Agile management and innovative technology will be key factors for success for the Australian mining sector in 2013 as it navigates another year of uncertain global demand, according to leading industry analysts.
“The Australian mining sector is facing a number of challenges including very operating high costs which are placing many new and potential mining projects at a cost disadvantage against overseas projects,” says ANZ, Frost & Sullivan managing director Mark Dougan. “With labour costs forming a high portion of mine operating costs, innovative technologies and increased automation will be at the forefront of the agenda.”
Mark Dougan will be master of ceremonies at this week’s COO Leaders Mining Summit 2013 in Perth, where 150 of Australia’s leading COOs will meet to discuss the current critical mining issues that affect the day to day operations of their business.
The COO Leaders Mining Summit is a two-day closed door event which brings together 150 of Australia’s leading COOs to discuss the current critical mining issues that affect the day to day operations of their business. It gives COOs within the mining sector an opportunity to learn about the latest technology and service offerings along with understanding and exchanging ideas with their peers through targeted workshops and sessions. For more information please visit www.cooleaders.com.au.
With 2013 promising to be another year of uncertainty as investment peaks and demand remains patchy, COO’s are facing a series of finely balanced decisions as they weigh up short term expediency with longer term capital investment in equipment and technology.
The recent announcement by the RBA to revise down it’s GDP forecasts to 2.5% for the current financial year and by a similar amount in the next financial year, citing the peak of the mining investment boom this year as one of the causes, clearly shows the effects of the GFC are still rippling through the Australian economy. As does the revelation that the Mining Tax only managed to rake in $126 million, $2 billion short of government hopes. But this year, there are opportunities.
“Whilst there is talk about the investment boom having peaked, we must remember that we are now entering an operational boom as many of the new projects come on-stream over the next year or so. This will drive continued strong growth in areas like mining consumables and equipment, expenditure on which has already doubled over the past 5 years,” Mark Dougan says.
The RBA highlighted the stunning 86% rise in iron ore prices since a September trough below $US87 a tonne, that should boost national income over the first part of 2013. Australian producers have responded quickly with Rio Tinto, BHP Billiton and Fortescue Metals Group all expected to post production records for 2013, according to The Australian Financial Review.
But the longer term outlook is tempered by steel prices not having kept pace, meaning that the latest run-up in the Chinese spot price to more than $US150 a tonne is unlikely to be sustained. The RBA predicts prices are likely to fall back to around $US120 a tonne, where high-cost producers in China start becoming unprofitable.
It also observes that coal prices have failed to recover and remain around 20% down on last February's levels. A fall that is likely to be locked in for much of Australia’s exports of coal for power generation, because many of the annual contracts tend to be renegotiated in March.
Combined with high Australian wages and a strong currency it all adds to the downward pressure on costs. So the sector will have to look at other ways to stay competitive. “Technology innovation and automation will be key to improving the competitiveness of Australia’s mining sector,” says Mark Dougan.
Australia may already be a world leader in automated technology, with Rio Tinto remotely operated iron ore mine in the Pilbara, an obvious example. But with technological advances in robotics and exploration in the pipeline, this may well be the tip of the iceberg.
Using current and future automated technology to cut production costs as well as improve safety will be a major focus of the COO Leaders Mining Summit. Keynote speakers include Jonathan Law, Director of Minerals Down Under Flagship, CSIRO, who will address current and future possibilities that innovative technology can offer the mining sector.