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Resources and Energy Symposium
John McGagh
Head of Innovation
22 May 2012
Improve Productivity, to ..
• Improve safety
• Find new ore bodies
• Improve recovery rates
• Recover from difficult ore
bodies
• Remove process waste
• Improve capital productivity
• Improve labour productivity
• Reduce energy use
Why Innovate?
2 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
The productivity challenge
3 31 May 2012 [Name of conference]
The Productivity Commission report indicates declining multi-factor
productivity is a challenge for the Australian mining sector
Index of mining industry yield (1974-75 to 2006-07)
Demand outlook
Shenzhen 1982 Shenzhen 2007
4 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
Supply picture
5 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
Rio Tinto’s Mine of the Future™ programme
6 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
How we will: Explore better.
Exploit the resource better. Go underground deeper,
and faster. Recover more from difficult deposits.
And achieve all of the
above more safely
Rio Tinto Innovation network model
7 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
Africa
Europe
North
America
Australasia
Asia
Rio Tinto presence
No presence
Rio Tinto centres Formal long term (around 5 years)
alliances with world class institutions
provide Rio Tinto access to stable
research resources to pursue targeted
Rio Tinto programmes.
Technology partnerships Strategic partnerships and MoUs
with leading global suppliers to help
develop technology to commercial
outcomes.
Centre for Underground Mine Construction
Centre for Advanced Mineral Recovery
Centre for Materials and Sensing
Centre for Advanced Mineral Sorting
Centre for Mine Automation
2
1 1
2
3
4
5
1 1 1 2
3 5
6&
4 2&
8
1
7 1 3 1 4
1 5
Komatsu
Aker Wirth
Atlas Copco
e2v
Tomra
University of Nottingham
University of Western Australia 7
6
5
4
3
2
1
Herrenknecht 8
Innovation Centre
6
6
Protecting our intellectual property
8 22 May 2012
© 2012, Rio Tinto, All Rights Reserved
• Structured control & governance
• Data management & security
• Rigorous investment proposals
• Freedom-to-operate
• Patent families and walls
• Trade secrets, copyright & trademarks,
individual contracts
Idea Proof of
Concept Pilot
Demo Deploy Support
Innovation without intellectual
property protection is
philanthropy
Innovative technologies are a key differentiator
9
Our Mine of the FutureTM is shaped by four significant value levers
Find Mine Recover Develop
• Find future tier one
ore bodies
• VK1 in initial flight
trials
• Complex testing
programme in 2012
• Develop future block
cave mines safer,
faster, better
• Tunnel boring system
trials to commence at
Northparkes in 2012
• Optimise resource
productivity
• Expansion of
driverless truck fleet
• Operations Centre
• Smart drilling and
blasting
• Autonomous trains
(AutoHaul™)
• Recover more from
mineral deposits
• IronX™ iron ore
recovery pilot plant to
be scaled up in 2012
• NuWave™ copper
sorting pilot plant
being commissioned
at KUC
Innovation networks created through long term strategic alliances
Protection of Intellectual Property is key to sustaining competitive advantage
2007
Trials starts on the Operations
Centre Automated truck project
starts in Western Australia
Mine of the Future™ – surface
2008
Automated train
trial
2009/10
Automated trucks
Pilbara ‘A Pit’ trial
2010
Drillers Aid trial
2012
Cab-less Drill
2011
Komatsu MOU for 150
autonomous trucks
deployment
2010/11
Automated drills trial
Automated drills
2010
Operations Centre
commissioned
2012
Automated Train
Deployment
2008
Atlas Copco Alliance
2012
Advanced Survey
10 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
Mine of the Future™ mining practice Closed process loops – machine coordinated/driven
11 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
Unprecedented Precision & Control
• Holistic view of the operations
• Integration of islands of autonomy
• Integrated, near real-time information
• Remote supervision & operation
• Improve decision making
• High levels of predictability
• Improved productivity and profitability
• Improved safety
Operations Centre: aligning systems…
12 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
…for greater productivity
The integrated model has given far better
end-to-end visibility of the value chain
• Reduced schedule variability by
• More reliable planning and
execution functions
• Managing scheduling deviations
• Improved train dumper productivity by
• Our ability to keep trains
scheduled to the system
bottleneck (in-load)
• Tonnage throughput at dumpers
Reduce schedule variability
(2008 = 100)
Improved train dumper productivity
(2008 = 100)
100 115
127 131
2008 Average 2009 Average 2010 Average 2011 Average
100
66
52 53
2008 Average 2009 Average 2010 Average 2011 Average
13 22 May 2012 © 2012, Rio Tinto, All Rights Reserved
Automation can address declining productivity
• Investment in automation technology can
address declining productivity in the mining
sector
• Step-change innovations can deliver process
and systems efficiencies and significantly
reduce the risks to human health and safety,
as well as delivering process and systems
efficiencies, and environmental benefits
• This investment may sustain Australia’s longer-
term competitiveness in the mining industry
14 31 May 2012 © 2012, Rio Tinto, All Rights Reserved
Questions?