How Mobile is Transforming the Energy and Natural-Resources Sector: The New Canary in the Coal Mine – by Jon Hurdle, Mark Svenvold, Sarah Wachter (The Economist Intelligence Unit – February 2014)

http://www.economistinsights.com/home

For the full report, click here: http://www.economistinsights.com/sites/default/files/EIU%20New%20canary%20in%20the%20mine%20Feb2014.pdf

Introduction

In the historically hazardous mining industry, a new generation of mobile technologies are improving health and safety, while boosting productivity, by changing how people work in mines and plants and improving communications—often without reliance on vulnerable wireless networks.

The increasing use of devices such as handhelds, laptops and tablets is promoting the automation of work processes, speeding maintenance, aiding inspections and providing workers with step-by-step procedures that are designed to maximise production and prevent accidents. Mine operators are winning these gains even though they must operate underground or at remote surface mines, where wireless connections are often limited if available at all.

Workers or supervisors following procedures loaded onto mobile devices are less dependent on instructions received via traditional communications networks such as tracking and telemetry systems, which—whether wired or wireless—are vulnerable to rock falls, explosions or other underground emergencies.

The technology can connect with existing communications and tracking (CT) systems but is not dependent on them. If a CT system is disabled, the mobile devices will hold all of the information and tools that workers need to continue to operate safely and effectively. Built-in safety procedures designed to deter unsafe working practices can be loaded onto rugged devices capable of withstanding the rigorous conditions found in mines. For machine operators, having this information at their fingertips makes it easier for them to understand and comply with safety policies and established work and maintenance procedures, helps them to prevent failures, reduces repair time and creates a safer working environment for all.

The availability of such tools is beginning to overcome resistance from mine operators, which have been slower to adopt mobile devices than have utilities and the oil and gas industries, largely because individual mines have often lacked on-site technology support.

Introduction of mobile devices has also been hindered by cautious regulators, especially in the US, who have been reluctant to approve any new technology out of concern about the potential for electronic devices to cause underground explosions.

But the benefits are now outweighing the concerns. A global survey of 50 mining executives by the Economist Intelligence Unit (EIU) in August 2013 found that 70% believe mobile devices have prevented and reduced worker incidents and accidents, while 76% say their companies have responded more quickly to actual or potential accidents. Almost three-quarters (74%) of the executives say workers’ lives have been saved.

Sixty percent of the 150 energy and natural resources executives (including 50 from utilities and 50 from the oil and gas industry) surveyed by the EIU, attribute health and safety improvements brought about by mobile devices to the ability they have given managers and workers, especially in remote or hazardous locations, to communicate better.

While mining companies have so far lagged other energy-related industries in deploying mobile technologies, those that have made the investment are more likely to report gains in health and safety. The survey found that 84% of mining executives have seen improvement in health and safety after adopting mobile devices, compared with only 60% of utility executives and 54% of oil and gas executives.

1: Mobile solutions to tough mining problems

At a time when mining companies must dig deeper and travel farther to extract increasingly scarce materials from the earth, many are becoming more competitive by streamlining production, reducing costly stoppages and accidents and improving safety. Mobile technologies are proving to be central to achieving competitive goals, and, by preventing accidents, they are also helping mine operators respond to growing pressure from the public and regulators to improve their safety and environmental records.

Mine operators are also seeking cost savings at a time when the prices of some important commodities are falling. US copper futures, for example, dropped to $3.21 a pound in late November from $4.10 in early 2012, while gold has declined to $1,241 per ounce from near $1,800 over the same period. Reducing accidents and improving safety helps the bottom line by eliminating the costs incurred during stoppages and the grim costs associated with an operational death—which average $910,000 each, according to the US Mine Safety and Health Administration (MSHA).

Faced with a dangerous interruption, maintenance personnel could use a handheld device loaded with diagnostics to review possible causes of a failing ventilation system, for example, and then repair the problem with instructions loaded onto the device. Without this capability, ending this type of failure would require working from a hard-copy script, followed by radio communications with officials on the surface. Or a specialist from the maker of the malfunctioning system might have to be called in, resulting in a costly break in production and the exposure of workers to potentially unsafe conditions.

Similarly, handheld devices enable safety inspectors to monitor mine conditions and issue permits more quickly; supervisors and maintenance technicians are likely to use tablets, which have screens that are big enough to show large quantities of data and can be used by operators wearing the gloves that are required underground. Employees carrying tablets can also gain a broad view of underground activity, including the locations of other crews and their vehicles—a set of data previously available only to officials at the control centre.

By connecting with underground sensors, mobile devices are also able to alert operators to hazardous levels of gases and dust that can cause explosions or endanger the lives of miners.

While mobile devices are in use underground in some Latin American and Australian mines, typically to aid maintenance and inspection, they are yet to be approved for underground use in US mines, where memories of mining disasters are still fresh and a conservative culture and cautious regulatory environment have so far prevented their adoption.

David Chirdon, new technology program manager for MSHA, says the delay is being caused by device manufacturers, who believe their commercial opportunities are limited in the US market as the coal industry’s share of the power-generation market slips amid an abundance of cheap natural gas from domestic shale beds. Most manufacturers are unwilling to reveal their designs to access this small underground mining market, he says.

“Without the particulars of the designs, MSHA cannot make a determination of whether the product is a potential spark or thermal-ignition hazard,” he says, and the agency is wary after rejecting some past proposals that appeared to represent an explosion risk.

Manufacturers, who are somewhat hamstrung by US mines’ reluctance to test more than a handful of underground devices at a time, are, however, making devices for use in US surface mining.

The challenges of US underground mining have sparked other device innovations that have brought global benefits. US mines were required to install upgraded CT systems after three fatal mine incidents in 2006 led to the federal Mine Improvement and New Emergency Response (MINER) Act.

But the new systems had not yet been fully installed, however, at Upper Big Branch, a West Virginia coal mine, when a coal-dust explosion in April 2010 killed 29 miners, the deadliest US mine disaster in 40 years. For the mining companies, the disaster highlighted the need to harden underground communications technology in the hopes of having a better chance of withstanding explosions or rock falls, says Bruce Watzman, senior vice-president of regulatory affairs at the National Mining Association, a trade group for US mine operators.

The industry has now embraced the new technologies and has spent around $1bn to comply with the MINER Act, Mr Watzman said. Many companies have taken a “proactive rather than reactive approach” to compliance and, in some cases, have gone beyond the requirements of the law, he said.

Like the new generation of mobile devices, communications and tracking technology has proved its value in routine operations by making communications quicker and clearer and reducing the likelihood of production stoppages or maintenance interruptions, all of which create a safer working environment.

“Most of these systems are being used on a day-to-day basis,” said Dr Jeffrey Kohler, director of the office of mine safety and health research at the US National Institute of Occupational Safety and Health (NIOSH). “That’s really important. The last thing you want is something you tuck away in the corner and the only time you ever use it is when you have an emergency. You don’t have any confidence that it’s actually going to work.”

The application of new technologies in non-emergency situations is increasing their acceptance around the world. Forty-eight percent of mining executives surveyed by the EIU say they are more likely to utilise devices that improve communication between workers while in underground, hazardous or remote locations. By contrast, fewer oil and gas (44%) and utilities (38%) companies say they would likely use such devices.

Eighty-four percent of the mining executives say they have seen a strong or moderate improvement in the ability to detect hazardous conditions as a result of using mobile technology, while 70% say they were better able to prevent accidents.

But mining executives also had reservations about the technology, with 59% saying that decision-making was severely affected by poor data-communication capabilities and 40% saying unreliable mobile devices had that effect.

Outside underground coal mining, mobile technology is also being used to reduce a leading cause of accidents: vehicle collisions. Toronto-based Barrick Gold, for example, uses in-vehicle monitoring systems that will verbally warn a driver if he or she is exceeding a company-mandated speed limit, a key cause of collisions, and will notify the driver’s supervisor about the infraction.

Some 3,500 such devices have been installed in company vehicles worldwide, at a cost of more than $17m, says Craig Ross, the company’s vice-president for health, safety and risk. Cabs in heavy equipment such as haulage trucks are also fitted with devices that monitor the driver’s eye movements, brain waves and even facial expression to detect fatigue, he says.

Other hazardous equipment, such as conveyor belts or drills, can be protected by an electromagnetic field that triggers an alarm if it is broken by an employee who enters zones around machines that are designated off-limits. Barrick has been testing that technology at a mine in Papua New Guinea and hopes it will help employees take a proactive approach to improving their own health and safety records, rather than waiting to be warned by one of the systems.

“We want technology to change behaviour,” Mr Ross says.

For the full report, click here: http://www.economistinsights.com/sites/default/files/EIU%20New%20canary%20in%20the%20mine%20Feb2014.pdf

Comments are closed.