Preparing for unprecedented, unpredictable change Darryl Cuzzubbo, Orica
W
here is the mining sector heading?
We can predict with some confidence how some aspects of the technological trajectory will look. There will be much more automation. We will be separating ore and waste earlier in the mining process. Planning and execution cycles will be compressed from days and weeks to almost real time, and we will need a workforce better equipped with technological and analytical skills. Miners will also become data miners. But to assume that this is where it stops is to presume that new technologies and capabilities will not continue to develop even more rapidly, and that they will not open up new horizons that we simply cannot see today. This is well captured by Bill Gates in his book ‘The Road Ahead’ where he says, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction”. Reflecting on this, we are likely to underestimate the value of this change because we just cannot anticipate all the sources of value from our current vantage point. You can see this phenomenon unfolding everywhere – where one trend feeds from and then amplifies another trend, making the rate of change both
unprecedented and unpredictable. Take, for example, urbanisation and globalisation. Globally, every week, 1.5 million people are moving into cities – the equivalent of 30 times the capacity of Suncorp Stadium moving into cities. This trend has enabled a structural improvement in productivity which has helped lift 1.2 billion people out of extreme poverty since 1990. It is important to recognise that pulling 1.2 billion people out of extreme poverty could not have happened without the resources sector providing the necessary energy and raw materials for building infrastructure. Globalisation, with the productivity benefits of urbanisation, is enabling the progress of developing countries to leapfrog that of developed countries. Therefore, the future might not be defined by the countries that we would typically look to. For example, India has 10 of the 30 fastest-growing cities in the world, but today three quarters of its 1.2 billion population still lives in rural areas. The United Nations believes that over 400 million of these people will move into urban areas by 2050. That is 16 times the population of Australia becoming urbanised in the next 30 years – in one country alone. Such a massive population movement obviously has a flow-on effect for steel raw materials and copper demand. China, another obvious
example with 50% of the world’s electric vehicles, is growing its fleet at 2,800 vehicles per day compared to U.S. at 1,000 vehicles per day. When we consider this in the context of mining, we are starting to see influential, interconnected trends that will impact our sector. Technological enablers - such as cheap RFID sensors and high-speed 5G networks combined with advances in automation and analytics - will allow mine planning and operations to be optimised in real time. Such interconnected trends can be somewhat daunting, particularly when we don’t really know where they will ultimately take us. We can learn from other sectors, where success has not been dependent upon being able to predict the future but instead has rewarded those who set themselves up to manage and capitalise on a forever-changing environment. The maturity of digitisation in other sectors is a prime example. While digitisation may only be one dimension of change, we would all agree that it is an enabler for many other aspects of change. For companies in the media, logistics, and retail sectors, the entire value chain is now dominated by digital – just think of the importance of technology to companies such as Netflix, DHL and Amazon. BBMC Yearbook 2019
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