The Future of Quarrying – Keynote Address
By Dr Eileen Doyle
Institute of Quarrying Australia Conference
Wednesday 2 October 2019
GHMBA Stadium, Geelong
It’s an honour to be here today, to help open your 61st Conference and to share some thoughts with you on the Future of Quarrying.
Quarrying has been around for thousands of years, if not millions. Throughout history we have been digging up materials – including sand, gravel, clay and stone – for tools and materials to construct roads, buildings and infrastructure.
In some respects, not a lot has changed. But in other respects, everything has changed, particularly in recent decades. And that pace of change continues to gather momentum.
It is critically important for all of us in this industry to have a mind to the future – to keep up with the pace of change and to help ensure we have a viable and sustainable quarrying industry beyond our generation.
Today’s quarry operators must be well equipped to manage a considerable amount of complexity – and that complexity will not diminish.
It starts with extensive planning and approval processes, through to efficient operations that meet required levels of productivity, including logistics and distribution. Along the way, it includes effective understanding and management of customer needs, quality, safety, environmental impacts, community relations, industrial relations, investor relations, regulations and ultimately rehabilitation and end-use of the land.
Without doubt the bars are being raised for us to meet higher standards and more stringent requirements. Whether it’s safety, noise, dust, water or productivity – we are managing these things better than we ever have before. But we need to keep doing it better – to meet the higher standards we set for ourselves, expectations of our stakeholders and to maintain a licence to operate.
Fortunately, technology is supporting improvements and will underpin even bigger changes in the future. We need to embrace the opportunities and have confidence in our ability to continue to evolve as an industry.
Today I want to put to you some of the ways technology will shape the future of quarrying.
And I should say up front, that some of the ideas and thinking that I will highlight today have come courtesy of a group of emerging leaders in Boral who did some work on this very topic - just a couple of years ago.
As background, in late 2016, 21 young leaders came together from across the Boral Group to form the Transformation Strategy Task Group or TSTG.
In addition to their day job, the TSTG members spent 12 months considering megatrends and potential disruptions, such as urbanisation and digital technologies, that could shape Boral and our industries in the future.
Their findings covered self-driving vehicles and required changes to road construction, energy generation incorporated into the built environment, a more highly skilled workforce, lighter weight and potentially modular construction, increased mobility and customer connectivity.
The Quarry of the Future was considered by members of the team, particularly as it relates to maximising the value of our precious resources by improving productivity, reducing waste and optimising costs.
So that is a key area I am going to cover today: How digital technologies can help us to further enhance productivity and profitability – looking at it through the lens of the Smart Quarry.
But before that, I want to look more closely at sustainability, and environmental and safety management within the quarrying industry and how that needs to be at the forefront of our thinking about the future of the industry.
Finally, I will draw some conclusions around what it all might mean for you – as operators and suppliers in this industry.
So starting with sustainability, environment and safety.
SUSTAINABILITY, ENVIRONMENTAL AND SAFETY MANAGEMENT
As we continue to learn more about the environment, climate science and the impact of our workplace on the health and safety of our people, regulated environmental and safety standards will continue to increase, so will community expectations.
As we have seen through our working lives, our licence to operate will continue to be harder and harder to obtain and to maintain.
If we don’t adapt, if we don’t continually improve and set ourselves higher standards, and meet the increasing expectations of society, we won’t have an industry.
We need to be proactive in meeting higher standards in every aspect of the business. We cannot wait to be told – we can’t be left flat-footed, trying to play catch up. We need to be agile, constantly seeking ways to do things better.
Climate impacts are changing the way we operate today and it will only become more pronounced. As operators and as an industry we need to think about the role we can and should play in reducing emissions and adapting to an environment that will demand more re-use and recycling of materials that logically will replace some virgin materials.
We need to constantly ask ourselves – how can we do things better today to secure a sustainable future – to ensure we have a future?
As recycled glass, plastics and rubber are no longer landfilled but are turned into road-making materials as a matter of course, what will it mean for quarry products and production. We see the impact of demolition waste and tunnel spoils reducing demand for certain quarry products, impacting our revenues and at times creating stockpiles of lower value quarry products.
We need to anticipate the impact of recycled materials coming into the supply chain and other materials, like natural sand, becoming scarcer and scarcer. Manufactured sand, which ultimately reduces waste in the production process, will be increasingly valuable.
We might think because our products have been used throughout history they will always be used. We might think there are few threats. But the future of quarrying is not guaranteed. It’s especially not guaranteed if we don’t evolve and constantly improve.
As water becomes scarcer we need to consider how to adapt – are there better, more sustainable ways to suppress dust?
In extreme weather events, how do we effectively anticipate and manage the impacts of deluge to ensure our surrounding waterways are protected from run-off?
How do we reduce the carbon emissions from our operations and supply chains? What role can we play in using and even generating renewable energy?
There’s a lot of questions that need to be answered – challenges that need solutions.
We need to promote more innovation in our industry.
As you are, I’m incredibly proud of this industry. We all see pockets of excellence and innovation that are worth celebrating – and we do celebrate success. But we need to increase the pace of innovation. We cannot accept the status quo.
We need to reduce diesel consumption. We need to reduce water consumption. We need to reduce dust. We need to do things safer. We need to take people out of high-risk areas altogether.
It’s absolutely unacceptable to put our employees and contractors at risk in the workplace.
We must continue to engineer-out hazards. To design even better dust collection systems, and lower noise operations. To ensure the most stable bench and slope configurations are adopted in every quarry. We need to insist on the highest standards of personal protective equipment.
We need to work well with suppliers and with other industries to find solutions to the challenges and opportunities we face.
Some of you visited the Deer Park quarry yesterday. Having a landfill operating in parallel alongside the quarry is an incredibly positive sustainability story. The voids created in the quarrying process are sold to the landfill operator. To them, those voids are a scarce and valuable resource. In turn, as the non-putrescible waste breaks down, the landfill gases generated are captured as a renewable energy source – powering local manufacturing.
Urbanisation will continue to march forward, and quarrying near urban centres will only become more challenged.
Replacement quarries will necessarily be established further away from population centres.
Quarry operators will find it more and more difficult to obtain permission to extract minerals as the planning process becomes increasingly complex. We are already seeing this, right? This is despite increasing demand for our products.
Today, it is not extraordinary to spend 10 years planning and gaining the required approvals to commission a new greenfield quarry.
The biggest issues tend to arise from environmental constraints, despite the fact that many quarries actively support and contribute to ecosystem and heritage protection.
The process known as ‘conservation banking’ has become common practice in the US, and is growing in Australia and in other countries. By creating or restoring habitats elsewhere, it is possible to provide attractive conditions for habitats and species of conservation interest in advance of mineral extraction taking place, thereby removing the main obstacles to planning permission.
Such a process could over time support a significant gain for biodiversity.
All of the necessary changes around safety, environment and sustainability are likely to involve higher capital costs and certainly higher cost to transport if we are further away from our customers.
So this means we need productivity improvements and cost savings to cover these higher costs and ensure an appropriate return on investment.
Fortunately, the opportunities for this will come through technology advancement.
Digital transformation has the potential to create substantial value in the Smart Quarry of The Future. It’s essential that we embrace new technologies to protect the future of the industry.
So let me now turn to the second part of my address – digital transformation and the Smart Quarry.
DIGITAL TRANSFORMATION – THE SMART QUARRY
When we think about digital disruption, we think about the Internet of Things (IoT), big data and analytics, and artificial intelligence or robots.
Robots and automation are already with us to a large degree – in many of our quarries. Boral’s Peppertree quarry is a great example. There are no dump trucks. The mobile crusher moves with the excavator. The process is highly automated. There is very little human involvement from the time our excavator operator puts that first load into the primary crusher through to the rock being sorted into storage bays at St Peters, some 170km away from the quarry.
The advent of robotics and automation is helping the industry to reduce the most expensive cost in the process – labour. It is also making things far safer by taking people out of some parts of the process altogether.
These opportunities will continue to evolve but the bigger disruption will come from better use of data and analytics.
The Internet of Things is changing the way we live and work.
From the smart home with intelligent appliances and better-balanced energy consumption that saves you time and money, to self-drive vehicles.
The Internet of Things is defined as a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. It relies on data coming from cameras, sensors and other measuring devices.
In our quarries – much of the data is already there. We have in-line sensors picking up material size and moisture content. We have belt weighing devices and counter wheels on conveyors measuring production, speed and uptime.
We create averages and trends and set KPIs to monitor and improve quality and productivity outputs – tonnes per hour, yield per tonne, and so on.
But all of this data is largely generated for human interpretation and calculations. It’s not yet interconnected.
The lumpiness of the data constrains our ability to automatically adapt equipment and processes.
Furthermore, we are relying on indirect measures of productivity. We are not yet measuring the dollar cost or the dollar profits of productivity in real-time.
That’s where the Smart Quarry is heading. The screen that currently shows us tonnage per hour outputs will instead show dollars per hour so that production levers can be pulled in real-time – automatically.
When we start to have access to this information instantly – when it is connected – we will see real productivity improvements, cost reductions and increased value being generated from our scarce resources.
McKinsey talks about 8 key areas that will be impacted by digital disruption…
Number 1: Labour. I have already touched on technology taking people off certain tasks, resulting in reduced labour costs and improved safety – in the example of Peppertree. In Boral, CCTV and sensors on moving vehicles are helping to dramatically improve safety outcomes, not to mention the technology innovations adopted in our road transport fleet.
Number 2: Asset utilisation. The Smart Quarry will use machine learning to substantially improve predictive and preventative maintenance, reducing down time and improving profitability.
Number 3: Quality. Automated quarry product monitoring will reduce product variability and wastage.
Number 4: Customer interaction. This is about automating customer information into our own processes – making it easy for our customers to do business with us. Having customers rely on our systems and processes as well as products, has a powerful benefit of increasing the switching costs for customers and enhancing repeat business.
Number 5: Resources and processes. At the Smart Quarry, increasing product yield from the valuable resource, and reducing wastage will grow revenue. Downtime will reduce as data transmission and decision making becomes a seamless part of the process.
If we consider the whole of quarry lifecycle as the process, technology will play a critical role.
Having a vision and an integrated plan for end-use will be increasingly important in gaining planning permission for mineral extraction, and maintaining community support.
We know that when quarries are put out of action, they rarely go to waste – and some go on to have surprising and attractive end uses. Around the world including in Australia there are plenty of examples of quarries at the end of their life becoming conservation reserves, outdoor concert venues, recreational lakes, soccer stadiums, residential developments, and landfills that go on to become playing fields.
From the initial planning stages of a quarry, all the way through its lifecycle, we will see enhanced use of extremely accurate mobile and automated mapping systems. Continuous mapping and documentation of the site will not only assist with compliance and legislative reporting requirements, it will also facilitate improved communications with local communities and planning departments and support more rapid and efficient progress to end-use.
Number 6: Services and after-sales. This is where sensors and integrated connectivity will mean customers will never question our ability to deliver in full, on-time, every time.
The Smart Quarry is likely to be receiving data from sensors monitoring customers’ inventory levels – at a concrete batching plant for example. The concrete plant would also be receiving data from the cameras and lasers on their customer’s building site, which will be tracked against production plans to determine whether a concrete delivery will be needed earlier or later than initially specified. And ultimately determining what time the quarry products going into the concrete will be needed.
All of this will help to optimise the supply chain, reduce waste, lower costs and enhance revenues.
The remaining two areas that McKinsey says will benefit from digital advancements are management of:
Inventories, Number 7.
And supply & demand matching, Number 8.
The Smart Quarry will take advantage of data analytics and machine learning to speed up and slow down operations as product is truly “pulled” through the supply chain rather than pushed out as most quarries currently operate.
Working capital will reduce, as data analytics help us to better schedule and plan production and run with leaner inventory levels.
The improvements we have already seen in inventory management and production planning through the use of lasers, drones and mobile apps will continue to evolve.
Data sets coming from satellite cameras, predictive weather forecasting, labour availability, time of day energy costs, emission levels, maybe even the mood of the community on a particular day, will all contribute to faster and more accurate decision making around production and inventories.
It will improve production outputs and the way we work with our customers. Digital transformation will also help us with environmental management – to work more effectively with our communities and have safer, healthier operations.
Continuous monitoring of dust levels and noise will see data being automatically fed into networked and connected systems. Through machine learning, our quarries will be more responsive when it comes to adjusting dust mitigation measures, or timing blasts when the wind is blowing in the right direction or the population is further away from site.
Cameras and lasers will send immediate and early warning alerts before water runoff leaves a site.
Infringements and penalties will be a thing of the past!
WHAT IT MEANS FOR YOU AS A QUARRY MANAGERS, AN OPERATOR, AN OWNER, A SUPPLIER
So what will these opportunities and technology advances mean for us as quarry managers, operators, owners and suppliers?
It means we will need to have people working with us in our industry who have different skill sets than we see today in our quarries.
Over and above quarry managers and mining engineers who might naturally find it appealing to work in a hard rock or a limestone quarry, we need to attract digital technologists, programmers and data analysts who may not necessarily find quarrying as sexy an industry as we do.
Skill shortages are likely to be the norm. It’s likely that the people we will want to attract to our industry will be in strong demand and short supply.
The more exciting and innovative our industry becomes, the more successful we will be in attracting and retaining skilled workers into the field.
While our quarries of the future are likely to be further away, it’s also likely that our employees will rarely be on site. The Smart Quarry will be managed remotely, perhaps with a caretaker and security personnel on-site, and a maintenance operator.
To ensure we have the skills for the future we will need to access human capital from the broadest pool of workforce participants available. This means promoting and building diversity through all of the initiatives that attract and keep people in the workplace. Flexible, safe and healthy work practices. Creating work environments and cultures that people are proud to be a part of.
We each need to take personal responsibility for improving our own knowledge, education and learning – and do the same for our people. A well-educated and knowledgeable workforce has greater chance of taking a proactive approach to enhancing and growing the quarrying industry, rather than reacting to threats as they arise.
It’s critical that we fully understand environmental impacts from our operations to ensure the industry is doing everything possible to minimise environmental harm and where possible, improve the situation for the community at large.
To conclude, there is no doubt that the Quarry of the Future will take advantage of the application of automation technology to deliver greater levels of efficiency and productivity.
The challenge lies in using these intelligent, connected systems to extract data that will ensure that the industry’s growth is sustainable and, most importantly, that the environment is safe for our people and that we are meeting the higher standards expected of us and that we expect of ourselves.