Mining Executive Series

Using autonomous equipment to

achieve high performance in the
mining industry
Is there a benefits case for broader adoption?

Part of a series of papers

focusing on fresh ideas
in the mining industry
2
The significant advancements in
industrial technology affecting
autonomous equipment will help
them achieve high performance.
We define
automated equipment have autonomous mining
provided a great opportunity for Accenture has been working with
mining companies to achieve a number of mining organizations equipment as
high performance. By installing to better understand the potential
impact of autonomous equipment
equipment that
technology within mining
equipment, companies can often in mine sites and what it would does not require a
mean to their business. In 2008, a
improve productivity, reduce
cost, improve safety and access major mining equipment company person physically
environments that might not be asked Accenture to help them on the equipment
possible when equipment is under evaluate the autonomous mining
human operation—helping mining market opportunity. We identified or to remotely
companies solve some of their the market opportunity and its
major drivers, and determined
control its operation.
most pressing business challenges.
the potential economic impact Automated mining
The technologies are not for different autonomous
new to the mining industry, equipment applications. equipment operates
as equipment manufacturers
Through this evaluation, we
via a programmed
have been incorporating more
advanced technological systems found real, possibly substantial, routine or is centrally
economic benefits for mining
and components into their
platforms. Already manufacturers companies. The dynamics of controlled, with
have seen improvements in deposits and demographics are relatively few people
their autonomous equipment’s increasing the potential value for
return-on-investment, mine autonomous equipment. While overseeing the
we expect mining companies
efficiency and yields.
to deploy more autonomous
operation.
The transition to autonomous equipment within the next decade
equipment has been a gradual or so, early adoption will continue
one, as autonomous trucks and to be a select group of companies
other equipment have been with a high risk tolerance and
tested for more than a decade, ample financial resources.
and remote or autonomous
equipment—such as loaders—
are not uncommon in some
underground applications.
However, the broad use of
autonomous equipment in
mine sites has yet to become
a reality, even though various
companies have “automated”
parts of their operations. To make
the necessary transformational
changes, companies need to
not only automate but also
change the way they design their
operations, manage the business
and their people, and integrate
their technologies. Before
mining companies can make this
change, they must answer first
the basic question of whether

3
Drivers influencing mine operators’ consideration
of autonomy

Accenture spoke with mining According to our research, the of flexibility when conditions
companies to understand their three areas in which autonomy change. This improvement
perspective on future industry could provide the most value in equipment performance
trends and their expectations were in improving overall mine should directly improve mine
for autonomous equipment (see performance, increasing safety productivity and yields.
Figure 1). While we heard a wide and reducing the aggregate
range of views on the potential labor requirements. In addition to reducing direct
benefits of autonomy, and when, labor costs from fewer equipment
or if, it would experience wider Performance operators, more precise and
adoption, mining companies saw consistent equipment operation
Autonomous equipment should can reduce other operating
major challenges in deploying
operate more predictably. With costs. Mining companies may
the technology and integrating
less direct operator control experience cost reductions due
it into their existing operations.
over trucks, dozers and other to less equipment wear and tear
The mining industry is confronted equipment, inherent operator- and fewer mishaps. Without
with a number of well-known induced variations in speed, load human operation, equipment
systemic challenges, including and travel as well as downtime, availability and utilization rates
limited availability of qualified should be dramatically reduced. should rise, with no downtime
labor (both local and expat), As a result, equipment could needed for shift changes, operator
remote and difficult work more frequently operate closer considerations or unplanned
environments and the unending to desired parameters, such as maintenance. Overall, these cost
need to improve yields and making loads more consistent and efficiencies can reduce capital
reduce costs to meet competitive reducing idle times, stockpiles, expenditures over a mine’s
challenges in an industry wear, and bottlenecks throughout existence. In addition, energy
where there is limited pricing the production value chain, etc., costs should be lower per unit
differentiation. and yet still allowing an element of production, as equipment

4
Figure 1. Areas in which autonomy provides the most value.

Interview responses Responses Specific drivers

69% Performance • Reduce operating volatility, improve

productivity and efficiency
• Reduce operating costs and increase
equipment life
Safety • Technology and process changes will
46% improve efficiency

38% • Reduce the number of operators—an

important overall factor in
Labor automation
• Alleviate operator fatigue issues, reduce
collisions
• Remove humans from dangerous mining
environments

• Address labor constraints, reduce labor

cost on developed areas
Performance Safety Labor
• Reduce skilled staff requirements in
remote locations

Source: Accenture research.

would operate closer to technical Skilled labor constraints

design with each cycle.
and costs
Safety The persistent supply-demand
labor imbalance—in both
The use of autonomous equipment
developed and emerging
is expected to reduce safety-
areas—has raised the cost of
related events simply through
available skilled labor. Wages
the elimination or significant
have risen over the past decade
reduction in operator presence on
in response to difficulties
equipment. Common challenges
attracting and retaining skilled
such as operator fatigue or
resources; in remote locations,
judgment errors that lead to
employee infrastructure costs
accidents could cease to occur.
such as housing have risen,
The safety improvement as have training costs and
implications should be even more other employee-related costs
critical in more dangerous and such as travel and necessities.
difficult locations of new deposits. Correspondingly, the rising
By reducing the number of cost of labor has improved
equipment operators, autonomous the value proposition for
equipment can help make mining autonomous equipment.
sites in these harsher locations If equipment fleets could
more productive and economical. become autonomous, it would
substantially reduce the direct
labor force and support staff.

5
Economics of autonomous mining

Using the research findings and economy, thereby simulating decrease, among fewer pieces
our mining industry experience, 18 different mine types to of equipment and reduced
we set out to quantify the benefits represent the universe of potential support facility costs with fewer
for autonomous mining equipment mines and the application of employees onsite, would further
and estimate the potential autonomous equipment in each.1 reduce operator-associated costs,
economic impact on the mine potentially achieving more than
site. We created an economic This categorization allowed 80 percent in potential savings.2
model of an open pit mine and us to test each type of mine
determined how the attributes equipment in a range of potential Repair costs (defined as
of automated equipment would operating environments. unscheduled maintenance)
positively, or negatively, impact should also decline as improper
a site’s performance (Figure 2). Autonomous equipment equipment operation, damage from
collisions, excessive wear and tear
In our analysis, we evaluated
reduces costs and similar issues would decline
the economics of three types of Our findings show there is under the predictable operation
equipment that are candidates meaningful economic upside of autonomous equipment. In
for open pit mine automation to deploying the equipment operations with less skilled labor,
over time: trucks, dozers and in autonomous forms (Figure repair costs tend to be even
drills. We segmented hundreds of 3). All major cost areas would higher, and the benefit of reduced
active and potential future mines be reduced, except potentially accidents would further decrease
by considering the mine size, annual maintenance costs. Labor costs. Savings could range from
whether the mine is in a remote costs will likely experience the 25 to 75 percent, depending on
location far from any major biggest proportional decrease the existing operator skill levels.
population centers and whether since autonomy reduces the The ability to more precisely
it is located in a developed, number of equipment operators control equipment performance
transitional or undeveloped by up to 75 percent. That and operational parameters

6
Figure 2. Simplified mine economic model and autonomy benefit drivers.

Financial levers Financial drivers Automation impact Financial impact

Increases hours/day $X additional output

Machine run
productivity at $X/ton
Productivity
rate +
Machines improve maintenance rating $X additional output
Downtime
to X hours per 24-hour service
-
Remove X equipment operators from $X labor savings
Operator
mine
Labor
+
Maintenance/ Increase maintenance labor rates by $X increased labor cost
support labor X percent to address equipment complexity
-
Infrastructure Removal of equipment operators $X infrastructure savings
costs decreases housing requirements by X percent
Investment
+
Annual equipment Mines invest in X equipment/year at an $X increase equipment CAPEX
CAPEX increased price of $X/equipment

Potential mine impact = $X MM

Figure 3. Annual economic impact of autonomous equipment.

Autonomous value levers Trucks Dozers Drills

Annual operating Operator labor (staff)

expenses

Maintenance cost

Repair cost

Productivity Effective utilization

Operator efficiency

Note: Items in red shows decreased performance with autonomous equipment in use.

7
will help to reduce excessive nearly eliminated by autonomous
equipment wear and damage. equipment. For example, if
manual operator effectiveness is
In contrast, annual maintenance, between 50 and 70 percent, the
scheduled repair and upkeep use of autonomous equipment
costs could rise moderately due could potentially raise that to
to greater technical complexity the 90 percent range. This could
of equipment and higher levels result in equipment productivity
of electronic content (relative increases of 20 to 40 percent.
to existing equipment). This
was considered a conservative
1 We only evaluated the impact on
assumption, given the possibility open pit metal mines, and did not assess
that the life-cycle maintenance underground mines, mixed mines or open
costs could be reduced with pit coal mines.
equipment operating more 2 We considered the mine constraints end
uniformly, lowering cumulative to end and the ramifications of autonomy
wear during its useful life. on the downstream production processes.
Additional costs would arise from With higher output levels per unit of
higher-salaried maintenance equipment (when operating autonomously),
the mine site would use fewer pieces of
personnel, given the different equipment to achieve the same output.
skills required to maintain more Alternatively, when deploying autonomous
sophisticated equipment. equipment, mines could boost output
by allowing a mine to operate closer to
Improvements in planned performance. In our experience,
we find mines often fail to achieve planned
productivity performance due to optimistic assumptions
and inadequately considering actual
The productivity of a mine’s historical performance experience.
performance is determined by
how many tons of material
are moved per each piece of
equipment (per year). In our
evaluation, we quantified how the
use of autonomous equipment
can enhance productivity on two
fronts—equipment utilization
and operator effectiveness.

Equipment utilization is measured

as the number of hours operated
per year without operator-induced
downtime. Autonomy would
increase equipment utilization
by reducing the number of
hours idle, such as during a
shift change, safety conditions
or in other situations that can
reduce the operator’s time for
safely operating the equipment.

Operator effectiveness is measured

by the tons an operator can
move per hour. Operator-induced
performance variation could be

8
9
The way forward for autonomous mining

Our analysis shows there are Miner operating model reliability rates and a higher
substantial potential economic The value balance between uptime than current equipment
benefits of autonomy for mining technology and more traditional mechanical systems. Gaining
companies. As the technology mechanical-centered operations an understanding of how to
matures and proves itself in will change. With high levels integrate such a service model
an operating environment, of technology, mine operators into site operations without
mine operators that want to could oversee, monitor and even significant risk is a mind shift that
realize an economic edge will operate vast aspects of their operators and service providers
need to prepare to integrate operation from remote command need to begin working on now.
these technologies into their centers. Operators will need to
current operations. Here Capabilities
understand how to organize their
are a few areas in which operations differently, adapt The skills required to evaluate,
autonomy will impact long- their performance management procure, integrate, support and
established business practices: approaches and rethink operate complex autonomous
operational arrangements with systems will be expensive to
vendors and service providers to develop in-house. Not knowing
effectively procure and deploy the future technical demands at
autonomous equipment. this early stage of development,
forward-thinking operators should
Service model seek out vendor alliances to
Servicing for autonomous mine access the required knowledge
infrastructure and equipment and skills more quickly.
technology requires more real-
time analytics and a rapid
response approach, with greater

10
Technology integration and understand the business may then have to deploy
Autonomous equipment will implications of that strategy now maintenance teams differently
require an integrated site is necessary so operators can with different skill sets. Such
technology infrastructure. With adopt the changes incrementally. changes may require flexible
few autonomous technology thinking to acquire or outsource
What this can amount to is the requisite capabilities. This
standards around to develop
demonstrated in this example: could be a tremendous change
this platform, mine operators
if a company wants to solve the management endeavor reaching
will be stretched to manage
challenge of improving truck procurement practices, service and
disparate systems and need
productivity using autonomous vendor-management approaches,
to begin understanding the
trucks, a substantial change performance management
complexities and possible
to mine operations will be methods and spending priorities.
solutions for their operations.
needed. These changes could
Increasingly, more companies are have a businesswide and/or site- Autonomous equipment has the
trying to do more for less (and, specific impact on operating ability to help companies achieve
hence, do not spend much on models. A mining company may high performance, but mine
new technologies), which may need to adapt to the changes operators that shy away from
seem prudent in current times. in maintenance (for example) making the necessary changes
However, if those companies of equipment and existing to integrate the autonomous
wait too long, the technologies standard operating procedures equipment into the broader
may become so integrated and and practices. It will require operation and business model
the system so dramatically integrating, deploying and will find limited success.
changed, they will find themselves managing enabling technologies
with little time to adopt vast such as GPS, visual systems and
changes. Taking the time to complex equipment performance
develop an autonomous strategy analytics. The mining company

11
Copyright © 2010 Accenture Contacts About Accenture
All rights reserved. Duncan Sloan Accenture is a global management
Accenture, its logo, and Managing director, consulting, technology services
Accenture Mining industry group and outsourcing company,
High Performance Delivered
[email protected] with more than 181,000 people
are trademarks of Accenture. serving clients in more than 120
Craig Savarese
countries. Combining unparalleled
Senior manager,
experience, comprehensive
Accenture Corporate Strategy group
capabilities across all industries and
[email protected]
business functions, and extensive
Dean Brunicke research on the world’s most
Senior manager, successful companies, Accenture
Accenture Resources operating group collaborates with clients to help
[email protected] them become high-performance
businesses and governments. The
Special recognition company generated net revenues
Thanks to Ranjan Nayak, James of US$21.58 billion for the fiscal
Patterson and numerous others from year ended Aug. 31, 2009. Its home
Accenture who participated in this page is www.accenture.com.
study.

ACC10-0123/11-1407