Rio's pep talk on survival tips

RIO Tinto has given a METS conference attendees a pep talk on how industry can remain productive in tough times, although market oversupply 101 was not covered.
Rio's pep talk on survival tips Rio's pep talk on survival tips Rio's pep talk on survival tips Rio's pep talk on survival tips Rio's pep talk on survival tips

Rio Tinto global head of technology and innovation Greg Lilleyman.

Marion Lopez

Instead, the iron ore major talked about innovation and partnership.

Ironically in the background, a coalition of struggling iron ore miners led by captain Andrew Forrest are partnering to survive and tackle Rio and rival major BHP Billiton – but this is not quite the type of partnership Rio had in mind.

Speaking at the METS conference in Brisbane yesterday, Rio discussed the importance of partnership in the context of innovation, uptake of new technologies and operational performance as a means to achieve strong growth and resilience in challenging market conditions.

It put its global head of technology and innovation Greg Lilleyman on the job, who began his speech by addressing the market collapse and excusing Rio from any wrongdoing.

“It seems daily media coverage and, more recently, the federal budget are full of discussion on the impact of a fall in commodity prices,” he said.

“We are seeing the commodity cycle living up to its name at present, which comes as no surprise to those of us who’ve been in this business for any length of time.”

Blaming the industry’ struggle and budget hole on the cyclic nature of the industry, Lilleyman seemed to brush off calls for government intervention, saying much of the answer to challenging market conditions should come from companies themselves and their strategies to be leaner, smarter and more productive.

As such, he said giving a talk on ‘value creation through innovation, productivity and partnership’ felt appropriate and more important than ever.

“The Australian mining sector must continue to embrace the challenge of innovation and productivity, if it is to gain a competitive advantage on the global stage over coming decades,” he said.

“Rio Tinto, for one, is already starting to deliver the next wave of productivity improvements through innovation and I’ll talk about some of this work.”

Flying over Rio’s innovative initiatives like the Mine of the Future automation-driven program, the use of big data, operations and process excellence centres, and the role of partnership, Lilleyman said these weren’t just R&D programs, but innovations focussed on outcomes.

“And for us that must be productivity,” he said.

Processing Excellence Centre

Rio Tinto's Processing Excellence Centre.

“After all delivering productivity is what it’s all about.

“As the economist Paul Krugman put it: ‘productivity isn’t everything, but in the long run … it’s everything’.

“Now Paul won a Nobel Prize, and who am I to quibble, but from my perspective productivity is everything – both in the short and long run.

“Why? Because the most productive are best equipped to shape their own futures.”

Lilleyman ran over some new technologies Rio included in its operations, such as its automated drilling systems, which were deployed in the field less than a year ago and have already generated a 10% increase in equipment utilisation and improvements in labour productivity at West Angelas in the Pilbara.

This innovation, combined with the RTVis platform (3D image and ultrasounds of deposit), also enabled a 2% increase in high grade ore recovery.

“This is where Rio Tinto truly excels, bringing innovation and technology to bear in well run operations,” he said.

“Having great assets is one thing, but a disciplined focus is also required to create sustained value.”

However, Lilleyman said these innovations would fail to yield benefits if not applied in the context of smooth operations.

“I have often said you cannot apply great technology – such as automation – to a poorly run operation and expect a good outcome. You just end up with a poorly run, high-tech mine,” he said, adding that the final ingredient to Rio’s success was its partnerships, particularly with the METS sector – which perhaps gave hope to some attendees looking for business opportunities.

“We would not have been able to achieve these productivity gains without collaboration,” he explained.

“And it is not only academic institutions; we also partner with businesses, original equipment manufacturers (OEMs) and customers.

“Partners make all the difference, opening your eyes to new applications and new horizons.”

Acknowledging the struggles the METS sector is going through, Lilleyman concluded by inviting attendees to approach Rio with new ideas on how to gain further productivity. 

“Given Rio Tinto’s scale and global procurement, strategic sourcing can seem a barrier to some smaller METS firms, but I suggest it should not be,” he said.

“If your idea is valuable at a local or mine site level, it is likely it has greater value globally to us.

“My suggestion to the METS industry is help us to continue to reinvent our business from the inside. 

“There may well be technologies from manufacturing, food processing, oil and gas or aerospace which are ripe for application.”