The Industrial Crossover era from the 1870s to 1950s was initially powered by the technological advances of the industrial revolution. Companies such as Atlas Copco, originally a railroad construction and manufacturing company, found itself needing to find new markets when railroad construction slowed. Among many forays, the company developed its first rock drill in 1905. Now, along with Sandvik, it dominates that market.
Caterpillar started as a steam-driven tractor business supplying machines used to plough soggy farming land in the early 1900s and its tractors were re-purposed for the battlefields of World War 1. However, post war and into the Great Depression Caterpillar’s business struggled, eventually crossing over into mining and construction – industries it quickly became a major player in.
As METS companies introduced powered shovels, haulage trucks, mechanised machinery, flotation cells and other technological advances into mining, this built an ever more productive industry that in turn attracted many more crossover companies. METS companies that grew rapidly in this period saw endless opportunities in taking mining from the picks-and-shovels era to one where smart machinery became the norm.
"The groundwork is now in place for what will be the most transformative era we’ve seen
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Post World War II the volume of ore being produced by mines grew dramatically, driven by exponential population growth and steadily declining grades of orebodies. This resulted in the Small-to-Huge era for METS companies. A graphic example is the size of haul trucks. In 1963 Caterpillar’s first haul truck, the 769, had a payload of 35 tons. Today’s Cat 797 has a payload of 380 tons.
Another is flotation cells, which in the 1960s were typically 12-16 cubic metres. Today Outotec’s Tankcell E630 is 630cu.m.
METS companies that did best in this era were ones that could deliver bigger and bigger products and systems to satisfy the ever-increasing scale of mining operations.
The Outsourced Operations era began in the mid-1990s as mining companies began outsourcing critical areas of their operations. This was as a consequence of the growth in scale and complexity of mining operations, the introduction of project financing and sophisticated financial instruments that led to a more rigorous focus on reducing fixed overheads and compartmentalising risk.
EPCs and EPCMs such as SNC-Lavalin and Sedgman, and mining contractors such as Thiess and Barminco, grew rapidly during this period. For METS companies, this was an era that added complexity and time to the sales cycle. Those that prospered were able to demonstrate cost savings, particularly headcount, to both the outsourcing group, and the mining company end customers.
Connected Everywhere is the era we find ourselves in today having started with the dawning of the Industrial Internet in the early 2000s.
The Internet has rapidly evolved from connecting computers with computers, to computers with “things” and now “things” with other “things”. The groundwork is now in place for what will be the most transformative era we’ve seen.
The connection with Scarlett Johansson? She plays a character, Lucy, in the sci-fi film of the same name, who undergoes an extraordinary transformation. She progresses from a normal human with standard brain utilisation of about 10% to one with 50% and superhuman insights such as the capacity to sense and analyse electromagnetic radiation. [Spoiler alert] She finally reaches 100% where she becomes connected to everything and is all-knowing and understanding.
We are heading, Scarlett Johansson-like, into a future when everything in mining is connected.
Ubiquitous sensors will feed data into analytics systems that enable operational management to make more informed decisions that result in significant benefits in areas such as ore recovery, waste reduction and machine efficiency. METS companies that will outperform in this era are those that develop products and systems leveraging all elements of this Connected Everywhere world including intelligent sensors, ubiquitous wireless networks and data analytics, to deliver actionable insights to the right management teams at the right time.
*Lex McArthur is a director of Jolimont Global Mining Systems. METS Investor appears fortnightly, exclusively, on www.mining-journal.com
