27 November 2019
It’s only been a fortnight since it was announced that I will be afforded the immense privilege to lead BHP as its next CEO come January 1. Of course I’ve had a number of questions since about my priorities. And my answer has been pretty consistent. Our highest order priorities remain the same but I want to spend the next six weeks getting out to BHP’s operations and offices globally to discuss views on what we can do to build upon the great work of recent years to become safer, more productive, and more valuable, more quickly.
On the theme of this conference though, I have been specific. Technology is critical to this industry. Technology will do everything I just said. It will help us lift performance. Make us safer. Reduce costs. Grow value.
It’s perhaps fitting that the first operation I visited on this tour was the Jimblebar mine, last week, here in WA. This is where we established our first fully autonomous haulage system back in 2017. Jimblebar is a great reminder for me of the opportunities provided by technology – we have significantly reduced incidents with fatal potential and we have reduced costs.
I have also spent time in the past week here in Perth and up in Singapore, including with our Technology teams. It was uplifting to hear from them the opportunities they see for the future to make this industry even safer, more productive and more competitive.
This one of the reasons why I was so keen to be here today, in spite of my schedule being tipped on its head, so I could make it to this event.
Another reason though is the immense importance of WA to BHP – with three major BHP businesses here: iron ore, oil and gas and nickel. And finally, the importance I place on more effective partnering with the Mining Equipment, Technology and Services (‘METS’) sector. I believe that through more effective partnering between producers and the METS sector, we can both uplift performance in our business and we can enable local METS companies to develop new products and services that allow them to thrive and compete on the global stage.
I’m grateful for this opportunity to join the WA government, industry colleagues, our partners, students - and all of you - to showcase this industry and the state of WA.
Given the significance of WA to the world when it comes to resources, and the significance of resources to WA, it is only fitting that it become the location for a world fair of resources technology.
Over BHP’s five decade history of mining and oil and gas operations here in WA, we have brought resources and people, together with capital and technology, to create globally significant businesses that are constantly improving and growing value, both for BHP and for the broader WA community and economy.
Today, around 12,000 BHP employees and contractors call WA home, and the flow on employment is multiples of that. We spend around A$7 billion annually in WA, with a further A$2.7 billion in capital expenditure, and we have contracts in place with around 1000 businesses locally. We are privileged to be part of communities from Leinster to Perth all of the way up to Port Hedland.
Over 125 thousand West Australians are employed directly by the resources sector. It accounts for 30% of overall economic activity in the state.
And resources royalties make up around one quarter of the state’s non-GST revenue. If ever there were a case for close collaboration between resources producers, local METS companies, communities and government, this is definitely it!
So no surprise then that when I first heard of the concept for this event, I was immediately drawn to it and was looking for ways to support.
Western Australia – global epicentre of resources innovation
As an industry we are leading innovation from right here in WA. There is perhaps no greater concentration of skilled mining and oil and gas professionals in the world, than in this state.
Ideas are brought to life in world-class ore-bodies and petroleum basins that sit side-by-side. The potential to share ideas and promote innovation is profound.
Already within our Australian minerals business we are using seismic technology from Petroleum to better understand our coal resources, produce better mine plans, reduce costs and mitigate risks.
We are using some of the safety practices being adopted in our offshore Petroleum operations to inform how we can keep people safer in our onshore mining operations, including here in WA.
Just last year, we reached out and sought support from Woodside Petroleum and Deakin University to help solve for a safety issue we were dealing with underground in one of our nickel mines down south.
We had a valve under pressure that needed to be removed, but the risks were such that we couldn’t introduce people to the area. Woodside and Deakin lent us the robots and expertise that enabled us to resolve the issue with people operating remotely. This is a great example of the sort of opportunity for collaboration and knowledge sharing between sectors that is easier here in WA than perhaps anywhere else in the world.
WA has the opportunity to cement a place as the world epicentre of resource technology and innovation.
Whether it’s automated haulage, robotics, drones, big data or artificial intelligence – we are changing the way we work.
We are enabling our people with the capability, data and technology to innovate and improve.
Today technology has helped to make us safer, more predictable and more focused than ever before. However, there is potential is so much greater. The opportunities abound.
Big things born from small starts
From WA we provide the iron ore that goes into the steel that builds schools, bridges, homes and vehicles, providing the foundation for economic growth globally. The nickel that goes into the batteries that make the energy revolution possible. And the gas that energises WA and the Asia-Pacific.
If we can continue to innovate and can capitalise on the technology opportunities to do this in a safer, more productive way, with less impact to the environment – it will be good for business, and for the world.
And this will help ensure the resources industry continues to be good for WA. Indeed the WA we know today has been built on resources.
I’m not the first to make this comparison, but in keeping with the technology theme of this conference, I think there are some parallels between WA and Silicon Valley.
Fifty years ago, Silicon Valley was still relatively early on in its journey to becoming what we know it to be today. Computers, or rather computer chips were evolving, and venture capital was on the cusp of being born.
It wasn’t a particularly well-known place outside of the narrow circles of those in the know.
Around the same time, nearly 15,000 kms across the ocean, WA was trailing the nation in terms of per capita wealth. It had a population of around just half a million. And the iron ore industry was just being developed in the Pilbara.
Fast forward to today and it’s a very different story.
Silicon Valley is now home to Apple, Facebook, Google, and Netflix.
And the Perth skyline features the logos of BHP, Woodside, Rio, South32, and FMG – symbols of this city’s preeminent role in the global resources industry.
Both have experienced ambition, growth, commitment, and reinvestment.
Both make new things possible through connecting people and technology.
Both export products that have changed the world.
I don’t want to stretch the analogy too far. Clearly very different industries. But what they have in common is the broad based prosperity that has arisen as a function of business being freed to invest, encouraged to compete, to innovate, to progress and to meet the needs of the world.
If tech made Silicon Valley, then resources have made WA
Just like tech made Silicon Valley, resources have helped to make Western Australia. The contribution of our sector to WA, Australia and the world is significant, as the Premier outlined earlier.
There still remains so much opportunity ahead for WA in resources and the industry will continue to be an important feature of both this state’s – and Australia’s – prosperity.
But our industry is experiencing rapid change
While we have a very rich history of innovation and growth in resources in WA, one of the things I love about this event is that it is fundamentally about exciting prospects for the future.
We live in a dynamic world. The opportunities are there for those who chase them. Part of staying at the forefront of the global industry and value creation, must be being able to innovate and apply technology better than others.
This is a significant focus at BHP. This will enable us to keep our people safe, reduce costs, improve reliability, and increase our capital efficiency. It will enable us to reduce our impact on the environment and it will give rise to more fulfilling jobs. A more sustainable, more competitive and more attractive industry.
You only have to cast your eyes up north to BHP’s Innovation Centre at Eastern Ridge to see what’s being made possible through technology. This is BHP’s testing centre – our proving ground for new technologies that we then export all over the world to BHP’s global operations, from right here in WA.
We already have some good, new products coming out of the Centre that are making our operations more productive.
For example, we have created an industrial ‘internet-of-things’ sensor gateway. This reliably and securely collects data from sensors on BHP mobile equipment such as trucks and vehicles, and fixed-plant equipment such as drills and conveyors.
A different team then built a tool to exploit the rich data that comes from this gateway, to make maintenance safer and more efficient. This is done by giving our maintainers live equipment diagnostics via a tablet or smartphone. It keeps them away from running equipment which is dangerous, and takes any guess work out of maintenance.
What encourages me most aside from the great operational outcomes is it only took our team 16 weeks to go from concept to first prototype of the tool.
This is the type of agility resource companies will need to be competitive in the future.
WA is also where BHP launched our first Integrated Remote Operating Centre, where we started autonomous haulage, and where we first rolled out our autonomous blast hole drills. We have since taken these concepts and deployed them into BHP operations around the world.
I am amazed by the stories of many others in the room as well who have examples of WA products and innovations that the resources industry around the world benefits from.
If you haven’t already, I would encourage you to take a short stroll through the showcase booths to see for yourself the progress that’s happening around us.
Innovation enabled through partnership
Now of course, innovation arises not only from our people but also from our partners. At BHP we’re inviting METS companies into our space to partner with us – including technology start ups. We want to bring the best minds and most entrepreneurial mind-sets to bear on improving performance.
For instance, BHP has worked with a local Perth tech start-up on our Acoustic Monitoring system. This system detects anomalies on conveyors and other rotating equipment using real-time, data powered monitoring.
It allows us to work smarter, and delivers greater reliability, lower cost and better production. It also leads to safer outcomes for our operators.
This is but one example that is a result of collaboration with a METS company – a sector that will be vital to the future of resources and the future of this state.
The ingenuity and entrepreneurial energy that exists in the METS sector holds such potential for not only companies like BHP, but for the economy and state more broadly.
Our recent supplier innovation day up in Port Hedland was a good opportunity for us to talk to local businesses about some of the challenges we’re facing and to collaborate on finding solutions. Through our Local Buy program we’ve already initiated 900 work packages in the Pilbara. We will continue to build on that.
If our industry can continue to work on ideas and solutions to make what we do better, we have the potential to generate not only more rewarding jobs but also create wealth across the entire value chain.
So in closing, the innovation and technology opportunities represented at this conference are a continuation of the spirit and entrepreneurial attitude that has made this industry and this state what it is today. We can build upon this in ways that cement WA’s position in the industry globally, and which make WA businesses safer and more competitive, including producers and METS sector companies.
Core to that will be great partnerships. The partnerships BHP has in WA have been crucial to our success and the value we have created over time.
I am committed to partnering with others to help make BHP safer and to take performance to the next level.
It’s an exciting time to be in the industry and in this state. Together we can unlock even greater value for my company and others likes us, for WA and for the world.