Oyu Tolgoi

Massive Mongolian mine seen as a test case for ‘lean’ techniques

Dan Headrick
28 October 2015

3 min read

As the global mining industry pushes deeper and ranges farther for vital minerals, its leading firms are just beginning to adopt “lean” techniques – common for decades in manufacturing industries – for mining greater value from their operations.

At Oyu Tolgoi on Mongolia’s vast, windswept South Gobi Desert, where nomads still watch over their herds, a new copper and gold mine stands poised to lead a struggling industry on a great leap forward. The mine, developed by British-Australian multinational metals and mining firm Rio Tinto Group, is a test case for applying the same lean principles that most manufacturing industries adopted at least three decades ago as protection from the buffeting winds of rapidly shifting markets.

Miners know rapid economic shifts all too well. After years of boom, in which demand outstripped capacity and efficiency was a luxury few had time to consider, commodity prices have sagged and new strikes are rare. Many mining companies are responding by slashing capital expenditures and pulling back on critical investments. It’s a no-growth strategy the industry has turned to time and again, closing mines, laying off workers and hunkering down until the next boom.

For the first time, however, a few innovative mines are following a different path.

“WE’RE IN THE EARLY STAGES OF A PARADIGM SHIFT IN MINING.”

MIKE MACFARLANE
ENGINEER AND MINING INDUSTRY CONSULTANT

“We’re in the early stages of a paradigm shift in mining,” said Mike MacFarlane, a Canadian engineer, industry consultant and retired executive vice president of AngloGold Ashanti, one of the world’s largest mining companies. “In the United States, the auto industry in the 1940s and ’50s had no peers; in the ’60s and ’70s, still no peers. In the ’80s, little Japanese cars changed everything. I would say the mining industry, in the little Japanese car analogy, is in the mid-’80s.”

AN AUTO EXEC TACKLES MINING

Sam Walsh, a 20-year auto industry veteran who is CEO of Rio Tinto, is among mining’s most outspoken champions of lean manufacturing.

“If I had to name one thing I have transitioned from what the automotive industry taught me across to what Rio’s mining operations are doing today, it would be an intense, laser-like focus on value and efficiency,” Walsh told the Australian and New Zealand Chamber of Commerce in Japan during Rio Tinto’s Lean Japan Tour in 2012. “At base level, it represents a concentrated intent to eliminate variation or waste at every stage of production.”

But miners don’t work in sheltered, automated factories with repetitive, predictable processes, and many mining executives argue that the industry’s unique nature makes it prohibitively difficult to apply lean practices. Mining companies, they argue, steer colossal-scale discovery, extraction and processing operations across remote, far-flung regions under conditions so harsh that the word “harsh” is an understatement. The markets for mining’s products are harsh as well, fluctuating with world markets and political upheavals, weather and natural disasters.

“IF I HAD TO NAME ONE THING I HAVE TRANSITIONED FROM WHAT THE AUTOMOTIVE INDUSTRY TAUGHT ME ACROSS TO WHAT RIO’S MINING OPERATIONS ARE DOING TODAY, IT WOULD BE AN INTENSE, LASER-LIKE FOCUS ON VALUE AND EFFICIENCY.”

SAM WALSH
CEO, RIO TINTO GROUP

Walsh, and others like him, counter that mining is a factory and should be run like one. Rio Tinto, for example, is banishing waste by pioneering new technology that includes driverless, autonomous hauling vehicles and centralized operation control centers located far from the mines themselves. More important, however, is Rio Tinto’s emphasis on collecting and analyzing data and then using those insights to coordinate automation and technology and realize efficiencies. Such efficiencies have lowered production costs, which allow Rio Tinto to invest in expanded operations such as Oyu Tolgoi, which mines the copper critical to emerging clean energy markets.

FINDING CROSS-SILO EFFICIENCIES

Lean principles also require different functions within an organization to cooperate and coordinate seamlessly. “Mining companies are very sophisticated within their operational silos,” said Emilie Ditton, a mining industry consultant with International Data Corporation (IDC) who is based in Sydney. “They do everything from optimizing truck performance to minimizing fuel costs and conveyor belt material handling efficiency. But if a production operation meets its goals and delivers products to a processing operation that can’t handle all of the material coming in, the ultimate production outcomes are not improved.”

Mining companies have assets, technology and access to data, Ditton said. “What they require is an enterprise-level data strategy.” Far more than new technology, she said, mines need organizational investment in data interpretation as a business strategy. But, she admits, taking a risk on a new idea requires strong leadership. “We don’t yet have a convincing story to tell on why we would take that risk.”

Oyu Tolgoi may provide that “convincing story.” This year, while most mining operations sell off assets and cut expenditures, Rio Tinto will begin construction on the mine’s US$5.4 billion underground expansion phase, which is expected to reach full capacity by 2021.

Oyu Tolgoi will deploy the latest mining technology. But the mine’s real game changer may turn out to be its application of proven, 30-year-old manufacturing industry ideas about extracting value from the business, not just the land.

Digital transformation

High technology is reshaping personalized health care with the Internet of Things

Laura Wilber

4 min read

The Internet of Things (IoT) is quickly reshaping every industry. But standing in the way are questions concerning security, integration and aggregation of intelligence. High-tech companies are paving the way, working to move the IoT in a direction that will benefit humanity.

Myanmar store owner Ko Min Min is a lucky man. In 2011, he was declared cured of multidrug-resistant tuberculosis (TB) after a grueling, two-year treatment that left him weak from anorexia, dizziness and joint pain. The rise of this newer, more lethal version of TB, and the deaths of 1.5 million people annually from all forms of TB – an otherwise fully curable disease – are due largely to patients’ spotty adherence to treatment regimens.

To combat this challenge, startup Proteus Digital Health in Redwood City, California, developed an ingestible sensor to enable prescription-compliance tracking. No bigger than a grain of sand, the tiny sensor can be embedded into pills.

Once swallowed, digestive juices react with chemical elements inside the sensor to create an electrochemical reaction, registered by a wearable digital patch that records the type of medicine, dosage and when the medication was taken. This data, along with vital signs, can then be transmitted via Bluetooth from the patch to a smartphone app, providing data and feedback to the patient and, with their consent, to caregivers and health care professionals.

This “digital medicine,” as Proteus calls the hybrid drug-device product, is a powerful symbol of a deep transformation underway in the health care industry, made possible by affordable, miniaturized sensors, processors and transmitters, low-cost wireless networks and mobile devices. Referred to collectively as the Internet of Things (IoT), this digital revolution is reshaping industries from manufacturing to utilities, transportation, consumer goods and, now, health care, touching everything from pharmaceuticals to hospital operations, medical-device implants and at-home patient care.

SECURITY NOW, NOT LATER

When Christian Riou, an infrastructure and security project director in the French government’s eHealth initiative, thinks about the potential of IoT to improve health care, he becomes slightly despondent.

“I think about an elderly patient in a remote area who has to travel long distances for pacemaker monitoring, about the parents who can’t embrace their infant in the neonatal unit because of the tangle of wires, and about many other scenarios in which the IoT could bring enormous and obvious benefits – but there are obstacles.”

Who, he wonders, will pay the cost of solving these challenges with IoT-enabled technology? “How do we ensure data security? How can we trust critical communications to Wi-Fi networks? And how are we going to implement such advanced technology when many hospitals are struggling just to modernize their core information systems?”

Laurent Fournier, senior director of Business Development, Qualcomm Europe, understands Riou’s concerns. “With the advent of the Internet of Things, it’s clear that every industry is becoming a high-tech industry. Some are better prepared than others for this transition, but our ambition at Qualcomm is to help them all stay focused on the IoT’s potential for their business and the customer experiences they enable. We want to address as many fundamental IoT issues as possible upstream, like security, reliability, advanced technology and economics.”

Qualcomm is addressing the challenge with a focus on smart, all-in-one semiconductor chips that integrate multiple pieces of the IoT puzzle, including connectivity, communications, sensing, navigation, embedded intelligence and image processing. At a basic level, tight integration of multiple components on a single chip enables IoT products that are smaller, smarter, cheaper, more energy efficient and more secure. Integration also makes life easier for IoT developers, giving them more bandwidth to focus on higher-level functionality and systems integration.

“WITH THE ADVENT OF THE INTERNET OF THINGS, IT’S CLEAR THAT EVERY INDUSTRY IS BECOMING A HIGH-TECH INDUSTRY.”

LAURENT FOURNIER
SENIOR DIRECTOR OF BUSINESS DEVELOPMENT, QUALCOMM EUROPE

Qualcomm’s approach resonates with Hillary Sillitto, a fellow of the International Council on Systems Engineering (INCOSE) and author of Architecting Systems: Concepts, Principles and Practice. “Guaranteeing resilience and security is the foremost challenge for the Internet of Things,” he said. “But we know how to do this. In aviation and the military, critical functionality is effectively locked down as embedded software and isolated from the outside world. And systems are engineered so that if connectivity fails, critical functionality continues.”

So far, however, Sillitto said, such advanced capabilities generally are not being applied to the IoT. “You have people leaping in without experience in high-criticality and high-integrity systems,” he said. “So the best safeguard is to rely on producers who can deliver simple, robust, high-integrity, core elements that the IoT developers can assemble Lego-style. Indeed, this is the path we must follow, because if we don’t design resilience and security into the IoT from ground zero, it’ll be virtually impossible to design it in later.”

What Sillitto refers to as “core elements” include components of both IoT devices and the networks they use to communicate. Here again, mobile industry leaders are working to facilitate secure IoT transmissions over existing cellular and Wi-Fi networks, while advancing next-generation hybrid standards like 5G, which aims to build significant intelligence, agility and security directly into global networks.

PERSONALIZED THROUGH INTELLIGENCE

Qualcomm’s Fournier points out that pushing network and device intelligence, including artificial intelligence, closer to the individual user will have the added benefit of supporting truly personalized experiences. “We are doing personalization now, but the recommendations (users receive) are not really personal,” Fournier said. “It depends on big companies like Google or Amazon pulling massive amounts of data into the cloud, then grinding through predictive analytics on aggregate data that then spits out ‘personalized’ recommendations. Moving data collection and intelligent processing, including artificial intelligence, right next to the user means we will be able to make recommendations based on an individual user’s personal context, in real time. In essence, it’s like giving each person a sixth sense and responding to them as if through a sixth sense.”

Ko Min Min did not benefit from any such technology-enabled sixth sense. His treatment was successful in large part because he was visited at home twice a day by a UNITAID-funded health care worker who ensured that he took his medicines. One day, perhaps, the IoT will produce digital companions that can watch over patients, stop drug-resistant strains of diseases before they appear and enable treatments that continually adapt to each patient in their personal context, bringing a sure and swift recovery to all.

Learn how Vitality’s GlowCap reminds you to take your medication:
https://youtu.be/Ke5nn0ffuQM

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