The Next Tech Punt: Mining

The Next Tech Punt: Mining

We are 29 days away from a not only a new year…but a new decade.

Meaning that as the end of 2019 draws closer, it’s time to start looking at the new trends for 2020.

Just two weeks ago I wrote that one of the key trends for 2020 was the birth of ‘mega miners’.

That is, expect to see gold miners get bigger and bigger.

Even the smaller explorers are likely to get in on all this merger activity too.

But there’s another trend I expect to develop further next year…

That’s technology.

We are going to see more and more miners becoming tech plays as much as they are mining plays.

How do I know this?

Well, it’s all because I know who to talk to…

The road to automation

I get it.

No one thinks of mining as a technology punt.

When we think of the mining sector, images of dusty old trucks the size of houses come to mind.

Yet it’s those very trucks that are in the process of becoming driverless vehicles.

Just two days ago the Sydney Morning Herald wrote that Aussie miners are racing towards automation, saying:

The push to achieve productivity gains, of course, is nothing new in Australia’s fiercely competitive resources industry.

Steady progress has been on foot for some time. Rio Tinto, the nation’s second-biggest miner, is widely considered to be the industry leader in the development and adoption of autonomous mining technologies.

More than a decade ago now, Rio set itself a vision called “mine of the future”, which has included the adoption of autonomous drills and driverless trucks.1

Rio now has the world’s biggest robot. Roughly 200 train carriages run along 1,700 kilometres of track…with nothing but a computer driving them.

BHP is in the process of automating their trucks.

In fact, back in October I was talking to a programmer at the International Mining And Resources Conference (IMARC) in Melbourne.

His job was to get mining companies to give him a truck…after a couple of months, this programmer would hand the miner a fully autonomous vehicle back.

The thing is, this is just the start of mining’s tech-heavy future.

I witnessed firsthand how augmented reality is changing how miners are being trained on plant and equipment.

Not only that, augmented reality headsets are changing how a geologist can explain an ore body to mining executives.

Picture this: After extensive exploration work, a geologist could model what they think the ore body deposits looks like. Then rather than just hand around a couple of two dimensional images, everyone could pop on a headset and ‘view’ the ore body from all angles…

Again, this isn’t some wild future prediction. The technology is available for miners to do that right now.

And there’s even more of that to come…

NASA like ideas to look for gold

Driverless trucks and headsets may seem futuristic now, but the mining sector in 2020 is going to look completely different by the end of 2030.

And nobody is more excited about the future of mining, then Rob McEwen.

Now I highly suspect you’ve never heard of him.

But chances are, you know the company he created.

Rob was the founder of Gold Corp…the very company that merged with Barrick Gold earlier in the year.

Interview with Rob McEwen

Source: Fat Tail Media

Rob started Gold Corp in the mid-90s, when it was nothing more than a patch of dirt.

Thanks to Rob’s ingenuity and foresight, it went on to become one of the most profitable gold miners in the world.

And in spite of leaving a multi-billion gold company at its peak…he’s back at it again.

Turns out, Rob is a serial entrepreneur. Someone who enjoys building things from the ground up.

He’s now running another exploration gold miner McEwen Mining Inc [NYSE:MUX].

But this time around, there’s a few differences.

When I interviewed Rob back in July, he was keen to point just how much technology would play a part in the future of mining. In fact, here’s a sneak peak of our exclusive interview:

Shae: What would you say one of the biggest changes you’ve seen in the mining industry is? Is there anything that stands out?

Rob: Some of the technology. I mean has been very progressive with automated mine equipment.

You’re starting to see artificial intelligence coming in, logic controls that weren’t there before.

The industry is probably going to be invaded by a lot of tech people and that I think will step the game up much faster.

I’m a big fan of technology and I just think that’s going to alter…If you think of it, a mine is really just a big factory with extended production lines.

And so where are all the areas you can make it perform better?

Shae: So, what I’m hearing is that technology changes are once again, going to change the face of mining.

I mean we don’t pan for gold like we did in the Australian gold rush or the Californian [one], or the Canadian gold rush anymore.

So once again, the technology going forward, it’s going to change mining companies and what we do.

Rob: How you find it, how you process it, what you use it for. We’re very much like a farmer, we’re just harvesting.

We’re not taking the product we make and refining it to a point where it’s maybe medical grade gold, which would be six nines, rather than jewellery grade four nines.

I think some technologies, nanotechnology might come along one day and someone’s going to look at the periodic table and say, “What are the properties of these various metals? Can we make it in a factory? And we don’t have to dig it out of the ground”.

Let’s just pause on that for a moment.

We already live in a world where we can create almost perfect diamonds.

Yet Rob suggests that perhaps one day we can recreate the properties of gold.

We’re probably a fair way off being able to mimic the yellow metal. But Rob makes a pretty compelling case for just how important technology is to the future of mining.

Gone are the days of just digging a big hole where you think there might be something special.

Now, technology is crucial to find not only the best deposit…but how to extract it.

Given we’ve got to dig deeper than ever before, the costs of mining will increase. Leaps in technology will be important to reduce costs to run profitable mines.

And as you’ll discover in my exclusive interview with Rob, which you can’t get anywhere else, he reckons space technology will play a huge part in future discoveries…

Talking to people like Rob is what gives investors an edge. Knowing what trends are ahead, and how an industry is changing, is the sort of crucial information you’ll need for the next decade.

Until next time,

Shae Russell Signature

Shae Russell,
Editor, The Daily Reckoning Australia

1 ‘https://www.smh.com.au/business/companies/rise-of-the-machines-why-australia-s-miners-are-racing-for-automation-20191129-p53ffo.html’