minds to establish a culture of innovation.
The challenge we face in Australia is a possible, actually probable, shortfall in STEM candidates - that is, science, technology, engineering and maths. BHP has proactively tackled the STEM skills gap while improving our diversity, hiring more than 1,000 people into the Technology function over the past 12 months – more than 700 in Australia alone.
Industry and governments need to invest in STEM skills at every age to ensure Australian companies can compete on the global stage. By 2030, half of the future workforce will need high-level programming, coding and software skills.
The BHP Foundation has committed more than A$55m Australian dollars over five years to Australian STEM programs to ignite interest in the field and lift academic achievement.
Technology and innovation make the future one of great promise – one that requires imagination, ideas and investment from governments and industry to take advantage of opportunities.
In the decade I spent working in China for GM, I witnessed an evolution in the Chinese government’s approach – changing the mindset from "made in China" to "innovated in China".
That's what we need from industry and government in Australia. That commitment to lead, to innovate, to create the future.
I challenge our team at BHP, and all of us, to think boldly, think creatively and bring innovation to everything we do.
Forming creative alliances, investing in the workforce and rewarding innovative thinking will spark new ideas that position mining at the forefront of progress in technology.
Improving digital infrastructure will enable us to develop our global workforce while enriching the host communities in which we operate.
We need to think big and play to win so that together we can create the future of mining.