1079 Csiro Report Final 20130716 Updated

CSIRO FUTURES

Scenarios for ICT in Minerals and Energy in 2025

Anna Littleboy, Hannah Cook, Stefan Hajkowicz, James Deverell, Stephen Giugni

July 2013

Citation

Littleboy A, Cook H, Hajkowicz S, Deverell J and Giugni S. (2013). Scenarios for ICT in Minerals and Energy in

2025. CSIRO, Australia.

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© 2013 CSIRO To the extent permitted by law, all rights are reserved and no part of this publication

covered by copyright may be reproduced or copied in any form or by any means except with the written

permission of CSIRO.

Acknowledgements

Important disclaimer

CSIRO advises that the information contained in this publication comprises general statements based on

scientific research. The reader is advised and needs to be aware that such information may be incomplete

or unable to be used in any specific situation. No reliance or actions must therefore be made on that

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information or material contained in it.

Scenarios for ICT in Minerals and Energy in 2025 | i

Executive Summary

This report outlines a number of forward-looking scenarios for South Australia to play a larger role in

building an ICT (Information and Communications Technology) industry to support the global minerals and

energy sectors through 2025. These opportunities could help diversify the South Australian economy and

provide a stable base for job creation, innovation, and economic growth in the future.

Both the minerals and energy sectors1 play a large role in the Australian economy. The Australian “mining

boom” of the past decade has seen incredible growth in the minerals sector, fuelled by rising overseas

demand and high commodities prices. However, the recent softening in demand and decline in prices has

led to an increased focus on the twin business drivers of increasing productivity and reducing costs in the

industry.

The Australian energy sector is poised to see continued growth through the development of

unconventional coal seam gas and shale gas resources and the conversion to Liquefied Natural Gas (LNG)

for export. However, recent development of shale gas in the United States has led to a decline in global

energy prices, which is driving productivity and cost reductions in the oil and gas industry.

The need to improve productivity and reduce costs has started to drive innovation in both minerals and

energy. In addition, pressure to reduce environmental impact, improve worker health and safety, and the

need to maintain a strong social license to operate continues to fuel new innovations in both sectors.

These business drivers have created opportunities in the upstream industries that supply equipment,

technology and services into the industry. As a result, a new wave of Australian growth could be fuelled by

developing these industries through innovation and growth of skills, knowledge, and information.

ICT is a key component of both the global Mining Equipment Technology and Services (METS) industry and

the global oilfield services sector. The ICT industry is evolving rapidly in response to opportunities opened

up through the ability to manage vast datasets, to connect sensors and sensor networks to control systems,

to augment human operations with robotics and to communicate ubiquitously in real time.

As a starting point for identifying future scenarios for ICT in the minerals and energy sectors, this report

looks at both the current challenges (“pain points”) in each sector, as well as the global “megatrends”

shaping the future of resources. The six megatrends identified describe some of the social, environmental,

economic, and technological shifts that will affect the industry:

• The Innovation Imperative - productivity decline, high costs and low prices mean that mining and

energy companies will need to innovate to remain competitive;

• From FIFO to LILO - changing labour markets, lifestyle patterns and skills requirements as

operations move from fly-in fly-out to log-in log-out;

• Tell Me More – rising demand for transparent, credible and comprehensive information regarding

live sustainability performance information;

• Plugged In and Switched On – increasing connectivity between people and devices in the online

world is creating new functionality;

• The Knowledge Economy – how and why an economy captures growth in knowledge services; and

• E=MC2 – swapping energy for matter via recycling could turn business models on their head.

1 Throughout this report, “minerals” and “mining” are used interchangeably to refer to the extraction of mineral-based resources. “Energy” and “oil

and gas” are used interchangeably to refer to the extraction of petroleum resources, including unconventional gas. The term “resources” is used to

collectively describe both minerals and energy.

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Based on these trends and a broad survey of existing ICT technologies and research, this report identifies

11 scenarios – six in minerals and five in energy – for how South Australia could build a competitive

advantage in ICT services using existing capabilities to establish a strong foothold by 2025:

ICT in Minerals Scenarios

• Advanced Resource Modelling – In 2025, South Australia plays a leading role in developing

interoperability and “plug-and-play” capabilities across major METS vendors and SMEs in the

minerals sector, which leads to new opportunities in innovation.

• Interoperability for Innovation – In 2025, South Australia is a world leader in advanced resource

modelling technologies allowing deeper and more difficult resources to be profitably mined,

opening up a new wave of minerals exploration.

• Remote Operations Hub – In 2025, South Australia hosts numerous global remote operations

centres and is a world leader in the tools, skills and services required to build and maintain tele-

operation centres.

• Intelligent Processing – In 2025, South Australia plays a leading role in advancing the goal of a fully

integrated intelligent processing plant that provides feedback into the common mine model and

allows for adaptive operations.

• Human/Machine Interaction – In 2025, South Australia is a world leader in developing technologies

that allow human-controlled and autonomous machines to work safely together in a confined mine

environment.

• Crowd-sourcing Regulation – In 2025, South Australia leads the world in transparency of

environmental data, which decreases the regulatory burden on the government and improves trust

between industry and communities.

Energy Resource Opportunities

• Advanced Reservoir Simulation – In 2025, South Australia is a world leader in advanced reservoir

modelling using multiphysical predictive sub-surface models to characterise oil and gas fields at

both micro- and macro-scales, opening up new exploration opportunities.

• Monitoring and Control – In 2025, South Australia plays a leading role in the development of the

monitoring and control systems that are at the centre of the “intelligent field”, including advanced

sensors, autonomous monitoring, remote operations, and failsafe communications.

• Production Optimisation – In 2025, South Australia is a world leader in ICT technologies for

simulating and optimising production from unconventional gas fields including real-time

measurement and adjustment of flow parameters and fluid mixes.

• Smart Information Platforms – In 2025, South Australia plays a leading role in developing smart

information platforms for supply chain management, personnel management and risk

management.

• Environmental Monitoring – In 2025, South Australia leads the world by working with industry to

develop standards for the transparency of environmental data, which decreases the regulatory

burden on the government and improves trust between industry and communities.

These scenarios are normative, meaning that they each provide an “ideal” vision which can be worked

towards through strategic planning and decision making. They are also high-level and broad, with the

intention of covering the entire value chain in both minerals and energy.

The scenarios were presented to a range of South Australian stakeholders from industry, academia and

government at a “Validation workshop” held in July. They acted as “discussion starters” for this audience

and stimulated broad discussion about the role that ICT can play in enabling integration throughout the

value chain for both minerals and energy. The potential of “informatics” and training and development of a

workforce that is ready to operate in any or all of the scenarios were discussed at some length at these

workshops.

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Contents

Executive Summary i

Contents ii

1 Introduction 1

2 Information Technology and Value Creation 3

2.1 Value chains and business drivers for minerals and energy resource development............................ 3

2.2 Models for creating value in South Australia ........................................................................................ 7

2.2.1 Developing South Australian Resources ..................................................................................... 7

2.2.2 Servicing South Australian operations ........................................................................................ 7

2.2.3 Exporting South Australian skills and services ............................................................................ 9

2.2.4 Concentrating South Australian skills and innovation .............................................................. 10

3 Megatrends – The global context for minerals and energy resources 12

3.1 The Innovation Imperative .................................................................................................................. 13

3.2 From FIFO to LILO ................................................................................................................................ 17

3.3 Tell Me More ....................................................................................................................................... 20

3.4 Plugged in and Switched On................................................................................................................ 23

3.5 The Knowledge Economy .................................................................................................................... 26

3.6 E=MC2 .................................................................................................................................................. 31

4 Minerals and Energy in 2025 35

4.1 The integrated minerals value chain of 2025 ...................................................................................... 35

4.2 The integrated energy value chain of 2025 ........................................................................................ 38

5 ICT Scenarios for Mineral Resources 41

5.1 Advanced resource modelling ............................................................................................................. 43

5.2 Interoperability for Innovation ........................................................................................................... 46

5.3 Remote operations hub ...................................................................................................................... 48

5.4 Intelligent processing .......................................................................................................................... 51

5.5 Human/Machine Interaction............................................................................................................... 53

5.6 Crowdsourcing regulation ................................................................................................................... 55

6 ICT Scenarios for Energy Resources 57

6.1 Advanced reservoir simulation ........................................................................................................... 59

6.2 Monitoring and control ....................................................................................................................... 61

6.3 Production optimisation ..................................................................................................................... 62

6.4 Smart information platforms .............................................................................................................. 64

Scenarios for ICT in Minerals and Energy in 2025 | iii

6.5 Environmental monitoring .................................................................................................................. 66

7 Conclusion 67

References 68

A.1 Project Components ............................................................................................................................ 75

A.2 Megatrends and Scenarios .................................................................................................................. 75

A.3 Developing the scenarios - an analytic-deliberative approach ........................................................... 77

A.4 Describing and validating the opportunities ....................................................................................... 78

Scenarios for ICT in Minerals and Energy in 2025 | 1

1 Introduction

This report explores opportunities for South Australia to develop ICT capabilities to support both the

minerals and energy resources sectors. Both mining and oil and gas operations are moving increasingly

towards automation. Automated systems make use of sensory devices, robotics and advanced software

algorithms to replicate tasks previously conducted by humans. The rise of automation is likely to see

increased demand for highly skilled and technical jobs. The information technology industry will play a vital

role in allowing resource sector companies realise the full benefits of automation. South Australia already

has a strong information technology industry and a strong minerals and oil and gas industry. The State is

well positioned to capitalise on this opportunity.

The rise of automation in the resources sector has parallels to structural change in the manufacturing

sector in the last century. The 20th Century saw major advances in robotics in manufacturing. This led to

factory floors with fewer workers and production systems capable of vastly increased output with

minimum waste and minimum overall production cost. For example, a modern car manufacturing factory,

equipped with robotics, can produce one automobile every 16 seconds (Ward, 2013).

In the 21st Century automation is moving out of the factory and into the real world. In the defence sector,

automation is allowing driverless trucks to traverse dangerous battlefields with a capability to identify and

navigate past obstacles. Pilotless drone aircraft are becoming more common for high risk reconnaissance

missions. The transport sector is seeing the rise of automation in aviation, road and rail transit for improved

safety and efficiency. In 2011 a BMW built robot successfully drove a vehicle a distance of 170km at

motorway speeds from Munich to Nuremberg with a human driver on standby (The Economist, 2013). In

the agricultural sector robots have been developed for picking fruit and pruning vines. They are

demonstrating high levels of efficiency and effectiveness (Corbett-Davies et al., 2012).

The resources sector is well placed to take advantage of automation and the information technology

systems needed to make it work. The benefits include cost reduction, energy savings, efficient production,

environmental performance and improved safety and well being of people. Already mining companies have

invested billions into developing this new space. However, given the benefits, the uptake of automation

and advanced information technology in operational mines has been surprisingly slow. At least up until

now. Recent years have seen many oil and gas companies across the world focussed on developing fully

automatic drilling systems which are “fully independent of human workers”. Robotic drilling systems are

forecast by industry experts to become standard in the coming years (Sondervik, 2013). In the Pilbara iron

ore region of Western Australia Rio Tinto has moved more than 42 million tonnes of material with a fleet of

150 autonomous (driverless) trucks controlled from a remote operations centre in Perth (Rio Tinto

Australia, 2013).

The next few decades will most likely see continued change. The recent downturn in global minerals and

energy markets has created a new paradigm for the Australian mining sector. Companies cannot rely on

high prices to compensate for costly or inefficient production processes. The profitable Australian mine of

the coming decades will increasingly depend upon highly efficient exploration, extraction, processing and

transportation of products. This is likely to see innovation in mine site automation and the rise of related

integrated information technologies.

Why does South Australia have an opportunity? Other companies and regions will be positioning

themselves to take advantage of this emerging opportunity. South Australia meets key requirements to be

in pole position. These include:

• An existing, strong and growing knowledge and innovation sector with institutes such as The

University of South Australia, Adelaide University, Flinders University, the South Australian

Research and Development Institute and CSIRO.

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• The presence of a significant existing software and information technology industry with small

and large companies being deployed into defence (especially through the Defence Sciences and

Technology Organisation) and other industry sectors.

• A well established and advanced onshore and offshore mining sector attracting investment

from around the world in commodities such as iron ore, zinc, lead, uranium, oil and gas.

• Comparatively lower living and operating costs to other major metropolitan centres and

regions in Australia.

This report presents a narrative of the future. It develops high-level conceptual scenarios to demonstrate

the opportunities for ICT to address the key business drivers in mining out to 2025. At the heart of the

project lies the concept of scenario planning, informed by various sources of information and expertise.

Separate scenarios have been developed for minerals and energy resources. Appendix A provides a more

detailed description of the methodology used.

Section 2 establishes the manner in which the industry works to create economic value, the business

drivers this creates and the potential for ICT to support this value creation. Section 3 describes a set of

megatrends developed through evidence-based foresight. A megatrend is a significant shift in

environmental, economic or social conditions that will play out over the coming decades.

Section 4 then provides an overview of what the world might look like in 2025 given all these interacting

aspects. Sections 5 and 6 explore the possible ICT-enabled scenarios for both minerals and energy

resources in 2025. These scenarios can be used to further discussions with a wide range of stakeholders

and support the notion of South Australia playing a major role in the global mining value chain in 2025.

Specific minerals-related and energy-related opportunities that see South Australia positioned as the

minerals and energy resources services centre of Australia. They describe a possible role that South

Australia could play in the global value chain.


2 Information Technology and Value Creation

2.1 Value chains and business drivers for minerals and energy resource

development

Australian resources have long been a critical driver of economic development and value creation for

Australia. However, the process of value creation is far more complex than simply having access to the

resources. Resources in the ground have little economic value unless they can be taken through a chain of

transformations by:

• Discovering and locating them spatially through exploration;

• Extracting them from the ground and separating them efficiently from waste materials; and

• Processing them into a value-added useable form and transporting them to market.

Moreover, the economic value of a resource can only be assessed against the costs of undertaking these

transformations – whether these costs are a function of the ease of transformation, the use of resources

such as energy and water in effecting the transformation, generation of waste materials (gas, liquids or

solids) or managing the legacy of the operation.

At a superficial level, the processes of creating value from minerals and energy resources are similar – they

both rely on exploration, extraction, some level of processing and then transportation to deliver a valuable

product from operations. They both need to manage the social and environmental impacts of their

operations and both have to comply with various tiers of formal regulation and governance. Many

companies in both the minerals and energy resource sectors also choose to comply with voluntary

reporting schemes such as the Global Reporting Index.

Both sectors are driven by similar factors including productivity, cost reduction, health and safety,

management of capital and continuous flow of product to market. Both utilise technology and innovation

to achieve these goals and both have increasing technical difficulties to overcome as operations go deeper

and new unconventional or complex resources come on line.

The pattern of expenditure has similarities with major costs incurred through the establishment of

infrastructure, be it well sites for petroleum or gas production or site construction around a new mine or

processing plant. As an indication, for petroleum developments, a large proportion of total project costs are

incurred during the well site establishment phase (Figure 1) (Productivity Commission, 2009). Wells and

surface facilities account for the largest cost share in oil and gas production (IEA ETSAP, 2010). These costs

are influenced by the quality of information obtained during the exploration (and appraisal) phase,

whereby costs can increase if inadequate or insufficient information has resulted in a poorly designed

production systems (Productivity Commission, 2009).

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Figure 1. Breakdown of total upstream petroleum expenditure in Australia, 2005

Source: Geoscience Australia (2008)

Both sectors face significant challenges in operating in more hostile or difficult environments (deeper

waters, deeper mines, more complex mixtures, greater scrutiny on performance) and impact all areas

where the ICT sector has the opportunity to provide control and sensor systems to optimise operations and

improve efficiencies.

However, despite their similarities, the technologies that the two sectors use are markedly different and

the manner in which supply chains work together at each stage of the process varies. Approvals processes

are almost entirely separate and reflect strikingly different language and culture differences between the

sectors. As a result, the “innovation ecosystems” are very different between the two sectors and the

manner in which ICT services can add value is different. The relative importance of business drivers around

health and safety, environment and social impact are different, primarily reflecting the differing history of

operations for the two sectors with one having its origins primarily through onshore operations and large

excavations (minerals) and the other with a balance of onshore and offshore operations through drilling (oil

and gas).

Given these differences, two discrete value chains were developed separately for the minerals sector and

for oil and gas, onto which were mapped the key business drivers developed during the project. Figure 2

and Figure 3 illustrate these mappings and have been used to identify the key opportunity areas for ICT in

the resources sector. These operations revolve around the use of ICT to:

• Store manage and analyse large volumes of data very quickly (cloud computing, “big data”, pattern

analysis, statistical inference);

• Communicate rapidly and seamlessly between multiple devices all performing complex tasks

(automation, sensing and sensor networks, interoperability, internet of things, artificial

intelligence);

• Control complex operations remotely but with sufficient responsiveness to adapt in real time to

new data (automation, remote teleoperation, haptics, immersive visualisation, smart information

platforms);

• Manage supply chains and logistics to minimise redundancies while maximising efficiency (smart

information systems, project management, adaptive simulation); and

• Deliver credible and transparent data cleanly to multiple stakeholder groups as an indicator of

effective environmental and social performance (sensing and sensor networks, social networking).

Exploration:

Geological , 1%Exploration:

Seismic, 5% Exploration:

Other, 1%

Exploration:

Drilling, 12%

Development:

Drilling, 18%

Production and

Development:

Building and

operating

production

facilities, 61%

Production and

Development:

Other, 3%


Figure 2. Minerals business model - summary of key pain points

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Figure 3. Energy resources business model - summary of key pain points


2.2 Models for creating value in South Australia

For any jurisdiction, there are number of ways in which economic value can be derived from the business of

minerals and energy resource development. These include:

• The presence of a resource in the State or on the property can generate economic activity

attracting investment into the locality;

• The existence of a resource company operating in the locality can stimulate economic activity for

those supplying the operation;

• Skills and innovation developed as a result of experience on a resource operation can be exported

to other operations around the globe generating export revenue; and

• The concentration of skills and experience that occurs in and around a resources operation can

stimulate a focus on maintaining productivity and competitiveness through innovation.

2.2.1 DEVELOPING SOUTH AUSTRALIAN RESOURCES

South Australia has a strongly expressed confidence in the development of oil and gas resources located

within the state. For further details, Appendix B summarises the current landscape of potential operations

in terms of oil, gas (conventional and unconventional), copper, uranium and iron ore.

Any technology that enables South Australia to find its resources and then convince the market that those

resources are worth investment will assist with South Australia’s economic development. There is a strong

niche here for the use and application of ICT technologies through the management and delivery of

precompetitive datasets on the quality and location of South Australia’s known resources and unknown

potential. Precompetitive datasets contain information which does not, in their current form, provide the

holder with any commercial advantage over rival companies. However, if analysed and interpreted these

data may create a competitive advantage.

2.2.2 SERVICING SOUTH AUSTRALIAN OPERATIONS

Australian resource operations lie at the heart of a complex supply chain (Figure 4). Recent work (Scott-

Kemmis, 2013) has provided a comprehensive description of a “dynamic minerals innovation complex”

which shows that the economic opportunities arising from Australian resources are not just about the

provision of oil and gas or minerals commodities, but are also about the know-how and skills required to

deliver them.

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Figure 4. The supply chain for Australian resource sector companies


Companies operating in both the minerals and the oil and gas sectors are diverse, ranging from large

contract operators, original equipment manufacturers, engineering and construction companies to small

specialist consulting or technology firms. Suppliers in both sectors are strong R&D performers and many

firms collaborate with other firms and with research organisations for innovation.

The mining equipment and technology services sector (METS) exemplifies this complex ecosystem of

suppliers. With sales exceeding $71 billion in 2012 and total employment estimated at around 265,000

people, the rise of the METS sector has multiplied and diversified the benefits Australia derives from its

natural resource endowment. Export revenues from the sector substantially exceed those of the wine

industry and, on some measures, the automotive industry. Surveys indicate that Australia’s METS sector

has grown roughly five-fold over the past 15 years so that today there are well over 270 firms, many

leaders in their niche. Driven by the expansion of mining investment and production both within and

outside Australia, the sector has achieved a remarkable level of internationalisation, with the majority of

firms having offshore offices or subsidiaries (Scott-Kemmis, 2013; Tedesco et al., 2010).

Although the resources sector has traditionally not been heavily reliant on inputs from ICT, this is expected

to change (Ditton et al., 2012). In 2011, ICT spending in the resources sector accounts was $2.51 billion (6

percent of Australian ICT spending) and is forecast to grow at 3.8 percent (CAGR) to 2015 (Ditton et al.,

2012). This growth in resources ICT is expected to centre on productivity improvements, organisational

responsiveness and support and maintaining a low cost base. IT forms the basis for innovation in data

acquisition, modelling of ore bodies, mine sites and production operations. New sensing and

communication technologies support improved safety and productivity and enable greater automation and

remote control. The greater use of IT also changes the relationships within mining projects: between the

stages from exploration to closure; between those on site and those in remote monitoring and control

centres; between mining companies and their various suppliers; and between suppliers.

2.2.3 EXPORTING SOUTH AUSTRALIAN SKILLS AND SERVICES

ABARE-BRS (Tedesco et al., 2010) define the technology and services sector to the resource industry as

comprising of:

“...establishments that supply goods and services that embody specialist technology, innovation, intellectual

property or knowledge specific to the minerals industry. This technology is defined to include the

introduction or implementation of a new or significantly improved good, service or operational process.”

Currently, the sale of services from Australian suppliers to Australian operations exceeds sales export sales

revenue. In 2008-09, global sales revenue for the Australian METS sector estimated at $6.2 billion for

Australia sales, while export sales revenue was $2.5 billion. South Australia’s share of this revenue was

$591 million, primarily from provision of Contract Services ($278 million) and Equipment and Machinery

($216 million) into copper, lead and zinc ($191 million); gold ($120 million) and iron ore ($100 million).

One of the contributing factors to the lower export sales is that, for both the minerals and the oil and gas

sectors, the emergence of service providers has been to address challenges faced by Australian companies.

While some firms in the sector have been in existence for more than 100 years, others are recent

entrepreneurial ventures. The services landscape is diversified. Most services firms were formed by

entrepreneurs with engineering or technical training and prior experience in mining or mining-related

industries. Spin-offs from research organisations constitute a small proportion. Many firms, including

relatively small firms, are internationalising rapidly through exports and the opening of offshore offices.

Some firms are transforming their strategies, structures and organisational arrangements to support future

growth. At the same time, difficulties in attracting capital and shortages of skilled personnel, including

engineers, managers, IT and marketing professionals, pose impediments to growth.

A survey of ICT companies operating in South Australia was undertaken as part of this initiative. This survey

was sponsored by the AIIA and undertaken by Deloitte. In general, South Australia has ICT companies with

capabilities to operate across the value chain and already applied in both the minerals and the oil and gas

sectors. The deeper application and integration of this ICT capability to enable interoperability within this

diverse landscape of suppliers would open up international opportunities for equipment maintenance and

10 | CSIRO

support to some of the large original equipment suppliers and manufacturers and the major operators such

as Schlumberger.

2.2.4 CONCENTRATING SOUTH AUSTRALIAN SKILLS AND INNOVATION

A strong science and ICT capability base and minerals and energy domain knowledge exist in the university

community in South Australia. The Ian Wark Institute in the University of South Australia led an activity to

ascertain the ICT research capabilities held within South Australian universities. From late January until May

2013, over 20 university executives and leading scientists at the three South Australian universities and a

number of other important capability holders (particularly in the defence domain) were interviewed.

The study identified a broad range of strong relevant ICT capabilities, some of which, with a few minor

exceptions are not presently employed in the mining and energy space including: sensors and sensor

networks; autonomous vehicles, robotics; “management systems” such as logistics, engineering/design,

decision support systems; “big data” (unstructured data, analysis of multiple large data sets, etc); and

augmented reality, image processing / analysis.

ICT research and development relevant for the Minerals and Energy domain in South Australia is

represented by an estimated 250 academics and 250 postgraduate students. Almost 300 staff and 150

post-graduate students are working in the Minerals and Energy domain and closely related fields.

In those university institutes dealing with mining sector research in South Australia, such as the Institute for

Mineral and Energy Resources (IMER) and The Ian Wark Research Institute, there exist a number of fairly

advanced ideas about innovations that can be brought to the sector through the application of ICT.

Examples presented include ore sorting, advanced heap leaching and the use of “big data” to unravel key

factors driving the performance of process steps and entire operations.

The study found that relevant capabilities at the three universities are generally concentrated in a limited

number of organisational units (Table 1). Although these represent strong ICT capabilities, coordination

between the relevant activities and interaction with the minerals and energy industry is weak. A key

outcome was the observations that none of the ICT groups consulted had key initiatives underway

specifically for the mining sector. Defence (followed at a distance by health and manufacturing) seemed to

be the present focal areas. The main minerals sector “domain knowledge” exists at University of Adelaide

at the IMER and University of South Australia at The Ian Wark Institute. However, this research is not yet

integrated with the capabilities in ICT. Historically, there seems to be a significantly stronger emphasis on

minerals than on energy in South Australian universities.

Clearly there is an implication here that South Australia has a lot of potential for innovation at the

intersection of ICT and the resources sectors. Innovation can be defined as ‘ideas successfully applied’

(Dodgson et al., 2010). These innovations can be new to the organisation, new to the sector or new to the

world.

The Australian innovation ecosystem has been reviewed recently by a range of institutions and

organisations. Notably, this includes the Cutler Review (Cutler, 2008) and several points are made about

conditions for effective innovation. Science and research capabilities are necessary and important for

competitiveness and innovation, but are not the whole story. Linkages, partnerships and knowledge

transfer are similarly critical. These partnerships refer both to links between industry and the university

sector and to links between technology domains – which often emerge from the university sector. But for

the links to happen there needs to be awareness of opportunity. For the ICT sector to pervade the

resources industry at the point of innovation, researchers and suppliers need to have access to not only

knowledge (i.e. scientific expertise), but also people and organisational knowledge about potential

innovations, that is, ‘know how’, ‘know who’ and ‘know where’.


Table 1. Institutional homes of ICT capabilities relevant for the minerals and energy capabilities at South Australia's

universities

University Institute Key contact Relevant ICT Capability

U Adelaide IMER Prof Stephen Grano Minerals and Energy application

knowledge

IPAS Prof Tanya Monro Optical sensing

TRC Dr Bruce Northcote Networking/communications

Risk management

ACTV Prof Anton van den Hengel Image processing

Image analysis

Robotics

UniSA DASI Prof Anthony Finn Robotics

IT Systems engineering

School of

ITMS

Prof Andy Koronios Image processing

Modelling and scheduling

Artificial intelligence

Augmented reality

ITR Prof Alex Grant Satellite and terrestrial

communications

Vehicle-to-vehicle communication

Sensor network algorithms

Wark Prof Magnus Nyden Mineral Processing application

knowledge

Systems approach

Flinders CNST Prof David Lewis Nano devices

School of

CSEM

Prof John Roddick Autonomous vehicles

Data mining

Civil engineering for resources

industry

MDRI Prof Karen Reynolds Remote sensing

Simulation science

Signal and image analysis

Inter-

University

DSIC Dr Sanjay Mazumdar Application in

System of systems

Systems modelling

Information superiority (data

mining)

Entity recognition

DET CRC Application of ICT to deep drilling

and exploration geology

DSTO Dr Warren Harch Cyber

Surveillance and Space systems

Autonomous systems

Information systems

Operations analysis

Note: For full names of Institutes, see Appendix C.

12 | CSIRO

3 Megatrends – The global context for minerals and energy resources

In this study six megatrends are identified. These megatrends create the social, economic, environmental,

technological and political context for the 2025 minerals and energy scenarios. They describe the demand

and supply side forces that will reshape the information technology services industry which supports the

energy and minerals resources sectors. The megatrends identify both opportunities and challenges.

The time frame for the megatrends covers the period from today (2013) to the year 2025. However,

aspects of the megatrends are already occurring and they will continue to have impact beyond the year

2025. In this Venn diagram there are 57 unique overlap areas. One of these overlap-areas captures all six

megatrends. A highly resilient organisational strategy falls within this space. It responds to a diverse set of

identified plausible opportunities and risks.

E=mc2

Mass energy equivalence turned physics on its head. Swapping matter for energy via recycling could similarly

revolutionize business models.

From FIFO to LILOChanging labour markets, lifestyle patterns and skills requirements in

the resources sector as it moves from fly in fly out to log in log off.

The Innovation Imperative

Productivity decline, high costs and lower prices mean only the

most innovative resource projects in Australia will succeed.

The Knowledge Economy

How and why South Australia’s economy may increasingly sell know-how to the minerals and

energy sectors.

Tell Me MoreRising demand for transparent,

credible, comprehensive and live sustainability performance

information.

Plugged In and Switched On

Increased connectivity between people and devices in the online

world is creating new functionality.


3.1 The Innovation Imperative

This megatrend explores and describes a paradigmatic shift in Australia’s and the world’s resources

industry. As commodity prices fall resources companies are turning their attention to the efficiency of their

operations. The focus is on cutting costs to ensure profitability. To achieve significant cost reductions whilst

increasing production, environmental and social performance requires innovation. Mine operations in

Australia will need to innovate to become efficient or they will look offshore into developing regions where

lower costs may at some point offset higher geopolitical risk.

South Australia’s commodity exports. The ten year period from 2003 to 2012 saw remarkably strong

growth in global minerals commodities markets not experienced for the previous half-century. However,

the price growth has been accompanied by extreme volatility. Since 2012 prices for major mineral and

energy commodity exports from South Australia have taken a downward turn (Figure 5, Figure 6, Figure 7,

Figure 8). It is unlikely that prices for copper, lead and iron ore in the coming decade will be as high as they

were over the proceeding decade. This matters for the South Australian economy because these three

commodities represent 26 percent of the State’s exports which equals A$3,448 million export income per

year (DFAT, 2013) (Figure 9).

Figure 5. World copper price

Source: World Bank (2013)

Figure 6. World iron ore price


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Figure 7. World lead price


Figure 8. World average oil price

Note: Average of West Texas Intermediate, Dubai and Brent Crude Oil Prices.

Source: World Bank (2013).

Figure 9. South Australia's exports

Source: Department of Foreign Affairs and Trade (DFAT, 2013)

Lower prices call for innovation. Lower prices mean that resources companies will be focused on cost-

cutting to maintain profitability. The challenge is that Australia and South Australia remain high cost

locations for resource development activities on the global scale. Resources companies may explore the

possibility of operating in resource rich developing countries where labour, energy, water and capital costs

are substantially lower. However, developing countries typically hold much higher sovereign risk.

Therefore, the coming decade will most likely see a major innovation drive within Australia’s resources

sector aiming to reduce costs to retain profit margins. The era of high prices, which are more forgiving of

inefficient production processes, is ending. Competitiveness and profitability will depend on cost

reductions. Cost reduction will depend on innovation.

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Declining productivity. Productivity may be defined as the ratio of inputs into an industry to outputs over

time. The Australian resources sector is experiencing a prolonged period of productivity decline.

Companies, industry and government will be seeking ways via which this productivity decline can be

arrested and reversed. Ultimately this will require efficiency gains in the minerals and energy production

processes. The Australian Government Bureau of Resources and Energy Economics investigated declining

productivity in the resources sector and identified these causes (BREE, 2013):

• Deeper natural resources;

• Low yielding resources;

• Old and inadequate infrastructure (technology upgrades haven’t happened);

• Mismatch of labour and capital;

• Lumpy nature of investment;

• Commodity price volatility; and

• Mining industry in particular is about 10 years behind manufacturing in adoption of “lean” and

other productivity enhancing methods.

The decline in productivity will push governments and companies in the direction of innovation to achieve

greater efficiency. If the productivity battle is lost in Australia resources companies may move offshore

where production costs are lower. Information technology will be a vital part of the innovative solutions

which reverse the declining productivity trend.

Figure 10. Productivity growth and decline in the Australian resources sector

Source: Australian Bureau of Statistics (ABS, 2012a)

Innovation is key to productivity gains in the oil and gas sector. A recent study by the University of

Queensland Business School and Ernst and Young (EY and UQ, 2013) collected data on over 300 variables

impacting the productivity of 80 Australian oil and gas sector companies. They found innovation to be the

most single important driver of productivity. One major company-wide innovation in the past three years

was found to increase the chances of a productivity gain by 40 times. Examples of innovations being used in

the oil and gas sector included:

• Offering seed capital to develop the ideas of employees for more efficient production processes

• Operating an “innovation hub” where staff upload their ideas for the whole organisation to access,

replicate and extend.

Digging and drilling deeper. The final aspect of the innovation imperative identified here is that mineral

and energy resources are becoming much harder to access and extract. Resources companies need to drill

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16 | CSIRO

and dig deeper. This requires new and innovative systems to ensure health and safety of workers,

environmental performance standards and cost effectiveness. The trend is well illustrated by the offshore

oil drilling industry. Over the period 2000 to 2010 the average water depth of oil drilling platforms

worldwide has increased from around 1km to 3km (Muehlenbachs et al., 2013). In Australia the operating

depths for exploratory oil and gas platform developments have also increased (Figure 11). In the resources

sector the depth of over-burden is also increasing over time. For example, the minimum overburden for

Australian open cut black coal mines increased from around 200 cubic megametres (Mm3) in 1965 to

around 1,800 Mm3 by 2006 (Mudd, 2010). Increased depth increases the technical complexity of the

operation and heightens the probability of a reportable environmental or safety incident. One study

estimates that for each additional 100 feet (30m) of drilling depth the probability of a reportable incident

increases by 8.5 percent (Muehlenbachs et al., 2013).

Figure 11. Exploratory drilling depths over time for deepwater offshore oil and gas platforms in Australia

Source: Australian Petroleum Production and Exploration Association, Offshore Appraisal Drilling Statistics (APPEA,

2012)

Implications for the ICT sector in South Australia:

• The drive to cut costs will intensify. Information technology can improve the efficiency of

production. South Australia is well positioned to supply innovative products.

• Safety will continue to be an overriding concern in the oil and gas sector and the mining sector.

Modern information technology can provide systems that allow companies to dig and drill deeper

within an acceptable safety envelope.

• Innovations in information technology developed in South Australia could be exported to other

countries where the imperative is equally as strong.

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3.2 From FIFO to LILO

This megatrend explores how the resources sector workforce will shift from fly in fly out (FIFO) to log in log

off (LILO) as mine site equipment is increasingly automated. Given the size of employment in the resources

sector in South Australia and Australia, it will significantly impact the labour market. It will change people’s

lifestyle patterns, settlement patterns and introduce a requirement for new and more technical skills.

Growth in the resources sector workforce. The resources sector in South Australia and Australia has seen

substantial growth in employment over the past ten years. Today some 12,700 people in South Australia

are employed in minerals and energy extractive industries (Figure 12). These jobs create additional jobs in

the services sector of the South Australian economy. In Australia 263,000 people are employed in resources

sector jobs.

Figure 12. Full time employment in the mining sector in South Australia

Source: Australian Bureau of Statistics (ABS, 2013b)

Growth in FIFO labour models. A large component of the resource sector labour force works on a FIFO

basis. These people live some distance from the mine site where they work. They commute to the mine site

by aircraft and work on a roster-on and roster-off schedule. They may be away from home for days, weeks

or months. The high costs of providing accommodation in remote areas plus the lack of services (e.g.

healthcare, education) make FIFO a common practice. For example, the mining town of Roxby Downs in

South Australia has a highly transient population. For the 2001 census 7 percent of the people in Roxby

Downs were visitors (i.e. not at home on census night) which is just above the national average of 6

percent. By the 2011 census this grew 25 percent which is well above the national average (ABS, 2013a).

The growth was largely due to the increased FIFO worker population. Many other remote Australian mining

towns show a similar pattern such as: Middlemount, Dysart, Newman and Moranbah (ABS, 2013a).

Figure 13. Population visiting on census night in selected mining towns

Source: Australian Bureau of Statistics (ABS, 2013a)

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18 | CSIRO

The FIFO model has also been used for offshore oil and gas rigs in Australia since the late 1940s. The

offshore resource sector directly employs some 52,000 people in Australia. The model involves a fixed

number of days on the oil rig followed by a fixed number of days at home (Carter et al., 2009).

Social impacts of FIFO. The FIFO phenomenon has been heavily studied with researchers identifying

community and family impacts. Some recent studies have linked FIFO to (a) strain on marriages and family

instability (Torkington et al., 2011); and (b) drug abuse, alcoholism and crime in mining towns (Carrington,

2011). However, research has also found that many FIFO workers and families develop effective coping

strategies (Kaczmarek et al., 2008). Overall FIFO is generally considered to present more challenges to

families and communities compared to models where people work at locations close to where they reside.

The FIFO model is a necessity emerging from the lack of accommodation and services in remote Australian

mining towns.

Impact of automation on FIFO. A trend likely to impact FIFO models in the mining sector is the rise of

automation and remote controlled operations. Studies are showing that automated mining systems can

greatly reduce overall costs of mining operations with productivity increases of 25 percent (Bellamy et al.,

2011). As the technology improves the use of automated systems is likely to grow rapidly given the cost

cutting imperative. The consequence of automated mining is a significant decrease in the mine site

workforce as people are replaced with robotics and automated systems. For example, recent analysis of

mine site automation finds that:

• The Mt. Keith mine site has a traditional trucking workforce of 268. With automation only 66

employees needed to operate the trucks which represents 75 percent decline in the workforce

(Bellamy et al., 2011).

• The Mount Newman mine site mining-machine operators would fall from 468 to 117 employees.

The spill over impact would reduce overall employment in Newman by 535 persons which equates

to 20 percent of the labour market (Bellamy et al., 2011).

Mine site automation can be expected to reduce the requirement for FIFO. Remotely located control rooms

in capital cities such as Adelaide will allow more mining sector workers to commute daily to work. We are

likely to see a switch from FIFO to LILO. This will have implications for labour markets and lifestyle patterns

of people working in the mining sector.

Automated oil and gas drilling rigs. The last decade has seen major advances in automated drilling

systems. These systems have the potential to deliver major improvements in environmental and

occupational safety in addition to reducing production costs. In the past 5 to 6 years many oil and gas

companies have been focused on developing fully automatic systems which are “fully independent of

human workers”. Robotic systems are forecast by industry experts to become standard all over the world in

the coming years (Sondervik, 2013). They will have the impact of reducing to a minimum the staff required

to be present on a drilling rig.

LILO means changes in skill sets demanded. Technology advances within an industry typically translate to

increased demand for highly skilled jobs and decreased demand for low skilled jobs. A study of the Swedish

manufacturing sector over 35 years during 1965 to 1999 finds an acceleration in demand for skilled jobs as

companies intensified research and development activities (Hansson, 2000). In the United Kingdom a

similar pattern is revealed. A study examining the combined impact of technology advances and trade on

labour markets finds that during the period 1979 to 1990 high skilled jobs experienced 29 percent growth

and low skilled jobs experienced 15 percent contraction (Gregory et al., 2001). The total change in

employment was growth of 3.5 percent indicating that overall the economy benefited from technology

advances and trade. Isolating the technology component results in high skilled employment growth of 4.6

percent and contraction of low skilled jobs by 27.1 percent. The shift into high skilled jobs is repeated

across countries of the Organisation for Economic Cooperation and Development (OECD) in line with

technology advances.

The South Australian economy is likely to experienced continued growth in technology advances and trade

over the coming decades. Automation in the resources sector will boost demand for high skilled jobs and

will place pressure on low skilled jobs. Whilst the overall effect on employment and economic growth of


technology advances is positive there is a challenging transition phase. A smooth transition is largely

dependent on effective training and skills development models.

Figure 14. Changes in employment in the United Kingdom resulting from technology advances and trade, 1979 to

1990

Source: Gregory et al. (2001)


• The mining and oil and gas sectors have vastly increased employment in Australia and South

Australia as minerals and energy commodity prices boomed. A transition towards automation in

the coming decades could have far reaching implications for employment within the State.

• There is likely to be an “upshift” in skills levels with demand growing for more technically advanced

jobs. Overall, technological advances typically produce net benefits but the impacts are not always

evenly distributed.

• Automation is happening, and will grow, in both the mining and the oil and gas sectors. Adelaide

could become a hub for remote operations control centres. There may also arise a demand for

training services.

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20 | CSIRO

3.3 Tell Me More

There is a rising demand for up-to-date, transparent and credible information about the sustainability

performance of companies in the mining, oil and gas sectors. The demand comes from government,

investors, downstream companies, citizens and both current and prospective staff.

The explosion of information technology and prevalence of online social media is creating new avenues for

meeting this demand. Online tools can help a company collect, store, interpret, report and disseminate

information relating to social, economic and environmental outcomes. This information may cover

historical time series, current events and planned future performance. The information may relate to mine

sites, specific operations, geographic regions or an entire company’s or industry’s performance.

The gradual upshift in the comprehensiveness, accuracy, accessibility and detail of information is likely to

continue over coming decades. Reporting that was once discretionary or rare will become mandatory or

standard-practice. Resources companies will turn to information technology companies to help them meet

rising standards and consumer and investor expectations.

Social licence to operate. Since being introduced by an executive of Placer Dome, Jim Cooney, in 1997 at a

World Bank meeting the phrase “social licence to operate” now has widespread use and acceptance within

the resources sector (Lacey et al., 2012). It is generally considered to imply that a company reaches a

standard of performance above and beyond the minimal legislated and/or regulatory requirements. Today

large companies refer to the importance of maintaining and enhancing their social licence to operate within

their strategic plans. For example, Rio Tinto aims to “increase our capacity to gain and maintain a social

licence to operate” in social inclusiveness and gender equality policies (Rio Tinto, 2009). Other companies

referring to the importance of social licence to operate include BHP Billiton, BP, GlencoreXstrata and many

others. The concept, and desire, of perming above and beyond minimum standards to achieve community

support is likely to be of increasing importance to resources companies into the future.

The rise of sustainability reporting. Today 95 percent of the world’s 250 largest companies conduct

sustainability reporting on a regular basis. In 1999 this was only 35 percent. What was once discretionary

and unusual quickly obtained mainstream status. The major drive comes from demand by investors, staff,

government and the community to know about the environmental and social performance of the company.

Figure 15. The rise of sustainability reporting

Source: KPMG (2011)

Levels of reporting tend to be higher in advanced economies. In the United Kingdom 100 percent of large

companies use sustainability reporting. This compares to 99 percent in Japan and 83 percent in the United

States. However, the developing world is in the phase of rapidly increasing sustainability reporting by

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companies. From 2008 to 2011 sustainability reporting in large Mexican companies jumped from 17

percent to 66 percent. Over the same time period in South Africa there was a jump from 45 to 97 percent.

The KPMG report identifies 16 industry sectors. Of these the resources sector comes to the top with 84

percent of large companies reporting their sustainability performance (KPMG, 2011).

Rising standards for sustainability reporting. The future is likely to see an “upshift” in standards for

environmental and social reporting. The Global Reporting Initiative is currently the most widely applied

standard. This year the G4 updated guidelines were released which introduce new requirements for

disclosing governance, ethics and integrity, supply chains, anti-corruption and GHG emissions (GRI, 2013).

Standards for timely, accurate, comprehensive and independently verified information are likely to rise

over the coming decade. Companies are likely to continue to meet these new standards as they upgrade

their own reporting systems. This holds opportunities for internet and computer based tools to improve the

recording and reporting of information.

The demand for transparency. The demand for transparency is coming from all directions: citizens;

governments; companies and NGOs. The recent and rapid rise of the Extractive Industries Transparency

Initiative (EITI) illustrates this trend (Figure 16). Numerous academic and industry reports during the 1990s

relating to mismanagement of resources sector revenues, often discussed under the heading of “the

resource curse”, called for greater transparency. In 2001 the energy company BP published royalty

payments relating to its oil projects in Angola. This led to much controversy and the CEO of BP, Lord John

Browne, called for a coordinated approach. Actions to improve transparency were coming from corporate,

community and government sectors.

Figure 16. Countries issuing reports under the Extractive Industries Transparency Initiative (EITI)

Source: Extractive Industries Transparency Initiative Website (http://eiti.org/countries/reports)

In 2002 the British Prime Minister Tony Blair announced the EITI at the World Summit for Sustainable

Development in Johannesburg. Today 39 countries implemented the EITI with 23 reaching compliance.

Over 70 major oil, gas and mining companies had formally expressed support for the EITI principles. A total

of 33 countries have issued EITI reports and disclosing revenues of $1,008 billion (EITI, 2013).

Ways to improve the EITI are being suggested and some groups would like to see it become mandatory.

However, it is largely considered a successful initiative by industry, government and community groups.

One view is that the EITI needs to broaden its focus from reporting royalties towards transparency in all

aspects of resources development (Aaronson, 2011).

This trend points towards growing demand for transparency within the resources sector. The demand is

coming from multiple angles including many of the resources companies themselves.

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Ethical investors want environmental and social information. A recent study finds that one in every eight

individual investors is willing to forgo financial returns to achieve ethical principles. Variables associated

with increased propensity for ethical investment include being female, being well educated and working in

empathetic professions (e.g. healthcare, teaching). It is estimated that 11 percent of all United States funds

are managed within ethical guidelines (Säve-Söderbergh, 2010). In the United States some US$3.74 trillion

funds were managed under social responsible investment (SRI) during 2012. This represented a 22 percent

increase since 2009 (Dilla et al., 2013). Ethical investors, and funds managers, will seek out data about a

company’s environmental and social performance prior to making investment choices.

Information discovery in a complex regulatory context. Since 2006 the South Australian government has

been running a red tape reduction program. Independent evaluation by Deloitte finds savings of $170

million for phase one of this program. Phase two commenced in 2009 of this program is expected to yield

savings of $150 million (DMITRE, 2009). From a national standpoint considerable challenges still exist. For

example, the oil and gas sector in Australia must respond to 22 petroleum and pipeline laws and 150

statutes governing upstream petroleum activities (Productivity Commission, 2009). Government and

industry are actively exploring ways to reduce the regulatory burden. This burden is felt jointly by

government departments and private companies. Innovative solutions that allow the important functions

of regulation to continue, and improve, over time whilst reducing the cost are of much value. This is likely

to push governments in the direction of advanced online tools which facilitate efficient, effective,

transparent and trustworthy information sharing between stakeholders.

Sustainability reporting and information technology. The practice of reporting a company’s financial,

environmental and social performance data once every year, through an annual report, may become old

fashioned. Information technology has already transformed organisations through enterprise resource

planning (ERP) systems. These systems are used to continuously record and monitor operational

information. They automate tasks such as inventory replenishment. However, in the future enterprise

resource planning systems may evolve into “entire resource planning” systems. A recent study in the field

of informatics (Xu, 2011) suggests that next generation enterprise systems will need to handle raised

“expectations for sustainable economic growth and global environmental protection” (p 632). The authors

continue by saying a “key characteristic of the new system is the provision of comprehensive coverage of all

relevant types of resource planning”. Next generation enterprise systems could capture and report all

relevant social and environmental data for instantaneous publication on the company’s website and/or

provision into automated systems designed to mitigate risk. The enterprise software business is large and

multi-faceted. By one estimate global spending on enterprise application software was US$120.4 billion in

2012 up from US$115.2 billion in 2011 (Gartner, 2012).


• The growth of sustainability reporting represents a major shift in the corporate landscape. This

phenomenon has been fuelled largely by innovation in the private sector. What was once optional

is now seen as mandatory. What will the standards look like in another ten years time?

• The concept of the social license to operate features heavily in corporate strategy and policy

documents in the mining and oil and gas sectors. There is recognition by companies they need

broad social support for their projects to succeed. This is likely to grow and evolve over the coming

decade.

• A crucial component to the social license to operate is transparency. Where people cannot easily

understand and see the activities of a company, distrust can emerge. Transparency improves trust

and builds an evidence base for social discourse about the resource sector.


3.4 Plugged in and Switched On

This megatrend explores the incredible growth of digital data, device connectivity and communication in

the online world. These trends are creating powerful new resources and meta-level functionality which did

not previously exist. The rapid advances in digital connectivity are changing the way companies do

business.

Bigger big data. Every day the world generates 2.5 quintillion bytes of data. The rate of data generation is

escalating rapidly. It is estimated that 90 percent of today’s data was generated in the last two years (IBM,

2013). As the number of websites, internet users and sensory systems continues to grow, so too will the

size of the world’s data. The explosion of data has been accompanied by the rise of the field of big data

analytics. This new field of information technology is aims to uncover patterns, events and trends in large

digital datasets to inform people’s choices. Coming decades are likely to see growth in this field and the

industry as new technologies are developed and applied. For example, within the oil and gas industry

Chevron is making use of a major big data analytics technology called “Apache Hadoop”. This is an open

source software framework which divides the application into many small fragments of work. Chevron are

using Hadoop to analyse seismic data to identify reservoirs of oil and reduce the costs of sending ships into

deep ocean waters (King, 2012).

The Internet of Things (IOT). The number of devices connected to the Internet exceeded the number of

people on Earth in 2010. By 2020, this ratio is predicted to increase to almost 7:1 (Evans, 2011). The IOT is

an evolving concept and represents a revolution of the Internet as we know it. Now, not only are increasing

numbers of smartphones, medical devices, temperature sensors and laptops connecting to the web, but

objects like clothing items, coffee machines and thermostats are also able to communicate within this

virtual network. By giving seemingly unrelated objects the ability to speak the same language, we are

moving away from a siloed method of information gathering and interpretation. As this network becomes

more populated and more diverse, we will have a richer pool of raw data which will allow us to draw new

conclusions and insights by incorporating information from a variety of data sets. Additionally, as these

devices become better at gathering information, we will no longer require humans to perform manual data

processing, thus paving the way for enhanced “big data” analytics. And as these objects become better at

communicating with each other, another window of opportunity in the realm of machine–to–machine

communication, automation and remote control will open. The IOT ultimately means that these physical

objects become themselves active participants in the acquisition of data and the control of their systems

(Ashton, 2009).

The technology exists; we just need to plug it in. Much of the enabling technology for the IOT already

exists. For some time now we have been able to track objects in space using geographical positioning

systems (GPS) and unique radiofrequency identification (RFID) tags. We are able to do this because the

RFID tags can communicate with a tracking system without any human system intervention. These are in

extensive use in the retail sector, material supply chains and in industrial safety systems. There are many

other existing sensors and networks of sensors which do not themselves interact or converse with each

other but which can be referred to by centralised servers. For example, global roaming capabilities in smart

phones, telecommunications hubs and smart energy systems all operate on this base – dispersed objects

connected to each other via a centralised system.

However, in order for these separate networks to connect, and in order for objects to be able to identify

and communicate with each other, standardised naming protocols and enhanced security applications are

required. These too are being developed – for example through the evolution of the ‘semantic web’

concept advocated by Tim Berners Lee (1999). The idea is based on developing naming protocols that can

uniquely identify all things, not just those that are electronic, smart, or RFID-enabled. For example, the

Dutch start-up Sparked, implants sensors into the ears of cattle in order to track and monitor their activity.

The animal’s health, movements, and position are available on a server for access by farmers, who can

respond accordingly (Jefferies, 2011). This technology evolution is enabling a far wider range of objects to

be accessed and interrogated by agents (such as centralised servers) acting for their human owners. The

24 | CSIRO

consequence of this is that the number of objects interacting with the Internet will continue increasing

exponentially. New Internet protocol systems such as Internet Protocol Version 6, also address this concern

by theoretically providing a limitless supply of names to identify objects, and enhanced security within the

network (Atzori, 2010).

Information flows in a world of four (not six) degrees of separation. It was in 1967 that Stanley Milgram

published his work on the “Small World Problem” in which people sent postcards to an identified recipient

by passing them through known acquaintances. The average number of intermediaries was found to be

between 4.4 and 5.7 people. This led to the folklore concept of “six degrees of separation” which was later

the title of a 1990 play by John Guare and a 1993 movie adaptation directed by Fred Schepisi. The idea is

that every person on earth connected to every other person on earth by no more than six acquaintances. In

2012 researchers from Facebook and the University of Degli Studi di Milano in Italy tested the concept on

the entire Facebook network which at the time had 721 million users and 69 billion friendship links

(Backstrom et al., 2012). The average distance found in this study was 3.74 intermediaries (degrees of

separation). The online world is bringing people closer together and increasing the speed and distribution

of information flows. This will continue to have a profound impact on how people obtain, trust and use

information in decision making into the coming decades.

New public relations risks. Social media has created the means by which the experience of one consumer

can be shared with millions. This was the case with a professional musician and United Airlines. After

United Airlines refused to compensation for allegedly breaking a $3,500 guitar, the musician wrote a song

“United Breaks Guitars” which he posted on YouTube. This was subsequently viewed by over 12 million

people and received media coverage on the internet, print and on television. As this happened United

Airlines stock dropped by 10 percent wiping off US$180 million of shareholder value (WEF, 2013). The

consumer now has the capacity to share their experiences, whether good or bad, with global audiences.

This creates a new public relations challenge. Companies within the oil, gas and mining sector are

vulnerable to this risk. Software solutions, systems and processes which allow them to manage and

respond to such incidents are likely to be under demand.

Crowd-sourcing exploration – an amazing success story. A write up in Bloomberg (Tapscott et al., 2007)

describes how a Canadian mining company Goldcorp was struggling to locate gold deposits on its Red Lake

property in Ontario. The company chief executive officer, Rob McEwen, tried a novel approach. They

published all the company’s proprietary geological data relating to gold deposits within the property on a

public website. They offered cash prizes worth US$575,000 to anyone who could identify successful sites.

The company attracted more than 1000 virtual prospectors from 50 countries. They identified 110 target

sites of which 80 percent yielded large quantities of gold. The winning entrant was a Western Australian

geological survey company Fractal Analysis. The subsequent mining activities produced 8 million ounces

worth US$3 billion. The market value of GoldCorp rose from US$100 million to over US$9 billion. This is

widely held up as one of the early successes of crowd sourcing which led to many similar and successful

projects in multiple industries (Marjanovic et al., 2012).

Crowd-sourcing regulation and e-Government. The rise of the internet has been accompanied by a

research and policy movement often referred to as “e-government”. E-government is generally defined as

the delivery of government services and functions using digital tools in an online environment. A recent

study (Reddick et al., 2013, p. 1) argues that “E-government is potentially one method of both promoting

collaboration with businesses through digital means, but it also is a way to monitor and regulate business;

with collaboration being important for public administration”. This is seen as a mechanism for improving

efficiency, collaboration and trust within the regulatory space. However, thinking in this space is in its

infancy. The information technology sector is yet to produce the models, software and process via which

crowd sourcing and or e-government could deliver cost effective regulation. The coming decades are likely

to see action in this space and considerable opportunities for information technology firms that develop

the right models.


• There is a demand within the wider community for transparency and information about mining


activities. This represents an opportunity for governments and mining companies. The regulatory

burden may be eased if technology allows the consumer of information to connect directly to

company.

• South Australia’s information technology industry may be well positioned to supply innovative

business models that effectively move in the direction of self-regulation of aspects of the oil and

gas and mining sectors. If proven successful such tools could have applicability in global markets.

• The costs of meeting regulations are widely cited as one of the main challenges for increasing

mining and energy sector investment in Australia. Innovative approaches stemming from the

information technology sector could deliver benefit to the whole economy.

26 | CSIRO

3.5 The Knowledge Economy

This megatrend explores why and how the South Australian economy may expand knowledge and

technology exports. The boom in resources sector investment has been accompanied by the development

of valuable knowledge and skills. It is possible, some would say probable, that resources sector investment

in Australia slows down in coming years. In comparison developing countries are in the process of

expanding production and investment in the resources sector.

There is an opportunity for South Australia to move increasingly into the mining engineering technology

services (METS) sector. With a strong university sector, a strong high-tech sector and a legacy of minerals

development the South Australian economy is well poised to capture this opportunity. However, many

other Australian and world regional economies are also well positioned. It will be a competitive

environment requiring swift and strategic positioning.

Emerging economies may demand Australian know-how to develop vast mineral reserves. A significant

proportion of mineral reserves are held by developing countries (Figure 17). Given the lower costs of

labour, capital, energy, land and water in developing countries the development of these mineral reserves

will be an attractive prospect for global resources sector companies. However, many developing countries

lack the infrastructure, skills, technology and know-how to develop mineral resources. This is due to lower

levels of historical investment compared to Australia. The coming decades may see this change. This will

place competitive pressure on Australia’s mineral and energy commodity exports. However, it will open up

a window of demand for resources sector skills and know how.

Figure 17. Supply of resource reserves, by country type, 2011

Source: United States Geological Survey (2012)

Mine production is ramping up in emerging economies (especially China). The last decade has seen strong

growth in minerals and energy commodity production in emerging economies (Figure 18, Figure 19, Figure

20, Figure 21, Figure 22, Figure 23). This trend is likely to continue apace over the coming decade. China is a

standout. Today China is the world’s largest producer of lead, iron ore and gold. Russia has substantially

increased oil production and is now the world’s second largest oil producer after Saudi Arabia. The United

47%

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States, Russia and Qatar have vastly increased natural gas production. Today the United States accounts for

20 percent of global natural gas production and Russia accounts for 18.5 percent (BP, 2012). Many South

American countries are making similar transitions in both minerals and energy production. These data point

towards a likelihood of large increases in production, and exports, from the United States and emerging

world economies.

Production in emerging economies will continue to grow as resources sector infrastructure is developed to

access abundant mineral and energy resources. This creates an opportunity for Australia’s well established

resources sector. Emerging economies may not yet have the technology, infrastructure and skills to exploit

their vast mineral reserves. As more suppliers enter commodity markets, making them more competitive

and placing downward pressure on price, Australia could increasingly export resources sector know-how in

addition to minerals and energy products.

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Figure 19. Lead production (top five producing

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Figure 20. Iron ore production (top five producing

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Figure 21. Gold production (top five producing

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28 | CSIRO

Mining investment – when will it peak? What will replace it? The phenomenon of commodity price

growth has been accompanied by a boom in mining investment in Australia. In the last two quarters for

which data are available from the Australian Bureau of Statistics (December 2011 and March 2012) mining

investment added up to more than all other forms of investment in the Australian economy. The crucial

question is when will the investment graph peak?

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Figure 24. Capital investment in the Australian

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Figure 25. Quarterly growth rate for mining investment

Source: Australian Bureau of Statistics, Actual Private

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Figure 23. Oil production (top five producing countries

in 2011 plus Australia, the 29th largest producer out

of 48 producing countries)

Source: BP Statistical Review of World Energy (BP,

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Figure 22. Gas production (top five producing

countries in 2011 plus Australia, the 20th largest

producer out of 49 producing countries)

Source: BP Statistical Review of World Energy (BP,

2012)


There is still much mining work in the pipeline for coming years. Activity in liquefied natural gas mining is

likely to expand. However, in its February 2013 Statement on Monetary Policy (SMP) the Reserve Bank of

Australia forecasts a slowdown in mining investment. Under this scenario mining investment peaks by the

beginning of the 2013 calendar year and declines over the year 2014. This is a downward forecast

compared to the Reserve Bank’s August 2012 SMP. Forecasts of mining investment are subject to high

levels of uncertainty due to the many factors at play. However, the downward turn in commodity markets

signals a plausible future where mining investment drops below the current very high levels. For the past

two quarters mining investment has grown but the rate of growth has fallen from 18.3 percent to 13.7

percent (Sep 2011 to Dec 2011) and from 13.7 percent to 10.2 percent (Dec 2011 to Mar 2012) (ABS,

2012b).

Investment may target the mining engineering technology and services sector. There is some degree of

fungibility between investment in mining and investment in METS. Whereas investment growth in the

mining sector is unclear the METS sector is set for strong future growth. There have been two major studies

into Australia’s METS sector which document historic and future expansion.

• The Mineral Council of Australia (Scott-Kemmis, 2013) finds the nation has 270 generalised or

specialised companies active in METS. Most of these companies supply the mining sector but many

supply multiple industries. In 2012 the Australian METS sector sold products and services worth

A$71 billion into the mining sector and employed over 265,000 people. Exports of METS exceeded

A$12 billion comprising over one-third of total income making it a highly internationalised sector.

Industry reports indicate that offshore activity in METS is growing rapidly and by 2008-09 27

percent of Australian METS firms had opened overseas offices in North America (19 percent), South

America (15 percent) and many in Asia, Africa, Oceania and Europe.

• The Australian Bureau of Agricultural and Resources Economics (ABARE) (Tedesco et al., 2010) find

that METS revenue in 2008-09 was A$8.7 billion with export sales of A$2.5 billion and domestic

sales of $6.2 billion. They also find in that year employment in the sector of 31,300 people with

research and development expenditure of $985 million. The ABARE paper also identifies strong

historical growth in METS exports with total export sales revenue equating to A$467 million in

1995-96 and rising to $A2.5 billion in 2008-09.

Clearly the Mineral Council of Australia identify a much larger METS sector. This may be due to growth in

METS during the two time periods (2010 to 2013) and different definitions and methods used in the two

studies. However, the general consensus would seem to be that METS is a growing sector with strong

prospects for future growth. Furthermore, METS is a highly internationalised sector and much revenue

growth may come in the form of exports to overseas markets.

From ingots to ideas in Pittsburgh. For many decades the Pittsburgh economy relied on steel production

for continued growth. However, market forces led to contraction of the industry during the 1970s and

1980s with most steel mills being closed down. However, the Pittsburgh economy was resilient. It managed

to adapt and develop a new industry supplying goods and services to the steel industries of other regions

(Figure 26). This transition has been widely studied. An academic from the University of Pittsburgh (Treado,

2009, p. 105) wrote that :

“Although Pittsburgh did lose most of its steel-making capacity during the end of the

20th century, it did not lose its steelmaking expertise. That expertise became the basis

of Pittsburgh’s 21st century role as a key participant in the global steel value chain.

With a critical mass of both product and service providers, the Pittsburgh region has

become a key source of steel technology”.

According to the author the ability of Pittsburgh to make this transition and create a steel technology

cluster came down to the city’s location, labour and legacy. Pittsburgh did not just make steel. They

thought about how to make steel and captured this knowledge. The region’s long tradition in metallurgy

and materials science allowed this transition to occur (Treado, 2009). Will Adelaide and South Australia

make similar transition given changes to global commodities markets? South Australia, like Pittsburgh, has

strong universities, research and technology capabilities. The ingredients for capitalising on high tech

30 | CSIRO

services for minerals and energy projects are in place. However, it is a competitive environment and other

regions will be trying to achieve the same outcome.

Figure 26. Share of steel making capacity and technology firms for US cities in 2003

Source: Cambridge Journal of Regions, Economy and Society; Treado (2009)

Implications for the ICT sector in South Australia

• The structure of an economy always transitions over time. Gradually, and sometimes rapidly, the

underlying sources of wealth creation switch from one thing to another. Economies that continue

to grow and prosper are able to grasp new opportunities and make the transitions smoothly.

• The mining and energy resources sector in Australia will, like any industry, go through periods of

growth and contraction largely driven by commodity price movements. The coming decade is

unlikely to experience the high prices of gold, iron ore and other important commodity exports of

the past decade. A period of transition is currently occurring.

• However, studies into the mining engineering services and technology sector reveal prospects for a

growth industry. South Australia is well positioned to capitalise on this. However, competition will

be strong.

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3.6 E=MC2

Albert Einstein reshaped the world of physics, and arguably the world, when he developed revolutionary

theories of energy mass equivalence. We borrow two concepts from Einstein in this megatrend.

Firstly, is the concept that energy can be swapped with matter. We suggest that over the next 10 to 20

years scarce mineral resources (e.g. gold, silver, lead) will be increasingly exchanged for more abundant

energy resources (e.g. coal, natural gas, uranium) via processes of recycling. Secondly, is the concept of

revolutionising current models. There is a possibility that business models will be radically reinvented in

response to resource scarcity.

The growth of the recycling industry and the emergence of new business models to handle mineral

resource scarcity will create opportunities in the information technology sector.

Mining above the ground. The mine of the future may be increasingly concerned with materials that lie

above, rather than below, the earth’s surface. This is due to the increasingly rich and accessible mineral

content of recyclable materials. For example an open pit mine will yield between 1 and 5 grams of gold for

every one tonne of ore body extracted. This compares to 350 grams of gold yielded by one tonne of

discarded mobile phones and 250 grams of gold yielded by one tonne of computer circuit boards (Owens,

2013). This is partly due to the gradual decline in gold ore grades. In the mid 1800s in Australia gold ores

yielded around 50 grams of gold per tonne of ore. This has fallen to less than 3 grams per tonne today

(UNEP, 2013). A recent study estimates a annual cost saving of between US$380 billion to US$630 billion

within the European Union manufacturing sector arising from the use of recycled products (UNEP, 2013).

Abundant energy products can be converted into scarce mineral products via recycling. A recent study

estimates the energy value of all the world’s fuel and mineral resources (Valero et al., 2010). The energy

value of a mineral resource (e.g. lead, iron ore, gold) is calculated as minimum work (energy) required to

produce one unit with a specific chemical composition. This allows the value of all natural mineral and

energy resources to be expressed in a single unit – tonnes of oil equivalent (toe). A tonne of oil equivalent is

the amount of energy released by burning one tonne of crude oil (approximately 42 gigajoules). From this

perspective a mineral resource (e.g. gold) requiring at minimum 1 toe to produce has equivalent value as

one tonne of crude oil. Both resources are interchangeable.

The study finds that given known reserves and current consumption rates:

• the total non-renewable energy resources (coal, uranium, natural gas and oil combined) will last

the world another 574 years; and

• the world’s total mineral resources will last for another 191 years.

The authors of this study conclude that “there is no energy scarcity, but mineral’s scarcity. Vast amounts of

energy are available on earth, much more than we could ever use” and that the world “cannot speak about

energy crisis, but rather materials and environmental crisis” and that “recycling and especially, the search of

a dematerialized society becomes essential” (p995). If we accept that materials and energy are

interchangeable via recycling these observations hold salient implications for humanity and redefine our

current understanding of resource scarcity. They also point us in the direction of growth in recycling. The

world’s abundant energy resources can be swapped for the world’s scarce mineral resources via recycling.

Dematerialising the economy. Although the level of material consumption continues to grow, there are

emerging signs of a relative decoupling of economic growth with material consumption (Figure 27) (OECD,

2011b). Relative decoupling is a decline in material consumption relative to economic output. This results a

preferential shift toward consuming experiences and services rather than physical goods and from more

efficient production systems. As technology improves economies need fewer materials to produce the

same outcome.

32 | CSIRO

Figure 27. Declining material consumption in advanced economies in line with economic growth

Source: Material consumption data from the Organisation for Economic Cooperation and Development (OECD, 2011b)

and GDP per capita data from The World Bank (World Bank, 2012b).

“In 1985 a kilo of aluminium made 46 drinks cans. Today the same amount makes 70 cans.”

- Andrew Bloodworth, British Geological Survey, 2013

The reasons to recycle. The main materials that are recycled in Australia include metals, organics, paper

and cardboard, plastics, glass and masonry materials (DSEWPaC, 2012). Based on 2008-09 recycling rates,

there is scope to increase the recycling rates across all of these categories (Figure 28) (DSEWPaC, 2012). As

materials become increasingly scarce relative to demand, and as mineral ore grades decline, humans will

increasingly turn to recycling technologies. The drivers of recycling growth include:

• Gradual decline in mineral ore grades (UNEP, 2013) (Mudd, 2010). The data reveal that for many

mineral commodities in Australia and worldwide ore grades are declining as the richer deposits

have been increasingly extracted;

• Improvement of recycling technology (Binnemans et al., 2013). Coming decades will see the

continued advancement of chemical and physical process for recycling and computer tools to aid

the recycling process;

• Increased generation of waste material. In 2009-10 waste received at landfill sites in Australia

amounted to 21.6 million tonnes (ABS, 2011). This compares to 17.7 million tonnes in 2002-03

(ABS, 2004);

• Abundance of some energy resources. The world has an abundance of certain energy sources

including coal, natural gas and uranium. These products can supply the energy needed to convert

anthropocentric waste streams into useful materials;

• Rising cost of waste disposal to landfill. In 2009-10 Australia’s private and public sectors together

spent A$10.2 billion disposing of waste (ABS, 2011). This compares to only A$2.5 billion in 2002-03

(ABS, 2004); and

• Continued and forecast growth in demand for metals, plastics, glass, fabrics and other materials

(UNEP, 2013).

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Figure 28. Australian disposal and recycling rates by material, 2008-09

Source: Hyder Consulting (2012)

The economic value of recyclable material. Estimates show that the Australian recycling and waste sector

is valued at between A$7 to A$11.5 billion (Environment Protection and Heritage Council, 2010). In 2006-

07, Australia generated 43,777,000 tonnes of waste, recycling 52 percent and sending 48 percent to landfill

(Environment Protection and Heritage Council, 2010). This was a 35 percent increase from 2002-03.

Forecasting out to 2020-21 under a medium growth scenario of 4.5 percent per annum, it is predicted that

Australia will produce 81, 072, 593 tonnes of waste (Environment Protection and Heritage Council, 2010).

Figure 29. Total waste disposal and recycling in Australia over time

Source: Hyder Consulting (2012)

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34 | CSIRO

More recycling needs more software. Growth in the recycling industry will be accompanied by an

information technology services industry. A detailed study into the recycling sector by the United Nations

Environment Program identifies the following classes of “computer-based tools” needed for efficient

material recovery, re-use and recycling (UNEP, 2013):

• Liberation modelling systems. These tools calculate and predict the dynamically changing recycling

and recovery rates for complex waste streams. Liberation models have long been used in

traditional mineral ore processing. However, anthropogenic waste streams are more complex than

natural ores and require new software systems.

• Life cycle assessment software. When linked to simulation tools life cycle assessment software can

help manufacturers understand the environmental and health impacts of a product through its

entire existence (including recycling stages).

• Life cycle management software. This zooms out from products to the whole business and/or

industry to identify economically, socially and environmentally efficient production processes.

• Design for sustainability. Software can help designers build products within which compatible

groupings of metals can be easily dismantled and directed into the metallurgical processing

infrastructure or used as inputs into other value chains.

Sell the service not the product. In their recent book “The Sixth Wave” James Moody and Bianca Nograd

argue consumers and producers of the future will experience a major shift. The energy company won’t sell

electricity but warmth. The airline won’t sell seats on planes but rather connections with family and friends.

This is a perceptual shift but may have implications for business models. For example, the energy sector has

seen the emergence of service contracts. These may involve the electricity company signing an agreement

to keep someone’s house at a certain temperature (e.g. 21 degrees Celsius) all year around for a fixed fee.

This means the company can use the optimal mix of solar passive design, intelligent power utilisation

systems and electricity provision. The concept may extend beyond the energy sector into mining and

manufacturing. Is there a possibility that companies in the future will rent materials such as aluminium to

product designers with a refund given upon return for recycling? Resource scarcity is likely to see

innovation in the space of business models for materials management.


• From some perspectives energy is the underlying currency supporting human lifestyles. Energy is

needed for light, food, warmth and transport. The world has vast and diverse energy sources which

allow these outcomes to be delivered. Our ability to be creative with energy may be central to our

ability to grow strong and sustainable economies.

• As waste generation increases and mineral resources experience increased demand recycling will

have growing importance. Waste streams are becoming more mineral rich than the ore bodies.

Recycling is a technology that allows energy to be swapped for minerals. The recycling sector is

likely to grow and diversify in coming decades.

• Information technology can improve the efficiency and effectiveness of recycling. It can help model

complex waste streams and manage products at every stage of their lifecycle. Growth in recycling

will create opportunities for the information technology industry.


4 Minerals and Energy in 2025

This section outlines future narratives for both minerals and energy resources in 2025. For this project, we

have developed “normative” scenarios for key aspects of the resources sector. A normative scenario is a

single narrative of a component of the future and provides a vision which can be worked towards through

strategic planning and decision making.

A key component of this project is to examine the potential for ICT capabilities within these scenarios.

Therefore, we present overviews in this section that weave together narratives on the future of the two

sectors with descriptions of the ICT technologies that can enable them.

4.1 The integrated minerals value chain of 2025

In 2025, South Australia is a world leader in advanced resource modelling technologies that support

exploration and development of detailed geological models. This allows deeper and more difficult

resources to be profitably mined, which opens up a new wave of minerals exploration in South Australia

and throughout Australia.

South Australia rivals Western Australia as a leading global exploration investment destination. This reflects

growing confidence based on exploration successes in ‘greenfields’ terrane in the Cooper Basin as well as

the overwhelming success of the expansion of Olympic Dam. Rapid, lightweight, portable drilling sensors

and techniques developed by the Deep Exploration Technologies CRC are now in their third generation and

allow for cheaper and more accurate geological data to be collected. New unmanned aerial vehicles and

airborne sensors2 allow for ultra-high-resolution geo-physical data capture.

Critically, this success reflects the strong partnerships between researchers, the State survey and

Geoscience Australia to share a technical platform providing world leading pre-competitive data and

derivative knowledge to industry, for integrating a wide range of geo-scientific, environmental, and social

pre-competitive data and making it available through a cloud-based service on the Internet. This technical

platform and integration of data has been enabled by interoperability. 3D geological interpretations3 of

large volumes of the Gawler province now exist and are linked to broad 3D hyperspectral coverage that

helps guide exploration. As a result, the mineral potential in half a dozen little-explored terranes within the

State has been unlocked and the advanced resource characterisation expertise resident in South Australia is

well recognised. South Australia’s ICT industry develops online modelling4, visualisation, resource

2 Data collection: sensors: Traditionally, sensors have been fixed and capable of providing data only when interrogated. However, sensors are

increasingly permanently connected to the internet, some wirelessly, and are able to provide real-time feedback on parameters. Wireless sensor

networks consist of nodes comprising the appropriate sensors along with computational devices that transmit and receive data wirelessly. The

nodes work independently to record environmental conditions. Each cooperates with its neighbours to wirelessly transmit their readings via an ad-

hoc network. Wireless sensor networks provide information on an unprecedented temporal and spatial scale and allows for the study and

monitoring of fundamental processes in the environment.

3 3D visualisation: Mining visualisation technology has become a comprehensive technology combined of geological mining technology and

computer network technology (Huang et al., 2011). 3D visualisation of ore bodies allows for higher accuracy of measurement and sampling than

that allowed by conventional mapping methods. The design information includes descriptions of observed rock mass structure, physical properties

of the rock mass and inferences about the structure and likely behaviour of the rock mass. 3D visualisation of a mine is used in improving mine

design, improving productivity and reducing site accidents (Huang et al., 2011).

4 Data modelling: predictive analytics: Predictive analytics is the use of historical data to model possible outcomes in future situations (Williams,

2011). Predictive analytics allows for the inclusion of both quantitative and qualitative data. It also allows for the outcome from historical events to

be explored under different conditions (Waller et al., 2013).

36 | CSIRO

simulation and pattern analysis services which can deliver services anywhere in the world.

In 2025, South Australia plays a leading role in developing interoperability and “plug-and-play”

capabilities across major METS vendors and SMEs in the minerals sector, which leads to new

opportunities in innovation. South Australia hosts numerous global remote operations hubs and is a

world leader in remote operations due to the development of tools, skills and services required to build

and maintain tele-operation centres.

Several new mining districts in South Australia have opened up with central services being provided to

those mine sites from remote tele-operation centres5 in Adelaide. Both suppliers and miners have

benefited from interoperability standards6 in mine automation and control7, enabled by data

communications/standards8. Miners are no longer locked into a single-vendor solution and instead can

build solutions by picking and choosing from best-in-class components. They also benefit from incremental

technology improvements to individual components without needing to switch vendors and swap out their

entire solution. Increased competition has driven down costs per unit of production and increased

incentive for innovation. Caterpillar and Komatsu have opened up their proprietary equipment and

standards, enabling innovation in SMEs who are now able to offer niche specialist services, enabling the

larger vendors to focus on the core business. SMEs in South Australia have developed custom solutions that

work seamlessly with solutions from major suppliers. These SMEs are also better positioned to build

software solutions for junior miners who also benefit from cost reductions in equipment and services.

Port of Adelaide has increased its capacity to accommodate the additional export volume. Additionally,

productivity has increased five-fold through greater interoperability between service platforms and smart,

dynamic operational systems that are constantly optimising themselves based on feedback data from all

parts of the operation.

In 2025, South Australia plays a leading role in integrating existing capabilities to advance the goal of a

fully integrated intelligent processing plant that provides feedback and allows for adaptive operations.

Operations are now “geologically intelligent9” with online analytical techniques enabling high value rock to

5 Remote operations: Remote operation of a mine is made possible by via automation. Automation increases the number of processes that can be

completed offsite. If processes are automated, they can be controlled over the internet and thus the operations centre can be located in a more

centralised location rather than in the same location as the mine. It also allows more than one mine to be operated from the same centre to allow

for global optimisation and operation .The basic perceptual link between an operator and the remote environment is usually provided via a video

stream from one or more cameras at the remote site.

6 Data integration: interoperability: Interoperability is defined by the Institute of Electrical and Electronics Engineers (1990) as ‘the ability of two or

more systems or components to exchange information and to use the information that has been exchanged’. Interoperability ensures different

systems can communicate with each other. Without this integration, systems cannot communicate with each other and will therefore only be able

to operate in isolation to each other. Interoperability is required in the mining industry to support the development of full automation of mining

equipment, allowing communication between the various different systems. 7 Automation, control and sensing: Automation generally refers to the full or partial replacement of a function previously carried out by human

operators either physically or mentally (Parasuraman et al., 2000; Thorogood et al., 2010). There are three categories of automation in the mining

sector(Lynas et al., 2011):

1. Lower level automation – the operator is in full control of the system and the technology provides warning or assistance;

2. Mid level automation – the operator is in control of the equipment at most times, however certain functions are automatically

controlled and overseen by the system. This may involve removing operator control at certain times and not others or having the

operator control the equipment from a nearby location; and

3. Full automation – the operator is located remotely from the equipment and uses controls and displays to operate the equipment.

The majority of automation in the Australian mining industry focuses on providing semi-autonomous operation at the component or subsystem

level and is used on a small scale relative to the number of mines, processing plants and export facilities in the country (Lynas et al., 2011). Control

and sensing capabilities enhance the effectiveness of an automated process and can increase the scope of possible applications within the mine

site. 8 Data communications/standards: Data communication and standardisation enables devices to be built in such a way that they are able to be

connected and communicate to other devices. As such, it is the precursor to interoperability and automation. Without standardisation each device

continues to work in isolation of each other which can limit the productive capabilities of an operation which may otherwise be achievable.

9 Intelligent processing/control: Geologically intelligent processing occurs where an autonomous mining system is capable of mining ore selected

for grade and is able to sort ore as it is mined. The machine is capable of responding automatically to the mineralogy and lithology of geological

formations. Intelligent processing/control also applies to the process side of operations. The ability to predict processing performance from ore

mineralogy and petrology ultimately allows industry to speed up assessment of the likely viability of new ore deposits. Increased understanding of

the ore also means the most effective crushing and grinding technologies can be selected for the particular mineral to improve the quality of the

end product and enhance the overall processing performance of an ore.


be identified and selectively extracted from the rock mass. In-situ processing is common place in new

operations, as is the use of mass conveyance systems based on autonomous transportation. This autonomy

means that the number of mining trucks has increased but the size has dropped, enabling a far more

energy efficient fleet.

Through the provision of online analytical services, such as the common mine model10, that enable multiple

chemical and physical measurements to be made using various passive and stimulated spectroscopic

techniques, real-time analysis of ore content has been made possible as it moves through the processing

plant. This data on ore grade is passed through feedback loops between the processing plant, the resource

model and the mine plan. Operational support systems evaluate processing data in near-real-time and use

it to modify operations by shifting excavation away from areas of low grade ores and deleterious materials

to areas where the ore grades are appropriate and optimal for the plant and price.

The intelligent processing plant can sort and selectively process ores by grade based on external conditions

such as commodity spot prices, current transportation and shipping costs. New paradigms in excavation

have become more prevalent with in-situ mining bringing us closer to the concept of the “invisible mine”

and allowing access to deeper resources without the impacts associated with open cut mines. Dry

processing techniques allow for new projects to begin that were previously unfeasible due to lack of access

to affordable process water.

South Australia's role in this new era of intelligent processing is in the service and technology to integrate

process data seamlessly with the mine model to allow near real-time control of both excavation and

processing at an increasingly granular level.

In 2025, South Australia is a world leader in developing technologies that allow human-controlled and

autonomous machines to work safely together in a confined mine environment.

Operations now have far greater reliance on sensors and sensor networks, computational analysis and

machine-based learning but still retain the involvement of humans for advanced and complex decision-

making. This has required new skills and interfaces between humans and machines11 that allow for

automation to undertake repeatable tasks and data analysis. South Australia has earned a reputation, with

strong support from its universities, as a resources-specific global virtual training and education hub,

partnering with leading providers of online education platforms and training tools to provide education,

training and skills for a new generation of exploration geologists, mine operators and policy advisers who

have little or no direct experience in the vicinity of mining equipment.

Human behavioural monitoring12 is used to track potentially hazardous human physiological conditions;

real-time environment monitoring to track both autonomous and human-controlled machines and identify

potentially dangerous interactions; human, machine and environment data tracking and analysis to look for

10 The common mine model: The Common Mine Model (CMM) is a 3D data model of a deposit that integrates the flow of data over the mine site

and mining process to provide feedback on the face or operations. It should be able to support both historical and real-time data and observations

are updated over time. Whatever happens in the mine should be reflected in the CMM, and every action in the CMM (initiated by human operator

or artificial intelligence) should be implemented in the real world. The CMM spans the entire mining value chain from exploration to rehabilitation.

The CMM can be used to build a model of in-situ resources and associated mining parameters that are improved upon as mining proceeds. By

analysing and modelling the relationships between these inputs, one can estimate in-situ responses such as rock hardness, blastability,

fragmentation and liberation, which can then be extrapolated throughout the various mining domains within the mine model.

11 Human/machine interaction: The control of a machine can range from manual to fully autonomous. Between these two modes of operation lies

shared autonomy, where man and machine share control of the machine. This can range from “assistive control” whereby the operator has control

over the machine and the computer system is able to provide assistance (e.g. to prevent collisions); to “supervisory control” where the computer

systems have control and the operator provides only high level supervisory advice. A fundamental requirement for systems which are controlled

remotely by a human operator is that the operator has sufficient knowledge of the state of the machine and its surrounding environment. This

interface can range from a single video stream to a combination of live video and 3D computer visualisations.

12 Human behavioural analysis: Behavioural analysis is conducted via monitoring sensor suites which track potentially hazardous human

physiological conditions. Feedback from these sensors can then be used to alert the operator to implement the best course of action given the

circumstance. This aspect of monitoring focuses on the human component only.

38 | CSIRO

optimisation points and improve safety procedures. Gamification13 has removed the tedium from highly

repetitive human-centric processes and augmented reality allows humans to control semi-autonomous

systems remotely. Learning systems allow autonomous systems to learn from human operators and neural

networks allow autonomous systems to learn optimal behaviours by analysing past activity. To effectively

deliver services to the onsite workforce, health services are delivered via telehealth14 where possible.

In 2025, South Australia leads the world by working with industry to develop standards for the

transparency of environmental data, which decreases the regulatory burden on the government and

improves trust between industry and communities.

South Australian operations typically rank as benchmarks against the Global Reporting Index, despite the

continued high cost of labour. Efficiency gains through automation have offset heightened attention on

environmental performance, and mining companies are using advanced sensors and data analytics15 tools

to gather an increasingly large amount of environmental data at the mine site. Many of the environmental

conditions being monitored have the potential to impact local communities and the South Australian

government has pioneered the delivery of open, transparent and interrogatable mine site performance

data through their “minewatch” app. This represents global leadership in “crowd-sourcing regulation” and

drives a continual process of stakeholder engagement by the mine operators. These operations can then be

certified against a new international standard for social license. As a result, most operations in South

Australia operate with high levels of social acceptance.

4.2 The integrated energy value chain of 2025

In 2025, South Australia is a world leader in understanding the oil and gas resource underneath the State.

Advanced reservoir simulation16 capabilities have been developed to support exploratory and production

drilling both onshore and offshore, with the associated development of detailed geological and

petrophysical models. Advanced techniques for exploration and reservoir characterisation, along with new

software and simulators, will reduce the uncertainties for locating sweet spot with potential to contain

significant oil and gas reserves. This will also assist in managing reservoir performance during the

production phase in order to optimise the production of desired fluids (oil and gas) while reducing the

undesired ones such as water. This is opening up a new wave of gas exploration in South Australia and

throughout Australia.

Critically, this success reflects the strong partnerships between researchers, the State survey and technical

service companies to share a technical platform providing world leading pre-competitive data and

derivative knowledge to industry. This platform is crucial for integrating data from a wide range of

geological related scientific, environmental, and social pre-competitive data and makes it available through

13 Gamification: Gamification incorporates video game elements, such as points, levels and leader boards, in non-gaming systems to improve user

experience and engagement (Deterding et al., 2011). It can be used to remove the tedium from highly repetitive human-centric processes.

Currently, applications exist in finance, health and productivity (Deterding et al., 2011).

14 Telehealth: Telehealth is the provision of heath related services at a distance using technology assisted communications (Dods et al., 2012). There

are a range of services that can be provided via telehealth, depending on the connection speed and quality. Services can range from

teleconsultation, requiring only low resolution videoconferencing, to telesurgery which requires remote operation of medical equipment and a very

fast interaction and response timescale (Dods et al., 2012).

15 Data analytics: Data analytics is becoming increasingly important as the amount of data available to companies grows. Without the means to

sort and analyse these flows, data is unable to be constructively utilised to contribute to decision making and performance improvements. Given

the volume of data, methods of processing are often different to typical methods used on a smaller scale (Fisher et al., 2012). Computing platforms

including cloud-based databases, distributed file systems and novel data structures are often used for the data storage and analysis (Fisher et al.,

2012).

16 Reservoir simulation: Reservoir simulation involves numerical modelling of the relationship between reservoir properties, operating procedures

and gas production. This modelling allows for analysis of the sensitivity of well performance under uncertainties in the measured data. Based on

these sensitivities, suitable reservoir management strategies can be put in place.


a cloud-based service on the Internet. This integration of data has been enabled by interoperability17

between the various sources. 3D geological interpretations of large volumes of potential oil and gas

provinces now exist and are linked to broad 3D hyperspectral coverage that helps guide exploration. As a

result, the oil and gas potential in little-explored areas within the State has been unlocked and the

advanced resource characterisation expertise resident in South Australia is well recognised. South

Australia’s ICT industry develops online modelling, visualisation, resource simulation and pattern analysis

services which can deliver services anywhere in the world.

In 2025, South Australia plays a leading role in establishing coherent intelligent oil and gas fields which

will include monitoring and control centres, processes simulation centres and optimisation and

management of production assets for remote oil and gas fields. In part this is enabled through high

quality simulation software, interoperability and “plug-and-play” capabilities across SMEs in the oil and

gas sector, which leads to new opportunities in innovation.

The vision of intelligent fields, also known as i-fields, e-fields or smart fields, are oil/gas fields containing

wells equipped with down-hole and subsea sensors, real-time monitoring and control devices that are

remotely operated18 through integrated information management, decision support systems supported by

simulators and analysis tools. General benefits expected from such implementation include improved

productivity, higher recovery factors, lower operational costs, better safety and reduced environmental

impact. This has required South Australia to overcome scientific and technological challenges in areas such

as surveillance and analysis, optimisation and control, new products, data communication/standards19 and

materials and processes.

In 2025, offshore oil and gas fields have increased productivity fivefold through innovation to assure

optimal management of the reservoir, maximum possible handling and transport of valuable fluids

through the production system and long pipelines that are now standard for the delivery of product to

the new gas plant in Port of Adelaide.

ICT has been instrumental in this increase by providing simulation software, seismic monitoring20,

sensors21/sensor networks and control systems22 that optimise flow parameters in real time by measuring

17 Data integration: interoperability: Interoperability is defined by the Institute of Electrical and Electronics Engineer (1990) as ‘the ability s of two

or more systems or components to exchange information and to use the information that has been exchanged’. Interoperability ensures different

systems can communicate with each other. Without this integration, systems cannot communicate with each other and will therefore only be able

to operate in isolation to each other. Interoperability is required in the oil and gas industry to support the development of full automation of mining

equipment, allowing communication between the various different systems. 18 Remote operations: Remote operation of a mine is made possible by automation. Automation increases the number of processes that can be

completed offsite. If processes are automated, they can be controlled over the internet and thus the operations centre can be located in a more

centralised location rather than in the same location as the mine. It also allows more than one mine to be operated from the same centre to allow

for global optimisation and operation .The basic perceptual link between an operator and the remote environment is usually provided via a video

stream from one or more cameras at the remote site. 19 Data communications/standards: Data communication and standardisation enables devices to be built in such a way that they are able to be

connected and communicate to other devices. As such, it is the precursor to interoperability and automation. Without standardisation each device

continues to work in isolation of each other which can limit the productive capabilities of an operation which may otherwise be achievable. 20 4D seismic monitoring: 4D seismic monitoring allows for the monitoring of the behaviour of a reservoir during production (CGGVeritas, n.d.). It

consists of 3D repetitive seismic images to monitor the movement of oil reservoir fluids over time (USSI, 2013). Fluid movements and pressure

changes in the subsurface of the reservoir can be observed, particularly during production, which helps to optimise recovery of reserves

(CGGVeritas, n.d.). 21 Data collection: sensors: Traditionally, sensors have been fixed and capable of providing data only when interrogated. However, sensors are

increasingly permanently connected to the internet, some wirelessly, and are able to provide real-time feedback on parameters. Wireless sensor

networks consist of nodes comprising the appropriate sensors along with computational devices that transmit and receive data wirelessly. The

nodes work independently to record environmental conditions. Each cooperates with its neighbours to wirelessly transmit their readings via an ad-

hoc network. Wireless sensor networks provide information on an unprecedented temporal and spatial scale and allows for the study and

monitoring of fundamental processes in the environment. 22 Automation, control and sensing: Automation generally refers to the full or partial replacement of a function previously carried out by human

operators either physically or mentally (Parasuraman et al., 2000; Thorogood et al., 2010). There are three categories of automation in the oil and

gas sector (Lynas et al., 2011):

1. Lower level automation – the operator is in full control of the system and the technology provides warning or assistance;

2. Mid level automation – the operator is in control of the equipment at most times, however certain functions are automatically

controlled and overseen by the system. This may involve removing operator control at certain times and not others or having the

operator control the equipment from a nearby location; and

3. Full automation – the operator is located remotely from the equipment and uses controls and displays to operate the equipment.

40 | CSIRO

and then adjusting for fluid properties and oil/gas/water mixes.

In 2025, South Australian gas potential through both shale oil gas and coal seam gas has been opened up

through a coordinated effort now controlled from world leading remote operations centres in Adelaide.

South Australia is a world leader in developing smart information platforms which allow autonomous

technology at multiple fields to be operated effectively through remote control. The benchmark standards

of risk analysis developed in the oil industry for reservoir characterisation are being applied to event

recognition and operational management through pattern analysis, machine learning and event

recognition, all embedded within the smart information platform.

In 2025, South Australia leads the world by working with industry to develop standards for the

transparency of environmental data, which decreases the regulatory burden on the government and

improves trust between industry and communities

.

Control and sensing capabilities enhance the effectiveness of an automated process and can increase the scope of possible applications within the

oil field or gas well.


5 ICT Scenarios for Mineral Resources

This section identifies six discrete scenarios for South Australia (Figure 30). These are illustrated below,

mapped against both the value chain for mineral resources and the business drivers that they best address.

These scenarios are not mutually exclusive and many have significant overlap and synergies. Each scenario

is discussed in more detail below.

42 | CSIRO

Figure 30. Specific scenarios for South Australia mapped against the value chain


5.1 Advanced resource modelling

The challenge and opportunity

The acquisition and availability of geoscientific data is no longer the limiting factor in geological

interpretation and resource characterisation (Duffy et al., 2006). Intense innovation in our ability to

measure properties and sense our environment faster, cheaper, remotely and continuously has led to an

explosion of data availability (Reitsma et al., 2009). It is now within our ability to collate and interpret this

data in many varying dimensions to understand the resource that constrains the exploration and

characterisation process.

There are two distinct opportunities here for South Australia:

• Currently, South Australia is ranked 20th as an investment destination for the global minerals

resources sector amongst 96 jurisdictions around the world (Fraser Institute, 2013). The provision

of multiple “precompetitive” datasets regarding its prospective resources would assist in

demonstrating its attractiveness as an investment destination for the global mining sector.

• Australia’s share of the total global exploration budget for all minerals including iron ore was 15.6

percent in 2012 (MCA, 2013). With exploration representing a substantial cost of operations, there

is significant demand for any service provider who can decrease those costs by improving the speed

and accuracy of decisions about capital and operational investment (MCA, 2013). Effective

integration and analysis of multiple of disparate datasets exponentially increases the input

information to choices about targeting, drilling and the location of new excavations.

The opportunities for ICT to assist in this data collation, integration and interpretation are enormous and

many are already well established in the sector particularly in the area of data acquisition, data storage and

geological simulation. For example, new lightweight, rapid and portable drilling sensors and techniques

developed by the Deep Exploration Technologies Cooperative Research Centre will allow for cheaper and

more accurate geological data to be collected (DETCRC, 2012) and unmanned aerial vehicles and airborne

sensors allow for ultra-high-resolution geo-physical data capture (Hewson et al., 2010)

However, the full potential to transform efficiency and accuracy in resource characterisation through

integration and data interoperability is yet to be realised. Currently, human interpretation and integration

of data is the norm. Some data interoperability is enabled through software languages such as the

GeoSciML code (CSIRO, 2013b) which enables comparability between differing datasets, measured on

differing scales. Trial and error is used to discover relationships between observations and useful

knowledge. This is coupled with the interpreter’s experience and knowledge with success being highly

dependent on the precedence of the observed system behaviour and the skill of the interpreter. In many

circumstances more data is available than is used in interpretation as a result of limitations in technology

and interpreter capacity. Single models are generally produced and the update cycle when new data arrives

is slow.

Emergent ICT technologies can enable far greater levels of computational augmentation of human

interpretation. The use of algorithms that automate handling of large datasets, the application of high

performance data systems coupled with large data stores, access to data governed by open standards to

ease the integration burden (for example via Spatial Information Services Stack (SISS)) and the inclusion of

qualitative data all increase the knowledge base. Data mining, machine learning and signal processing

techniques can be used in a generic fashion to discover data-driven relationships across multiple data

types. In this way, final human interpretation is then used to create the full model with the assistance of

the pattern analysis and the analytics capabilities emerging as a result of the advent of “big data” and

statistical inference.

However, these advanced ICT enablers will change the skill set required of the geologist. Although data

integration and interoperability through ICT augments the geologist’s ability to understand the ore body, it

simultaneously reduces the data entry, data cleaning and data analysis components of the role which often

44 | CSIRO

form the training ground for early career geologists (Hutchinson, 2001).

What if...?

South Australia pioneered the next level of maturity in data integration by demonstrating the efficiency and

accuracy that can be achieved by greater levels of symbiosis between computational analytics and human

experience. Computational simulation can use probabilistic inversion techniques and rapid model

generation to realise multiple possible models that are constrained by the observations and human

hypothesis. Uncertainty quantification can be used to understand where additional data would improve the

models hence defining priorities for data acquisition. Additionally, algorithms can be used to derive proxies

for important rock properties (that are otherwise expensive or difficult to obtain) from qualitative

interpretation. In its most advanced state, model predictions can then be tested against human hypothesis,

physics and observations (e.g. will it produce the folds and fracture patterns suggested in the observations).

What would this look like?

Achieving this requires:

• Data integration with numerous targeted GIS, analysis and visualisation packages

• Databases that are content queryable and the filtered delivery of 3D/4D data

• Common information management and curation practices from a range of data custodians and

data acquisition service providers

• A new relationship between the geologist and numerical simulation

• New ways of measuring value from data and agreed relationships between proxy data and

important measurements

• Processing capacity that exceeds desktop computational systems, drawing in cloud and HPC

facilities.

• Provenance systems to provide traceability for data and the decisions based upon that data/models

at that particular time

3D mapping services delivered via cloud technology. Cloud capabilities are beginning to be used to deliver

industry services. 3D mapping services are one example. 3D laser mapping produces a reliable 3D map of

an unknown environment. While this technology has a variety of potential uses in the mining sector, it has

not been widely used as current models require expensive laser models, must be operated by skilled

engineers and may not operate accurately with a poor GPS signal (CSIRO, 2013a). However, CSIRO has

developed a 3D laser mapping tool, Zebedee, that overcomes these challenges and is simple to use, can

operate with no GPS signal and requires only basic training to operate (CSIRO, 2013a). In order to make this

technology accessible to industry, CSIRO has licensed the technology to UK company GeoSLAM who will

offer low-cost cloud based 3D mapping service (CSIRO, 2013a). Maptek (2013), a South Australia based

company, has developed a 3D mapping technology called Vulcan that provides 3D spatial information,

modelling, visualisation and analysis across the entire mining value chain, from exploration, through mine

design and scheduling, to mine rehabilitation.

Why South Australia?

South Australia has already established itself as a pioneer in the acquisition and dissemination of

precompetitive data to encourage exploration through its Plan for Accelerating Exploration (PACE) initiative

and its South Australian Resources Information Geoserver (SARIG) data delivery portal. There is an

extensive range of data available, and derived products, all intended for use by industry in identifying areas

for exploration. In addition to this the SA Geological survey, in collaboration with other states and

nationally with Geoscience Australia, have established a national geoscience data infrastructure called

AuScope (http://www.auscope.org.au/site/). The AuScope infrastructure provides interoperable web

service access to data from all of these providers using open standards.

Additionally, South Australia has seeded investment in targeting technology and innovation through its

support for the Adelaide-centred Deep Exploration Technologies Cooperative Research Centre. The strong


sponsorship of this CRC by industry exemplifies the challenges and opportunities in technology solutions for

exploration. The CRC’s technologies will complement those already in use in the field to enable “more

successful, more cost-effective, more environmentally-friendly and safer ways to drill, analyse and target

both new deep mineral deposits (‘greenfields’) and deep extensions to known deposits (‘brownfields’)”

(DETCRC, 2013).

With these strong innovation platforms in precompetitive data provision and exploration targeting

technology, coupled with the high levels of prospectivity for minerals in the Gawler Craton and Cooper

Basin (DMITRE, 2013a), South Australia has the opportunity to pioneer this next step in data

interoperability and advanced resource characterisation.

46 | CSIRO

5.2 Interoperability for Innovation


Interoperability is defined by the Institute of Electrical and Electronics Engineers (1990) as “the ability of

two or more systems or components to exchange information and to use the information that has been

exchanged”. Interoperability ensures different systems can communicate with each other. Without this

integration, systems cannot communicate with each other and will therefore only be able to operate in

isolation to each other. There is widespread recognition both domestically and internationally that

interoperability enables improvements in efficiency and productivity (Mining & Technology Australia,

2013b).

Interoperability is viewed by some as one of the most significant factors affecting the efficiency and

productivity of, and the sustainability outcomes from, industrial assets in the mining sector (Mining &

Technology Australia, 2013b). For different automated technologies to work together, the various different

systems need to be able to communicate. Multiple supporting technologies need to be integrated in order

to support the development of full automation of mining equipment, such as draglines and shovels (CSIRO,

2007).

Interoperability requires collaborative agreement on technical standards and protocols that support cross-

enterprise and cross-sectoral activities (DCITA, 2004). Where mining operations are locked into proprietary

systems, opportunities for supply efficiency and security through diversification and specialisation are

limited. The opportunity is therefore to open up interoperability and communication between the

automated systems operating on a mine site. In this way, market opportunities can be opened up to local

specialist SME suppliers offering niche ICT-based services to support automated equipment on site.

What if...?

South Australia established a Centre of Excellence around interoperability and standards and worked with

industry to create an open platform for application development? Caterpillar and Komatsu opened up their

equipment to a common set of standards, enabling SMEs in South Australia to innovate and develop

custom solutions that work seamlessly with solutions from major suppliers. SMEs could focus on

developing competitive advantage in specific components without needing to provide full solutions. Miners

would no longer be locked into a single-vendor solution and could build a pick-and-choose solution from

best-in-class components. Additionally, miners could also benefit from incremental technology

improvements to individual components without needing to switch vendors and swap out their entire

solution.


The concept of interoperability opens up a huge range of internet-enabled services delivered by specialist

companies. Some examples are provided below:

Common standards for communications between heavy equipment. An emerging industry-standard data

communication protocol, EtherNet/IP, has been incorporated into the Landmark longwall automation

project in the coal industry (CSIRO, 2007). By developing specifications for equipment compliance,

equipment and controls from multiple vendors can communicate with each other over a network running

an Ethernet-based protocol (CSIRO, 2007). Prior to this, controllers from one vendor could not be used in

conjunction with controllers or systems from other vendors. This innovation was realised by the

introduction of both network protocols (e.g. a wireless standard that is optimised for mine site usage) and

communications protocols (e.g. the “language” autonomous machines use to communicate with each

other).

Real-time monitoring for efficient operations management. Running costs for off-the-road tyres have

increased significantly, with the cost of tyre service and replacement sometimes equating to more than the

original cost of the vehicle (Walkinshaw, 2013). Various internet-enabled technologies have been

developed to better monitor tyre usage in real-time. OTRACOM is an internet-based tyre management and

reporting system that collects data on tyre usage to give recommendations to extend the tyre lifespan


(Walkinshaw, 2013). Michelin have developed a system to monitor haul truck tyres and alert a team if

temperature or pressure problems are detected in their tyres. Because these alerts are in real-time, the

best course of action can be decided on and acted upon immediately which also increases productivity and

safety (Walkinshaw, 2013).

Online 24/7 with in-built failsafe. For full interoperability and fully autonomous mining to work, critical

systems must be able to communicate continuously and ubiquitously. This raises a whole suite of new

requirements for ICT services (Segal, 2002). Secure services that enable online upgrading of multiple

systems, bug detection services to monitor the performance of the information system and identify and

remedy problems without taking systems offline and the provision of backup systems that can continue to

effectively coordinate between multiple autonomous agents are all services that the defence industry has

already addressed. Adoption of these ICT services in the mining industry will ensure that full

interoperability is viewed by industry as trusted, secure and reliable. For interoperability to be effective,

these barriers need to be identified and overcome.


South Australia has a history of defence technology and innovation, promulgated by the presence of the

Defence Science and Technology Organisation (DSTO). DSTO (2004) is charged with applying science and

technology to applications in defence. Given DSTO’s close relationships with the industry, science and

technology community, South Australia already has technology and innovation capabilities in companies

such as BAE Systems and CEA Technologies amongst others.

Developments in technology and innovation in the defence sector are likely to be somewhat transferable to

the mining sector. As well as advanced manufacturing, the defence industry involves complex systems

engineering and integration, innovative simulation and modelling technologies and leading edge electronics

and communications capabilities (Nash, 2012). The similarities in the technological requirements and needs

of the two sectors lend itself to a cross-over between the two sectors, for example unattended vehicles and

systems engineering (Nash, 2012). Defence and mining require a similar skill set in their workforce and

given that South Australia is home to approximately 32 percent of Australia’s defence industry labour force

(Skills Australia, 2012), the potential for collaboration have already been established. Indeed, the choice

between focussing on the defence or resource sector is one often encountered in South Australia, with the

Defence Industry Innovation Centre already advocating firms to work in both sectors (Garth, 2012). Rather

than competing with companies in the other sector, the diversified exposure can help a company smooth

capacity pressures, cash flow and profits (Garth, 2012).

Given that South Australia already has a number of companies delivering specialist services and products to

the Australian Defence Force (Defence SA, 2013), the extension of mining technology from defence

technology makes South Australia a promising location for the delivery of innovation and interoperability

solutions for mining.

48 | CSIRO

5.3 Remote operations hub

The challenge and the opportunity

The term automation generally refers to the full or partial replacement of a function previously carried out

by human operators either physically or mentally (Parasuraman et al., 2000; Thorogood et al., 2010).

Autonomous and remote operation technologies are being pursued in the Australian mining industry with

the multiple objectives of improving productivity, environmental performance and health and safety, as

well as addressing labour shortages and reducing costs (Bellamy et al., 2011; CSIRO, 2009; McNab et al.,

2011; Parreira et al., 2010; Parreira et al., 2009; Rio Tinto, 2008).

Most automation is currently concentrated on the component or subsystem level providing

semi-autonomous operation and is engaged on a small scale relative to the number of mines, processing

plants and export facilities in Australia (Lynas et al., 2011). The strongest growth in automation is expected

over the next 10 years and is expected to involve a gradual shift towards automation at the systems level

and eventually leading to fully autonomous operation cycles (Dudley et al., 2010). Opinion differs as to

whether the most rapid growth in the uptake of these technologies will be in underground or surface

mining (McNab et al., 2011).

With automation comes the opportunity to control an operation over the internet through remote

teleoperation, hence the emergence of remote operations centres in Perth (Rio Tinto, 2010) and Orange

(Shields, 2010). As the prevalence of automated mines increases, opportunities for centralisation of

services to multiple mines also increase. The challenge and opportunity for South Australia is to emerge as

a remote services centre before a location outside the state develops this capability.

What if...?

Working in partnership, industry and Government worked to establish a technology precinct in Adelaide to

support the extension of Olympic Dam through remote mining services by co-locating a range of service

providers around hardwired, powerful and scalable computational infrastructure. This would include

service provision in virtual reality, immersive experiential learning, infrastructure maintenance and support,

communication failsafe systems, remote health provision, virtual learning environments and real time

communications. Already, the Australian mining industry is preparing for a transition in skills required for

the autonomous mine of the future as evident in work by organisations such as the Mining Industry Skills

Centre’s Automation Skills Formation Strategy (McNab et al., 2011). By working with the university sector,

this technology precinct could become a global training centre for remote mining. The precinct could also

become a strong thought leader in managing this transition which has potentially significant implications

for semi-skilled and unskilled workers who live in regional and remote areas and are not geographically

mobile (Bellamy et al., 2011; Mottola et al., 2009; Parreira et al., 2009).


Establishing Adelaide as a remote operations hub could take a number of forms as the services which could

be provided from Adelaide are numerous. Some examples are outlined below.

A virtual mining centre. The highest profile remote mining centre in existence is part of Rio Tinto's remote-

controlled “mine of the future” concept. Through its centre at Perth airport it can co-ordinate its mining,

rail and port operations 1500 kilometres away in the Pilbara from the new centre. Staffed by more than 400

technical planning staff, controllers, schedulers and support staff, it uses video, radio and monitors to track

employees and machinery. Supporting this concept are suppliers providing high end computer software

and hardware services to the site as well as continued training and cultural support around virtual

operational management (Co et al., 1998; Laventhal et al., 2010).

Managing data overload. A challenge in the mining industry is unlikely to be lack of data, but rather too

much data given that the average mining control room has the challenge of sifting through 20,000 sources

of data gathered from monitoring networks all over a mine (Mining & Technology Australia, 2013a).

Without the means to sort and analyse these flows, data is unable to be constructively utilised to


contribute to decision making and performance improvements. The challenge is to present the data and

information in a useful format that is easily digestible (Mining & Technology Australia, 2013a).

Big Data systems are being developed to facilitate collaboration among the various silos that make up the

mining and administration facilities of any operation. For example, this allows the mining team to

collaborate with the process team and the geology team to facilitate more informed decision making

throughout the mining process (Mining Media International, 2013). These interactions replace the

traditional ‘end-of-shift roll-up and report process’ typical in most mining operations (Mining Media

International, 2013).

TIBCO Big Data solutions are one provider of real-time technology. This technology analyses information

flows, identify patterns and trigger events so operators can distinguish and view critical information

(Mining & Technology Australia, 2012).

Servicing automated operations. As automation infiltrates more and more aspects of the mine, specialist

knowledge is likely to be required to service this equipment. In remote mining locations however, it may

not be feasible to fly in these specialists to address maintenance issues (CSIRO, 2013c). One alternative that

is currently being developed is ReMoTe (Remote Mobile Tele-assistance) technology. ReMoTe is able to

connect remote experts with on-site operators to provide specialised and timely assistance. It operates via

the use of a wearable computer with a camera mounted on a helmet and a near-eye display (CSIRO,

2013c). A video screen in the near-eye display provides a shared visual space between the remote expert

and the operator, allowing the expert to point at objects and show how to perform certain actions while

the operator can virtually see the expert’s hands (CSIRO, 2013c). ReMoTe’s unique combination of the

immersive environment, remote collaboration technology, augmented reality, user interface and user

experience technologies provides a hands-free way of connecting with experts for operational supervision

in various environments

Telehealth provision. Predictions about the workforce implications of automation range between

significant reductions in a mine workforce and an ongoing need for on-site roles that will increase with

industry growth (Grad, 2010). Recent work identifies a possible 30 to 40 percent reduction in the mining

workforce (50 percent reduction in operational roles) at those operations which adopt large-scale

automation (McNab et al., 2011). In this event, medical infrastructure to support the health and wellbeing

of those workers who remain at the remote operational location becomes less viable, creating the

opportunity for the provision of telehealth services out of the remote operations centre. Services provided

out of Adelaide include the provision of telehealth services to those who remain in residence in close

proximity to the operations - those who undertake essential maintenance of the sensors and sensor

networks that monitor the environment both within and outside the mine.

The diagnostic efficacy and cost effectiveness of telehealth services has developed to the point where these

services are becoming mainstream. This is most evident in the case of teleradiology, but is also applicable

to tele-emergency and telepsychiatry.

• Teleradiology is now standard practice, as the quality of digital imagery is such that there is no

significant difference in diagnostic accuracy between the detection of pathology in original films

and digital images. In a study conducted in 1998, three independent radiologists were asked to

view chest and bone radiographs in both digitised and analogue formats (Larson et al., 1998). There

were no significant differences found in the sensitivities for detecting nodules, pneumothoraces,

and interstitial lung disease in the chest x-rays or fractures in the skeletal x-rays. When a

teleradiology project was piloted by the US Defence Force, cost analysis taking into account the

cost of telemedicine infrastructure revealed considerable savings through the prevention of

unnecessary evacuations and transfers (Brumage et al., 2001).

• Tele-emergency for minor injuries has been shown to be safe and clinically effective. A randomised

controlled trial has demonstrated that the level of care provided is equivalent to, but not superior

than, that provided by an on-site specialist or general practitioner (Benger et al., 2004). Cost

effectiveness is dependent on comparisons with the cost of current medical practices and

differences in healthcare cover.

50 | CSIRO

• Teleconsultation for mental health is increasingly being acknowledged as a requirement for remote

and stressful environments. Common diagnoses include post traumatic stress disorder, anxiety,

depression and chronic pain but consultations can also provide cognitive assessment in alcoholics

and the detection of less common psychopathologies (Pietrzak et al., 2010). Accessibility is a driving

factor in calculating cost benefits, with the distance travelled by the psychiatrist the primary

expense.

Many of the areas of Australia best serviced by telehealth are also those areas where fast broadband will

be provided by satellite. Dods and colleagues (2012) provide an overview of the broadband implications for

telehealth provision in remote Australia.


Adelaide is Australia's fifth largest city, has a significant tertiary education sector and a history of

technology based services developed off the back of the automotive and defence industries (EIU, 2012).

With the largest minerals development in the Southern Hemisphere (Olympic Dam) located in the state and

the proactive stance of the State Government to minerals development, it has the heritage, institutions,

skills and incentive to build critical mass in realising collaborative action on remote services for minerals

operations.

South Australia also houses world-class renewable energy sources, generating approximately half of

Australia’s wind-powered electricity generation capacity (Climate Commission, 2013). The State is well-

positioned to expand its capacity for generation of renewable energy (Climate Commission, 2013). This

could make it an attractive location for an energy-intensive remote operations and data centre.


5.4 Intelligent processing


Australia, with a history of stable government and the reputation of the high grade, high quality deposits

underpinning places such as Kalgoorlie, Olympic Dam and formerly Broken Hill, has been an attractive

destination for the minerals industry (Clark, 2011). However, at the same time as costs of production rise

and competition grows internationally, many of these world-famous and world-class deposits are being

mined out. Many deposits in Australia and elsewhere in the world remain unexploited because they are

highly complex to extract and process. This is exacerbated in Australia because of high labour costs, a

relatively small population and an ageing demographic profile. Inevitably, this is leading to massive

pressure on the minerals sector workforce. A report by the National Institute for Labour Studies for the

Minerals Council of Australia (Molloy et al., 2008) concluded that the workforce will need to increase by 68

percent by 2020 to sustain the sector. This challenge can only be met by changing the relationship between

the workforce and minerals production and by achieving more with fewer people. Doing more with fewer

people also addresses another Australian challenge – that of increasingly strict safety regimes, with zero

harm now being the goal of the industry.

Additionally, with heightened calls for responsibility in mining, lower impact mining and processing

technologies, integrated as part of a socially responsible industry, are required. In terms of greenhouse gas

emissions, the worldwide industry produced produces more than 3.3 billion tonnes of CO2 per annum on a

life cycle basis. In Australia, the sector’s direct and indirect emissions accounted for 13.8 percent of the

country’s greenhouse gas emissions of 576 million tonnes in 2006 (Garnaut, 2008). It is an energy intensive

industry that accepts an obligation in Australia to reduce its emissions intensity.

Together, these drivers herald the arrival of the era of “geologically intelligent” processing, where

autonomous mining systems are capable of mining ore selected for grade and are able to sort ore as it is

mined. Deep ore mining systems keep people isolated from the hazardous activities of drilling, explosive

placement, access construction and ore haulage. Highly precise “surgical mining” is now possible through

the use of non-explosive rock breaking and rock cutting technologies. Underground vehicles are powered

by low-carbon fuels and fuel cells resulting in radically reduced emissions and mine ventilation costs. Large

resources of mineral sands, alluvial gold and alluvial uranium are being mined with minimum impact on

other land uses using keyhole mining techniques.

The opportunity for South Australia is in using ICT and the data interoperability skills for advanced resource

characterisation to integrate existing capabilities and lead new applied research to advance the goal of a

fully integrated intelligent processing plant that provides feedback into the common mine model and

allows for adaptive operations.

What if...?

South Australia were to develop control systems that integrate seamlessly with the common mine model to

allow near real-time control of both excavation and processing at an increasingly granular level. This would

be linked to the advanced resource characterisation capabilities discussed in relation to precompetitive

data.


The chemistry-free laboratory. ICT enables a suite of analytical services to be embedded within an

operational process. Appropriate sensors (using a range of spectroscopic techniques) can be integrated into

the process workflow to feed back information on ore grade and process performance in real time as ore

content moves through the processing plant. This data can be simultaneously be fed back into the geo-

metallurgical mine model and used to modify operations by shifting excavation away from areas of low

grade ores and deleterious materials to areas with higher grade ores.

Intelligent information processing. Intelligent processing plants can sort and selectively process ores by

grade based on external conditions such as commodity spot prices, current transportation and shipping

costs, etc. Under current operating set ups, market information is likely to be stored in different systems to

52 | CSIRO

ore processing data. Thus decisions on product processing cannot be easily informed by information

regarding market conditions such as commodity prices and sales contracts in real-time. By factoring real-

time market information into processing decisions, production processing can be more effectively managed

and traditional bottlenecks can be avoided.

Expert control systems. Transparent and accurate real-time expert control systems can manage every

aspect of the production cycle. For example, with Australia’s mineral resources becoming increasingly

“complex” (lower in grade and with a more distributed and intricate mineralogy), grinding to full liberation

is becoming a difficult and extremely energy intense process that cannot always be economically afforded,

heap leaching operations are increasingly becoming the process option of choice. Such leaching operations

are presently rather low-tech and unsophisticated, hard to control and extremely slow. Application of ICT

has the potential of fundamentally changing that situation, by turning leaching into a smart, high-tech, and

tightly controlled processing route for Australia’s minerals.

How this might work is as follows. An ore heap is designed such that it is equipped with spatially distributed

multi-parameter sensors that measure, in real-time and spatially resolved, parameters that are known to

influence leaching behaviour, such as temperature, pH, metal ion concentration, oxygen and CO2 levels,

etc. The spatial and temporal Big Data thus collected by this sensor network are analysed in real time and

compared with sophisticated computer models of the heap operation, running in parallel, i.e. in, or close

to, real time. A cleverly engineered system of transport lines and valves allows for the (semi-continuous)

spatial adjustment of process parameters, keeping the overall operation within its optimal process window.

A concept like this would critically build on a range of ICT capabilities – sensors and sensor networks,

computer modelling, communication strategies, decision systems, Big Data analysis, with a strong emphasis

on measurement and control.

New paradigms in processing. Other new paradigms in the processing area could include:

• In-situ mining brings us closer to the concept of the “invisible mine” and allows access to deeper

resources without the environmental damage associated with open cut mines;

• Dry processing techniques allow for new projects to begin that were previously unfeasible due to

lack of access to affordable process water; and

• Biological agents change the way we break down complex mineral assemblages.


South Australia has already established itself as a pioneer in the acquisition and dissemination of

precompetitive data to encourage exploration through its Plan for Accelerating Exploration (PACE) initiative

and its South Australian Resources Information Geoserver (SARIG) data delivery portal. Through PACE,

mining companies have access to new online geosciences databases and minerals systems analysis to help

identify pathways for new mineral exploration (Government of South Australia, 2013). The PACE initiative

has been recognised globally as “one of the most innovative government minerals resources initiatives”

(Government of South Australia, 2013).

South Australia also has strong tertiary and research providers in minerals processing through the Ian Wark

Research Institute. At The Wark, research is focussing on a systems minerals processing whereby minerals

resources are explored and mined in a more efficacious manner and processed in more sustainable and

energy efficient ways with a minimum ecological footprint and a high level of social acceptability (Follink,

2013). This will be achieved though the integration of relevant mineral ore characteristics, individual

physical and chemical processes and unit operations, their inter-dependency and the plant performance for

prediction, optimisation and maximisation of product yield and recovery (Follink, 2013).


5.5 Human/Machine Interaction


Despite decreasing levels of human involvement with increasing automation, humans continue to play an

important role in systems operation, especially in terms of coping with unexpected situations (Lynas et al.,

2011; Sheridan, 2002). Traditionally, remote operation in industry has involved video being transmitted to a

remote operator, who makes decisions based on the visual evidence and responds by commanding the

equipment to take action (i.e. tele-operation). Unfortunately, for many mining applications, this type of

interface does not offer the human decision-maker sufficient situational awareness to effectively maintain

manual production levels. This has in some instances limited the applications for remote operation of

mining equipment over maintaining a human presence at the operational face. The opportunities emerge

where ICT enables the situational awareness and communications necessary to manage precision

operations, by often large pieces of equipment to significant standards of accuracy.

Additionally, automation can introduce new sources of stress, such as information overload and boredom

and new risks such as automation-induced complacency, over-reliance on and poor understanding of

automated equipment and poor communication and coordination between automated equipment and

human operators, including human intervention during system failure (McNab et al., 2011). Such sources of

risk have been observed across the aviation, transportation, medical, manufacturing, materials handling,

nuclear power and processing industries by Lynas et al. (2011). There is also a degree of disconnect in

understanding the physical scale and impact of decisions if these decisions are made remotely as there is

no immediate or haptic feedback related to the decision. ICT based opportunities exist to relieve the stress,

repress the boredom and enhance the human-machine interaction.

What if...?

South Australia established itself as the world-leading solutions provider for human and autonomous

systems interactions. These technologies are able to be specifically developed and tailored to the specific

needs of a companies’ operating environment. Via these technologies, humans and machines are able to

interact seamlessly to ensure the optimisation and efficiency of processes while guaranteeing the safety of

human operators and the best use of automated equipment.

What might this look like?

Safety monitoring and process optimisation. Human behavioural monitoring sensor suites track potentially

hazardous human physiological conditions. Feedback from these sensors can then be used to alert the

operator to implement the best course of action given the circumstance. This aspect of monitoring focuses

on the human component only. Further to this, real-time environment monitoring tracks both autonomous

and human-controlled machines to look for potentially dangerous interactions. Tracking will provide the

necessary feedback and control for safe interactions between autonomous and human processes. In

addition to safety measures, real-time tracking can also help optimise processes. Human, machine and

environment data is tracked and can be analysed to look for optimisation points and improvement to safety

procedures. Fuel consumption is one possible point of optimisation. Operators can influence overall fuel

economy by as much as 35 percent (Bennink, 2008). Driving a truck in a stable and consistent manner is

able to minimise fuel consumption however this is unlikely at the end of a 12 hour shift (Parreira et al.,

2009). Automation has the potential to operate trucks more consistently.

Augmented reality and learning systems. Augmented reality allows humans to remotely control semi-

autonomous systems. As the level of automation increases however, the required human input can become

tedious and repetitive. Augmented reality processes can also be used as an input into gamification to

remove the tedium from such highly repetitive human-centric processes. As part of this process, learning

systems allow autonomous systems to learn from human operators to increase the efficiency of the

automated element of the operation. Neural networks can also allow autonomous systems to learn and

adopt optimal behaviours by analysing past activity.

Simulation and training services. A successful example of the opportunity afforded by the advent of

remote operations is Immersive Technologies, a global company grown out of Perth which provides

54 | CSIRO

simulator training solutions. Immersive Technologies’ reputation is evidenced by the loyalty of the leading

Original Equipment Manufacturers (OEM) including Caterpillar, Liebherr, Komatsu, Hitachi Construction

Machinery and P&H Mining Equipment. These OEMs exclusively support the development of training

simulators by providing access to confidential machine information (Immersive Technologies, n.d.). The

resulting product is therefore tailored to the specific needs of the OEM.


South Australia already has capabilities in autonomous vehicles and robots and augmented reality

technology (Follink, 2013). These capabilities are mainly located within the University of South Australia

(Defence Systems Institute, School of Information Technologies and Mathematical Sciences), Defence

Science and Technology Organisation, Flinders University (School of Computer Science, Engineering and

Mathematics and Medical Device Research Institute) and the University of Adelaide (Australian Centre for

Visual Technologies) (Follink, 2013). Automation manufacturing capabilities also exist in the State. For

example, SAGE Automation is a privately owned South Australia manufacturer that specialises in complex

control and automation projects (Government of South Australia, 2013).

The use of automation in mining will create demand for a highly trained and specialised workforce. Since

opening in 2007, the University of Adelaide’s School of Mining Engineering as already grown to be the

second largest centre for Mining Engineering training in Australia (Government of South Australia, 2013).

Through its existing partnering with institutions including the Kalgoorlie School of Mines and the University

of New South Wales as well the Minerals Council of Australia (Government of South Australia, 2013), the

School of Mining Engineering already has the potential to closely align its training with industry needs to

produce the requisite skills required in the future mining workforce.


5.6 Crowdsourcing regulation


The World Economic Forum report (WEF, 2011) reviews the principles for Responsible Minerals

Development and identifies six key building blocks:

1. Progressive capacity building and knowledge sharing among all stakeholders;

2. A shared understanding of the benefits, costs, risks and responsibilities related to mineral

development;

3. Collaborative processes for stakeholder engagement throughout the life cycle of mining projects;

4. Transparent processes and arrangements;

5. Thorough compliance, monitoring and enforcement of commitments; and

6. Early and comprehensive dispute management.

These building blocks reflect best practice principles from a number of other sources including the

International Council for Mining and Metals, the Global Reporting Initiative and the Extractive Industry

Transparency Initiative. With the advent of social networking, coupled with our ability to analyse data and

crowd source solutions through the internet, ICT has a unique opportunity to support these principles of

transparency, sharing and a platform for dialogue and monitoring (Wellman et al., 2002).

At the same time, mining companies are using advanced sensors and data analytics tools to gather an

increasingly large amount of environmental data at the mine site. Many of the environmental conditions,

such as water tables, soil cover, being monitored have the potential to impact local communities. The

notion of “crowd-sourced regulation” captures the shifting dialogue between operations, Governments and

stakeholders. It enables data on the performance of a mining operation to be sensed, analysed and made

publically available through sensors and sensor networks coupled with an information platform and portal.

Coupled with event recognition and pattern analysis software, environmental impacts are better able to be

anticipated and addressed proactively. Through this transparency, coupled with formalised processes of

dialogue and consultation, not only are local communities better empowered to understand the operations

that exist on their doorstep, but they can also engage with the operations to improve performance through

a constructive dialogue.

What if...?

South Australia invested in a world-leading information platform streaming real-time environmental

performance data from the Government’s website to a publically available system backed up by policy and

practice. This website would require mining companies to release detailed environmental data to the public

through a government portal. This will present opportunities for South Australia ICT companies (especially

SMEs) to develop a wide range of data analytics, visualisation and reporting tools that operate against this

data.


An information platform as a vehicle for dialogue. As an example, the data.gov initiative of the US Federal

government has established a platform that makes available a wide range of datasets (including

environmental data) to the public (www.data.gov). The purpose of data.gov is to increase public access to

high value, machine readable datasets generated by the Executive Branch of the Federal Government and it

reflects a decisive step towards the principles of participatory democracy (Dryzek, 2000) where public

participation and collaboration build consensus and assist trade-offs on behalf of society. Off the back of

the data presented on this site, many tools and visualisations have been developed using data analytics.

Collaborative tools to develop metrics for site performance. Through ICT-enablement, greater input into

the datasets of most interest to the local population can be gathered and addressed as they change over

time. For example, the South Australian government can prioritise the tools for data analysis based on

community input. For example, a tool that allows 3D visualisation of the water table and water flows for a

56 | CSIRO

particular plot of agricultural land would allow the farmer to visually see the impact that a mines’ water

usage is having on his land.

Environmental sensing and sensor networks (Hart et al., 2006). At the heart of the notion of crowd-

sourced regulation is the availability of data regarding the performance of the operation. It is assumed that

this data is accessible, together with its open and transparent monitoring and assessment for

environmental performance both in terms of impacts and also for patterns that may be lead indicators for a

particular event. The source of the data is an Environmental Sensor Network (ESN). These networks have

evolved from passive systems (logging events in situ onto data stores which can be downloaded using some

form of manual intervention) into ‘intelligent’ sensor networks (comprising a network of automatic sensor

nodes actively communicating with a Sensor Network Server (SNS)) where these data can be integrated

with other environmental datasets (Hart et al., 2006). ESNs range in scale and function. Large Scale Single

Function Networks tend to use large single purpose nodes to cover a wide geographical area whereas

Localised Multifunction Sensor Networks typically monitor a small area in more detail, often with wireless

ad-hoc systems (Hart et al., 2006). Biosensor Networks use emerging biotechnologies to monitor

environmental processes as well as developing proxies for immediate use (Hart et al., 2006). All are

potentially relevant contributors to different aspects of environmental monitoring around a mine site and

also the assessment of cumulative impacts across a region. Regardless of scale and function however, these

sensor network will offer a cheap, reliable and robust system for performance monitoring.


South Australian universities already have ICT capabilities in sensors and sensor networks (Follink, 2013).

Further development will build upon these existing capabilities and capitalise on the established research

skills in the State. These capabilities are mainly located within Flinders University (Medical Device Research

Institute, Centre for NanoScale Science and Technology), University of Adelaide (Institute for Photonics &

Advanced Sensing), University of South Australia (Institute for Telecommunications Research) and the Deep

Exploration Technologies Cooperative Research Centre (Follink, 2013). The close proximity of these

locations give South Australia an advantage given that clustering is able to facilitate growth and the

innovation (Government of South Australia, 2013). Recent discussion at the Wark Institute have centred

around the need the employ statistical-analytical methods to make use of the data collected through

sensors and sensor networks (Follink, 2013). Advancement of these methods will facilitate the data

availability underlying crowd-sourced regulation.


6 ICT Scenarios for Energy Resources

This section outlines five discrete scenarios for South Australia in Energy Resources (Figure 31). These are

illustrated below, mapped against both the value chain for energy resources and the business drivers that

they best address. These scenarios are not mutually exclusive and many have significant overlap and

synergies.

58 | CSIRO

Figure 31. Specific scenarios for South Australia mapped against the value chain


6.1 Advanced reservoir simulation


The acquisition and availability of geoscientific data is no longer the limiting factor in geological

interpretation and resource characterisation (Duffy et al., 2006). Intense innovation in our ability to

measure properties and sense our environment faster, cheaper, remotely and continuously has led to an

explosion of data availability (Reitsma et al., 2009). It is now within our ability to collate and interpret this

data in many varying dimensions to understand the resource that constrains the exploration and

characterisation process.

The opportunities for ICT to assist in data collation, integration and interpretation are significant. Some of

these opportunities are already being developed, particularly in the area of data acquisition, data storage

and geological simulation. Expenditure in the exploration stage tends to be high risk, given that not it will

not generate any revenue if oil and gas are not found or if the reserve is non-commercial (Productivity

Commission, 2009). Technology that can reduce costs and increase confidence at the exploration stage is

highly prospective. For this reason, technologies such as 3D seismic and horizontal drilling are key

technologies that have reduced the costs in both the exploration and production stages (IEA ETSAP, 2010).

The new lightweight, rapid and portable drilling sensors and techniques developed by the Deep Exploration

Technologies Cooperative Research Centre will allow for cheaper and more accurate geological data to be

collected (DETCRC, 2012) and unmanned aerial vehicles and airborne sensors allow for ultra-high-resolution

geo-physical data capture (Hewson et al., 2010)

However, the full potential to transform efficiency and accuracy in resource characterisation through

integration and data interoperability is yet to be realised. Currently, human interpretation and integration

of data is the norm. Some data interoperability is enabled through software languages such as the

GeoSciML code (CSIRO, 2013b) which enables comparability between differing datasets, measured on

differing scales. Trial and error is used to discover relationships between observations and useful

knowledge. This is coupled with the interpreter’s experience and knowledge with success being highly

dependent on the precedence of the observed system behaviour and the skill of the interpreter. In many

circumstances more data is available than is used in interpretation as a result of limitations in technology

and interpreter capacity. Single models are generally produced and the update cycle when new data arrives

is slow.

Emergent ICT technologies can enable far greater levels of computational augmentation of human

interpretation. The use of algorithms that automate handling of large datasets, the application of high

performance data systems coupled with large data stores, access to data governed by open standards to

ease the integration burden (for example via the Spatial Information Services Stack (SISS)) and the inclusion

of qualitative data all increase the knowledge base. Data mining, machine learning and signal processing

techniques can be used in a generic fashion to discover data-driven relationships across multiple data

types. In this way, final human interpretation is then used to create the full model with the assistance of

the pattern analysis and the analytics capabilities emerging as a result of the advent of “big data” and

statistical inference.

However, these advanced ICT enablers will change the skill set required of the geologist. Although data

integration and interoperability through ICT augments the geologist’s ability to understand the ore body, it

simultaneously reduces the data entry, data cleaning and data analysis components of the role which often

form the training ground for early career geologists (Hutchinson, 2001).

What if...?

South Australia pioneered the next level of maturity in data integration by demonstrating the efficiency and

accuracy that can be achieved by greater levels of symbiosis between computational analytics and human

experience. Computational simulation used probabilistic inversion techniques and rapid model generation

to realise multiple possible models that are constrained by the observations and human hypothesis.

60 | CSIRO


Uncertainty quantification would be used to understand where additional data would improve the models,

hence defining priorities for data acquisition. In addition, algorithms can be used to derive proxies for

important rock properties (that are otherwise expensive or difficult to obtain) from qualitative

interpretation. In its most advanced state, model predictions would then be then tested against human

hypothesis, physics and observations (e.g. will it produce the folds and fracture patterns suggested in the

observations).

Achieving this requires:

• Data integration with numerous targeted GIS, analysis and visualisation packages

• Databases that are content queryable and the filtered delivery of 3D/4D data

• Common information management and curation practices from a range of data custodians and

data acquisition service providers

• A new relationship between the geologist and numerical simulation

• New ways of measuring value from data and agreed relationships between proxy data and

important measurements

• Processing capacity that exceeds desktop computational systems, drawing in cloud and HPC

facilities.


With existing (major) energy companies in South Australia, as well as resource mapping and modelling ICT

vendors and the PACE initiative from the State Government, South Australia is already advanced in its

modelling and mapping capabilities. Coupled with the presence of defence sector researchers (BAE, DSTO)

and university sectors such as IMER specialising in electrical geophysical and image analysis, there is an

innovation pipeline already in existence in the state. This is complemented by the drilling research being

undertaken by the Deep Exploration Technologies CRC.


6.2 Monitoring and control


The intelligent oil and gas field vision is to access oil and gas resources in remote locations and then extend

the application to other oil and gas facilities. To progress this vision, a greater need for remote information

retrieval and autonomous inspection from within the field is required. Therefore, the challenge is to create

technologies that realise the following paradigm shifts in the oil and gas industry for development of

unconventional resources, such as:

1. Routine inspection and monitoring of entire field relying solely on the use of inexpensive and

intelligent technologies.

2. Remote control of production systems.

3. Unwired field condition, environmental and process monitoring and control using vast wireless

sensor networks, both mobile and stationary.

Some areas that can potentially contribute are:

• Real-time monitoring and data transmission from the entire field to office;

• New low cost and reliable sensors;

• Distributed sensor networks and communications protocols;

• Data logging and information retrieval;

• Autonomous monitoring, inspection and repair; and

• System control.

Monitoring and control systems will be at the core of any intelligent field concept because information of

the status of the field operations and different facilities (from wells to production and handling facilities) is

critical to assess the performance of the systems. Also the information will be needed to evaluate different

actions to optimise and manage production of oil and gas from well to customer. The oil and gas industry

has been working in the e-field concept for many years but there are still gaps in sensors devices and

sensing networks technology to allow low cost and reliable monitoring and control systems.

What if...?

Industry and government worked to establish a technology precinct in Adelaide to support the

development of technology to monitor and control remote gas production operations and technical

services by co-locating a range of service providers around a cost effective, highly reliable, hardwired,

powerful sensor/actuator network and communication infrastructure.


This would include continuous operational service provision in real time mode, infrastructure maintenance

and support, communication failsafe systems, remote control provision and real time fast communications.

Already, the oil and gas industry is developing surveillance and technologies required for the intelligent oil

and gas field of the future (Al-Dhubaib et al., 2008; Mikkelsen et al., 2013; Vignati et al., 2013). By working

with the university sector, this technology precinct could become a global training centre for intelligent

fields operations.


South Australia has an existing highly skilled labour force used to working with automation in the

automotive and manufacturing sectors. Coupled with the South Australian defence sector, businesses are

positioned to develop secure failsafe communications networks and protocols that link operations centres

with global operations and to build architecture with the necessary reliability, scalability and extensibility.

Within the university sector, centres such as the Australian centres for photonics and advanced sensing, the

centre for physical technologies for context based mage analysis and the Australian Centre for Visual

Technologies are developing technology to integrate signals from multitude of surveillance cameras –

commercial 3-D interfaces exist.

62 | CSIRO

6.3 Production optimisation


Development of the huge unconventional gas resources “coal bed gas and shale gas” will need the drilling

of a high number of wells at locations where advance reservoir characterization tool indicates high

probability of finding sweet spot. The high number of location and number of wells will require a large

surface infrastructure with capacity to handle unwanted produced fluids (such as water) or to carry out

work over operations in wells to increase production.

Optimising recovery involves methodologies/technologies for real-time management of field operations

along with the development of i-field tools for reservoir scale monitoring and diagnosis that integrates real-

time well data with 4D seismic. A recovery optimising system will include: (1) integrated system for real-

time field operations follow-up, production optimisation and control, history match and forecast; (2) tool

for prediction of saturation and pressure from 4D seismic and EleMag; (3) integrated water management

system, including water production prognosis and control, time-lapse monitoring and diagnostics, and

innovative use of the water for value creation.

The system will need to integrate the diverse technology scenarios discussed in this document from

advance reservoir modelling to smart operations along with management and analysis of data collected

through the extensive monitoring network (subsurface and surface) linked an overall field production

model to simulate (1) the performance of the different components to compare with the production data

and (2) evaluate diverse course of action to optimise and improve production (3) carry out actions on the

process by remote control of operations. The system should be able to run continuous very fast simulations

of the all field operations and reservoir updates that are needed to take actions to improve production.

The ultimate goal will be to have autonomous or semi-autonomous production systems that will allow for a

reduction in the number of personnel needed to develop gas/oil fields in remote locations.

What if...?

Industry and Government worked to establish a technology precinct in Adelaide to support the

development of technology to optimise remote gas production operations and technical services by

locating a range of service providers around a cost effective, highly reliable, powerful process and flow

simulation infrastructure. This would include continuous service provision of real time monitoring of

subsurface and surface facilities, infrastructure maintenance and support, communication failsafe systems,

remote control provision and fast communications networks. Already, the oil and gas industry is developing

production optimisation technologies/methodologies required for the intelligent oil and gas field of the

future (Airlie et al., 2004; Boomer, 1995; Popa et al., 2005). By working with the university sector, this

technology precinct could become a global training centre for intelligent fields operations.


A number of technologies are crucial in the production of gas. Well integrity is a key risk in the extraction of

gas, particularly the integrity of cement seals, and pressure sensors are used to detect leakage from the

product casing (Cook et al., 2013). A range of sensing technologies are used to monitor in real-time the

subsurface propagation of hydraulically induced fractures, such as microseismic, tiltmeter and pressure

sensors, temperature and flow logging, tracers and proppant tagging, fibre-optics and photography and 3D

seismic methods (Cook et al., 2013).

Different systems would be required for different forms of unconventional gas since Australian shale gas is

typically located at depths in excess of 3000 metres, considerably greater than CSG (Cook et al., 2013). In

addition, shale is significantly less permeable and less porous than coal such that the extensive hydraulic

fracturing is required for gas extraction (Cook et al., 2013). Low areas of permeability may see hydraulic

fracturing increase from current levels of around 10 percent up to 40 percent (Rutovitz et al., 2011).

The number of drill rigs required is a function of the drilling rig productivity, as well as the timing for well

completion and hydraulic fracturing (Cook et al., 2013). There are currently only two rigs in Australia that

are capable of completing the drilling and fracturing work required for shale gas (Cook et al., 2013). Given


the differences in depth of shale gas wells and CSG, the drilling technology in Australia for CSG is unable to

be used for shale gas (Cook et al., 2013), thus limiting the transferability of infrastructure between

unconventional and conventional gas extraction.

An aspect of this scenario is the creation and support of shared infrastructure and services for Tier 2

companies to simulate domestic supply chains.


Adelaide has a significant tertiary education sector and a history of technology based services developed

off the back of the automotive and defence industries. With a proactive stance of the State Government to

the ICT sector development, it has the heritage, institutions, skills and incentive to build critical mass in

realising collaborative action on remote services for oil and gas operations.

Australia has significant unconventional gas resources, including CSG, tight gas and shale gas (Geoscience

Australia and ABARE, 2010). Total identified resources of CSG are around 168,600 PJ, while tight gas

resources are estimated at around 22,000 PJ (Geoscience Australia and ABARE, 2010). In South Australia

specifically, the most advanced unconventional gas projects in South Australia are located in the Cooper

Basin and include reserves of shale gas, tight gas and deep coal seam gas (DMITRE, 2012). There are also

unconventional gas plays in the Cooper, Arckaringa, Pedirka, Eromanga, Otway, Simpson, Officer and

Gambier Basins (DMITRE, 2012). Thus South Australia has significant potential to meet future demand for

unconventional gas demand. As such, development of production optimisation techniques will ensure the

maximum value is realised from these reserves.

With major energy companies such as Santos and Beach Energy located in South Australia, state experience

in both vertical and long reach drilling, the Moomba facility already accepting production from multiple gas

and oil fields and existing pipeline infrastructure, many services and systems are already in place for

continued optimisation. Within the university sector, there is research on defence and systems integration

and also interoperability systems for oil and gas using fundamental computational research. Additionally,

nanoscale research on the behaviour of chemical surfaces offers potential for significant flow optimisation

in the gas sector.

64 | CSIRO

6.4 Smart information platforms


The Productivity Commission (2002) has estimated that ICT applications impacted national productivity

growth by 0.2 percentage points per annum, an important contribution within the context of Australian

multifactor-productivity (MFP) growth of 1.8 percent per annum during the 1990s. Impacts observed in

major ICT-adopting sectors, such as financial Smart Information Systems, were even more pronounced. One

recent report estimates that the adoption of smart technology in energy, water, health and transport and

the roll-out of high-speed broadband could add more than 70,000 jobs to the Australian economy and 1.5

percent to the level of Australia’s Gross Domestic Product within a few years (Access Economics, 2009).

If this enhanced “digital productivity” is combined with the concept of the “i-field” and the ability of smart

information systems to perform systemic risk analysis based on pattern analysis and recognition, the

opportunity for new digital control systems to run computationally all aspects of an operation is attractive.

If enhanced “i-field” is combined with the ability of smart information systems to perform processes

performance analysis and systemic risk analysis based on pattern analysis and recognition, the opportunity

for new digital control systems to run in an autonomous/semi autonomous way all aspects of an operation

is attractive.

However, this new and emerging use of technology with increased reliance on electronic delivery of critical

and commercially sensitive information carry concerns around security and privacy. There is a need to

increase consumer and business confidence through improved solutions for the safe and protected

handling of highly sensitive commercial and technical information. Even though the oil and gas industry has

invested a lot of effort to improve the use of information technologies in its business, there is still a big gap

regarding the handling and managing of ultra fast systems for transmission and processing of collected

data.

Aggravating these problems are alarming declines in the number of students choosing careers in

mathematics and computer science (Lyons et al., 2010). Critical issues to address include:

• A focus on raising awareness of Smart Information Systems in the manufacturing sectors. Often

small or boutique manufacturers are not aware of the range or potential of information rich tools

or systems;

• Providing assistance to SMEs to introduce Smart Information Systems into their unique processes;

• Fostering links between the National Innovation System and SMEs;

• Developing a workforce skilled in use of Smart Information Systems; and

• Addressing “ICT literacy” within the education system to develop early stage understanding of the

role of ICT within many sectors of the economy including manufacturing.

What if...?


development of technologies to collect, transmit and process high volume of data at high speeds and

storage sensitive data from operations and process analysis in a very secure and highly protected manner

by locating a range of service providers around a cost effective, highly reliable, powerful data handling and

management infrastructure. Additionally, it could also contain algorithms derived from the finance sector

looking for patterns that could represent risks to the operation – which could be in externalities (spot price,

conflict) or in internalities to do with the operation.


The “cloud” provides a new paradigm for delivering computing resources to the gas sector on demand, in a

similar manner that utilities provide water, electricity or gas. Cloud computing architectures and software

infrastructure enables the advent of “Smart” Information Systems which are differentiated from “Ordinary”

Information Systems in that they must meet the following key requirements (VeriSign, 2004):


1. Scalability: Dramatic increases in the size of a network or in the level of use have always been a

source of complexity. For example, the number of actual devices connected to the Internet is

expected to climb to over 50 billion by 2020 (Vestberg, 2011).

2. Interoperability: Any Smart Information System should enable mediation between different

protocols, as well as mediation between multiple providers and devices. Smart Information

Systems operate to shield the end user from the underlying complexity of the network.

3. Adaptability: Smart Information Systems should be designed to adapt to new developments in

public good, commerce and communications as they occur and be flexible enough to meet the

reality of a constantly evolving form and functionality.

4. Availability: As critical transactions (such as legal, supply chain, and financial transactions) are

processed across digital infrastructure and as that infrastructure becomes the basis for increasingly

high-value and high-volume transactions, the service must maintain high levels of reliability and

availability. However, since design decisions to increase availability and reliability frequently come

at the expense of adaptability, this requirement will generally pose a significant challenge.

5. Security: The key role that Smart Information Systems play in coordination, control and safety can

make them a target for disruption of the underlying communications and information

management. Therefore Smart Information Systems will need to be built in a manner that makes

them exceptionally resistant to physical, logical, network and social engineering attacks.

6. Visibility: The intelligent collection, correlation, and interpretation of data in multiple formats from

multiple sources are generally at the heart of any Smart Information System. A Smart Information

System therefore must be able to provide visibility into usage, trends, and anomalies throughout

the entire operating network as well as any larger network of which they are a part.

Specific advantages of these smart business systems for the resources sector include, for example:

• Inventory and asset management systems that can be used to provide a better understanding of

the level of raw materials used, the cost of manufacture, the amount of waste produced, the

supplier and selling prices. Reporting systems can be extended to include modelling and scenario

planning to optimise the production processes, or to support customisation.

• Plant and equipment used in a production can be fitted with low cost sensors to provide a view of

operating performance and highly localised operating conditions. When networked, this can be

extended to provide a real time understanding of the entire production process. Individual

products or subassemblies can be fitted with radio tags and micro-devices to offer a means of

tracking and recording the whole lifecycle of the product


The ICT capabilities in the Institute for Minerals and Energy Resources at the University of Adelaide have

already begun to explore the inclusion of finance information in mining ICT application. ‘MINVEST’ is a

commercial software package that resulted from expertise in financial evaluation and risk assessment of

mining projects (Follink, 2013).

SolveIT Software (Schneider Electric) is a leading Australia enterprise software firm specialising in supply

and demand optimisation and predictive modelling across the resources value chain. Within the Teletraffic

Research Centre, analytics are used to forecast optimal pricing and scheduling and there are multiple

additional applications of this algorithmic capability. Similarly strong university capabilities in agent-based

modelling and object-oriented programming are available to develop software packages for complex multi-

stakeholder project management, decision-support tools.

66 | CSIRO

6.5 Environmental monitoring


The major oil and gas discoveries are often in very sensitive environmental areas such as farm land for coal

seam gas or deep water marine environments for off-shore fields. The growing awareness of the impact of

human society on the environment has led companies to become increasingly concerned about reducing

environmental impacts. Some of the potential environmental impacts from oil and gas production

operations are: sea floor disturbance, drilling waste, accidental oil, gas or non petroleum fluid release, soil

contamination, water sources contamination, flaring of gas, etc. This is only natural given the growth in

recognition of the need for projects to be environmentally sustainable. A significant recent example is the

Barrow Island turtle management program imposed on the Gorgon project proponents.

Nowadays, the oil and gas industry has greatly improved the management of the environmental risks

associated with their production operations in order to comply with very tight environmental regulations

which usually include very extensive monitoring programs.

Monitoring and control systems will be at the core of any continuous environmental risk assessment

program because information about the status of pollution of the areas (marine, terrestrial and air

environments) in and around production operations (from wells to production and handling facilities) is

critical to assess the performance of the pollution control and management systems. Also the information

will be needed to evaluate different actions to minimise potential risks arising from day to day production

operations. The oil and gas industry has been working in environmental monitoring systems for many years

but there are still gaps in sensors devices and sensing networks technology to allow low cost and reliable

monitoring systems.

What if...?


development of technologies to monitor environmental variables in remote gas production operations and

technical services by co-locating a range of service providers around a cost effective, highly reliable,

hardwired, powerful sensor/actuator network and communication infrastructure focused on environmental

issues such as: water-air-soil quality, leak detection, etc. This would include continuous operational service

provision in real time mode, infrastructure maintenance and support, communication failsafe systems and

real time fast communications. Industry is currently investing a lot effort in the environmental monitoring

of its operations as a lesson learned from the Macondo Well Disaster in the Gulf of Mexico.


Sensors, sensor networks, predictive analytics and social media give shape to this scenario. Environmental

sensing data is transmitted in real time to analytical software that can look for lead indicators of risk.

Advanced sensors monitor terrestrial, marine and atmospheric conditions. Many of the environmental

conditions being monitored have the potential to impact local communities – water tables, soil cover, etc.

With the application of social media, this information can be made highly transparent to a wide range of

stakeholders. Under this scenario, data about the environment is collected from the earliest stages of a

projects inception and, as a result, the regulatory and approvals processes can be streamlined.

Similar to the data.gov project sponsored by the US Federal government, this scenario makes a wide range

of datasets (including environmental data) available to the public and enables the South Australian

government takes a leadership position in “crowdsourcing regulation” by adopting regulations that require

oil and gas companies to release detailed environmental data to the public through a government portal


The existing oil and gas companies are already using advanced sensors and data analytics tools to gather

greater environmental data. Further back in the innovation pipeline, the Institute for Photonics and

Advanced Sensing is exploring interfaces to enable exploration of big data.


7 Conclusion

This report describes scenarios for South Australia to build capabilities in ICT in support of the minerals and

energy resource industries. ICT plays an important role in the value chain for both minerals and oil and gas

resources. Little economic value can be realised from a resource in the ground unless it can be located,

extracted, efficiently separated from waste materials and then processed into a useable form to be

transported to the marketplace to fulfil demand. ICT is able to assist the development of a resource so the

maximum economic value can be realised.

Currently, the resources sector is facing significant challenges and opportunities. Traditional business

models are being challenged. This report describes six megatrends which describe a narrative view of these

changes. These changes will continue to play out over coming decades and present significant challenges

and opportunities. These megatrends describe a resources sector that primarily seeks productivity

improvements and cost reductions. Environmental performance, health and safety and social license to

operate will also play a significant role. As such, a greater emphasis is likely to be placed on know-how,

skills, knowledge and information systems that help others develop their own resources.

Given these megatrends, scenarios were developed by which to illustrate the role that the ICT sector could

play in realising maximum potential in the resources sector. South Australia already has capabilities in the

application of ICT in the resource sector. These scenarios therefore present opportunities for the ICT sector

to draw upon existing capabilities to overcome the challenges and harness the opportunities.

South Australia has already established itself as an exporter of copper, uranium, iron ore, zinc, lead and oil.

It also has a wealth of natural resources in Olympic Dam that are yet to be exploited. However, relying on

traditional business models is unlikely to see these resources developed to their best use. Paired with a

strong research sector and diverse information technology industry, South Australia is well positioned to

take advantage of the next wave of growth.

However, South Australia will not be the only resources region wanting to catch this wave. Many other

regions within Australia and the world will also be lining up. Strategic and swift actions by government,

industry and community sectors can allow South Australia to capture this opportunity.

68 | CSIRO

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Appendix A Methodology

A.1 Project Components

The methodology for this project combined scenario planning with an analytic-deliberative assessment of

South Australia’s expertise and capability to identify strategic opportunities for South Australia. Our process

loosely followed the scenario development process used generically by the World Economic Forum and

applied specifically to their development of Scenarios for Mining and Metals project (WEF, 2010). More

specifically, it mapped four discrete elements of work into a conceptual framework identifying prospective

opportunity spaces for South Australia (Figure A1). We have adopted the ideals of scenario planning, with a

strong focus on the development of megatrends.

Figure A1. Comparison of the project

A.2 Megatrends and Scenarios

Companies and governments use scenario planning to explore future events and proactively plan for

change. The field received a major boost when the energy company Shell commenced research in 1972 led

by Pierre Wack.

Shell’s work pioneered the current day application of scenario planning. Company reports argue that

scenarios helped them successfully navigate the highly disruptive oil price shocks of the 1970s. Similar

observations are made by external observers with several write-ups in the Harvard Business Review

(Cornelius et al., 2005; Wilkinson et al., 2013). In 1972 a Shell Scenario report warned of a “sharp rise in

prices resulting from increasing oil scarcity, which may take place at any moment in the next few years”.

76 | CSIRO

Shell still uses scenario planning today. The company describes scenarios as “lenses that help us see future

prospects more clearly, make richer judgments and be more sensitive to uncertainties” (Shell, 2012).

The process of scenario planning involves some type of drivers/trends analysis and the subsequent

construction of narratives about possible future states (Shell, 2012).

The future of the resources sector was explored using the concepts of megatrends and scenarios (Figure

A2). Megatrends and scenarios are defined as:

• Megatrend: An important pattern of change in the social, economic, environmental, technological

and/or political context within which the mining services information technology industry operates.

• Scenario: A plausible description of the industry at a future point in time, in this study the year

2025 has been chosen.

Figure A2. Looking into the future with business drivers and scenarios

The concept of megatrends and scenarios are shown above using a “futures cone”. This is widely applied

within the field of foresight (Voros, 2003). The diameter of the cone at different time periods is inversely

proportional to the level of certainty. At the current time the diameter is zero and the cone’s circle is a

pinpoint. That is because if we can access the data we have complete certainty. However, as we move into

the future the circle’s diameter increases and certainty decreases. The scenario space, within which

possible future states can be defined, grows accordingly.

Megatrends occur gradually over time but have the potential to substantially reshape the business

environment over coming decades. The megatrends establish the context for the future information

technologies demanded by the minerals sector

As such, megatrends may be thought of as beams of light which illuminate parts of an unknown future

object. We describe that future object using scenarios. Because the future object is only partially

illuminated the scenarios are narratives about plausible futures.

Using this concept of the futures cone, multiple scenarios are possible (Davis, 2002). In many scenario

planning exercises, the outcome is a range of scenarios which represent alternative possible futures

depending on how the megatrends play out in reality. For this project however, we developed “normative”

scenarios for key aspects of the resources sector. A normative scenario is a single narrative of a component

of the future and provides a vision which can be worked towards through strategic planning and decision

making (Figure A3)

Megatrend B

Now The Year

2025

Scenario

Space


Figure A3. Types of scenarios

Source: Davis (2002)

A.3 Developing the scenarios - an analytic-deliberative approach

The megatrends provided pointers towards options for the future. They were used to guide the

development of ideas about specific opportunities for South Australia. These opportunities were then

developed into scenario descriptions through consultation with experts. This consultation combined

analysis of historical trends in ICT potential, mapping of the current business and research landscape in that

particular domain and deliberation on what could happen in the future. It is the combination that adds

weight to the outcomes because:

• Historical systems analysis provides information only about the past and assume that the future

will repeat the same pattern;

• Current situation assessments identifies the potential for evolution rather than the likelihood of

change; and

• Futures analysis needs to be organisationally useful for institutions that are functional in the

present.

Although trends (in technology evolution, consumer behaviour, market demands) are valuable for

identifying future opportunities, tempering those opportunities with instinct, experience and gut feel to

develop narratives that do not assume that a status quo will be maintained. This is where deliberation

comes into its own as it enables a range of stakeholder experiences and knowledge to be moulded into

narratives about the future. Therefore several interviews and a survey were undertaken through the

project to gather data from stakeholders in order to address the questions:

• What are the key drivers on the minerals and energy resource business, both now and further into

the future?

• What is the current capacity of ICT research providers in South Australia to support minerals and

energy resource expansion in South Australia?

• How do current ICT businesses in South Australia map onto the minerals and energy value chains?

The data from these studies was analysed to establish a range of scenarios, each capturing a viable

opportunity for South Australia.

78 | CSIRO

A.4 Describing and validating the opportunities

Each scenario developed was assessed by the project team against the following criteria:

• Its priority in terms of business needs;

• Its potential for impacting on South Australia; and

• The existence within South Australia of relevant and globally competitive capabilities.

A scenario description was developed which captured the challenge and opportunity encapsulated within

the scenario, a description of what it might look like and an indication of why South Australia might be able

to capture the opportunity.

These descriptions were then tested initially through discussions with CSIRO experts, and then through

validation workshops held in South Australia with members of industry, State Government and other

interested stakeholders.


Appendix B Current landscape of South Australian resources projects and

opportunities

Conventional Gas Projects in South Australia (Core Energy Group, 2012)

Conventional gas in South Australia is primarily found in two major basins – the Cooper and Otway Basins. In the Cooper Basin, the majority of gas production and resources relates to two joint ventures, operated by Santos. In the Otway Basin, there are three primary production fields which account for all existing booked resources and production capacity. All of these are located offshore:

• Otway Gas Project (also known as the Thylacine Geographe) – operated by Origin Energy • Casino (including Henry and Netherby) – operated by Santos • Minerva – operated by BHP

It is estimated that the Cooper Basin holds 1,861 PJ of contingent conventional gas resources, whilst the Otway holds 171 PJ.

Unconventional Gas Projects in South Australia (DMITRE, 2012)

The most advanced unconventional gas projects in South Australia are in the Cooper Basin – for shale gas, tight gas and deep coal seam gas. The main operators are Santos, Beach Energy and Senex Energy. The US Government’s Energy Information Agency estimates the shale gas play in the Cooper Basin could yield 85 tcf of shale gas. Santos estimates a potential range for its net recoverable raw gas from unconventional resources in its licences in the Cooper Basin to be between 15-125 tcf (raw gas). Other attractive areas in South Australia with unconventional gas plays include Arckaringa, Pedirka, Eromanga, Otway, Simpson, Officer and Gambier Basins. There are eight key projects running in South Australia at the present time:

1. Santos operated Cooper Basin JV Unconventional Gas project (Cooper Basin) – deep coal, shale gas and basin-centred gas targets 2. Beach Energy Nappamerri Trough Project (Cooper Basin) – shale gas and basin-centred gas targets 3. Senex Energy Unconventional Gas Project (Cooper Basin) – deep coal, shale gas and basin-centred gas projects 4. Strike Energy Southern Cooper Coal Seam Gas project (Cooper Basin) – deep and shallow coal seam gas and shale gas targets 5. Somerton Energy Otway Basin Project (Otway Basin) – shale gas and tight gas projects 6. Altona Energy and CNOOC Arckaringa Coal-to-Liquids and Power Project (Arckaringa Basin) 7. Sapex Ltd (Linc Energy Ltd) Walloway Basin Underground Coal Gasification Project (Walloway Basin) 8. Hybrid Energy (Strike Energy) Kingston Coal Project – synthesis gas as feedstock for products including fertilizer, methanol and synthetic transport fuel

There are also a number of unconventional gas plays being explored by more than twenty joint ventures in South Australian sedimentary basins indicating significant potential for greater development in the future:

1. Cooper Basin – shale gas, tight gas, deep and shallow coal seam gas 2. Arckaringa Basin – coal deposits, coal gasification, coal seam gas, shale oil and biogenic shale gas 3. Otway Basin – shale gas, shale oil, tight gas 4. Gambier Basin – coal gasification, 5. Pedirka Basin – coal seam gas, shale gas

80 | CSIRO

6. Simpson Basin – coal seam gas, shale gas 7. Warburton Basin – tight gas, shale gas 8. Officer Basin – tight gas

Oil projects in South Australia

The Cooper Basin is Australia’s largest and most mature onshore hydrocarbon province and has been at the centre of South Australia’s exploration and development for >50 years (Heithersay, 2013). Geoscience Australia (2012) estimates that the Cooper/Eromanga Basins have produced 2856 PJ of liquid hydrocarbon (crude oil, condensate and LPG) and have 370 PJ of remaining crude oil, 88 of remaining condensate and 125 of remaining LPG.

The Otway Basin contains both mature and immature conventional oil plays (as well as unconventional), with high potential for further discoveries. The onshore area is regarded as South Australia’s second most prosperous petroleum basin (Heithersay, 2013). Geoscience Australia (2012) estimate that the Otway Basin has produced 11 PJ of liquid hydrocarbon (crude oil, condensate and LPG) and has 82 PJ of condensate remaining.

The Bight Basin - large in size, similar to the Niger Delta, but significantly less explored. To date, most exploration drilling has focused on the margins of the Ceduna Sub-basin and the Duntroon Sub-basin. BP is currently undertaking a leading exploration prospect in this area (Heithersay, 2013).

Shale Oil Discovery in the Arckaringa Basin

Early 2013 Linc Energy announced the possible discovery of a major shale oil source in South Australia’s far north around Coober Pedy in the Arckaringa Basin, which officials estimate could be worth $20 trillion (ABC News, 2013). There are up to 233 billion barrels of oil estimated to be trapped in the shale – even at worst case scenario, there are at least 3.5 billion barrels in the absolute known areas

Uranium-related Projects

There are currently three operating uranium mines in South Australia (DRET, 2008):

• Olympic Dam (operated by BHP Billiton) - 0.26 k g/t of Uranium (U3O8), with an annual production in 2011-12 of 3, 885 t. • Beverley (operated by Heathgate Resources Ltd) – 7.7 Mt at 0.27% U3O8, with an annual production in 2011-12 of ~60 t and Beverley North – 2.2 Mt at

0.18% U3O8, with an annual production in 2011-12 of ~370 t • Honeymoon (operated by Uranium One inc) – 4.192 Mt at 0.109% U; 0.129% U3O8, with an annual production in 2011-12 of 76 t U3O8

Numerous expansions and new projects are set to come online in the medium-term, subject to economic cycles and favourable financial conditions. Additionally, proven resources have been listed in a number of areas including: Mt Gee – estimated mineral resources of 31.31 kt, 4 Mile West – estimated mineral resources of 15.00 kt, Crocker Well & Mt Victoria – estimated mineral resources of 6.74 kt). Geoscience Australia (2013) also lists a number of smaller deposits in South Australia including Warrior, Carrapateena, Blackbush, Crocker Well and Oban mines. According to this source, as at December 2011, South Australia held 78% of Australia’s total uranium resources – 1,361,300 tonnes.

Iron Ore projects in South Australia

South Australia’s iron ore deposits are held within two main regions: the Gawler Craton and the Curnoma Province and Adelaide Geosyncline (incorporating the Braemar Province). Operational mines exist within the Middleback Ranges, Cairn Hill and Peculiar Knob with a further two mines approved awaiting development. The major resources are Hematite and Magnetite.

Operating Mines Operator Commenced Production

Middleback Ranges Arrium Pre-1900 6 Mtpa


(multiple mines) (9Mtpa capability)

Iron Chieftain Arrium Included above

Cairn Hill IMX Resources 2010 1.8 Mtpa

Peculiar Knob Arrium 2012 3-4 Mtpa (projected)

Approved Mines Operator

Wilgerup Centrex Metals

Witchery Hill IronClad Mining

There are also a number of development projects and prospects in major South Australian Regions (DMITRE, 2013a):

• North Gawler Craton –

• One development project - Hawks Nest (operated by Arrium),

• Seven major prospective projects - Cairn Hill, Commonwealth Hill, Giffen Well, Mt Woods, Tarcoola Iron, Gawler Iron Project and Hicks Hill.

• South Gawler Craton –

• Four development projects – Central Eyre Iron Project (operated by Iron Road), Fusion (operated by Centrex Metals), Gum Flat (operated by Lincoln Minerals) and Hercules (operated by IronClad Mining)

• Five major prospective projects – Bungalow, Carrow, Greenpatch, Minbrie and Bald Hill & Charleton Gully

• Braemar –

• Four development projects (Maldorky (operated by Havilah Resources), Mutooroo (operated by Minotaur Exploration), Red Dragon Venture (operated by Royal Resources) and Lilydale (operated by Havilah Resources)

• One major prospective project – Grants

Copper Projects in South Australia

Major copper mines and resources in South Australia are (DMITRE, 2013b):

• Olympic Dam (operated by BHP Billiton) – 9576 Mt at 0.82% Cu, with an annual production in 2011-12 of 192,600 t Cu (cathode) • Prominent Hill [Malu – Open Cut] (operated by OZ Minerals Ltd – Malu (open pit): 44.1 Mt at 1.51% Cu; P.Hill Copper Resource: 214.Mt at 1.23% Cu;

P.Hill Gold Resource: 57.8 Mt at 0.07% Cu. Total annual production in 2011-12 of contained metal in concentrate was 106,722 t Cu • Prominent Hill [Ankata] (operated by OZ Minerals Ltd) – P.Hill total resource: 264.8 Mt at 0.99% Cu; P.Hill Copper Resource: 210.4 Mt at 1.22% Cu; P.Hill

Gold Resource: 24.4Mt at 0.08% Cu. Total annual production in 2012 of 101,737t Cu. • Kanmantoo (operated by Hillgrove Resources NL) – 32.8Mt at 0.08% Cu, with an annual production of 7,635t Cu.

According to BREE in their Resources and Energy Major Project Listing (Barber et al., 2012), there were three major Copper projects in the investment pipeline for South Australia as at October 2012, with the Olympic Dam expansion by far the largest:

82 | CSIRO

Project Company State Location Type Estimated Start Up

Pu

bli

cly

A

nn

ou

nced

Feasib

ilit

y

Sta

ge

Co

mm

itte

d

Co

mp

lete

d

Estimated New

Capacity Capacity

Unit Resource

Indicative Cost

Estimate $m

Hillside Rex Minerals

SA 81 km NW of Adelaide

New project

2015 y 70, 50000 kt, oz Copper, Gold

800

Kalkaroo Havilah Resources

SA 91 km WNW of Broken Hill

New project

2015 y 44, 90000 kt, oz Copper, Gold

447

Olympic Dam project

BHP Billiton

SA 560 km north of Adelaide

Expansion 2017 + y 570, 14.5, 700000

kt, kt, oz Copper, Gold

5000+


84 | CSIRO

Appendix C Acronyms for Research Institutes

Acronym

For institute / unit

Full name Home organisation

IMER Institute for Minerals and

Energy Resources

UA

IPAS Institute for Photonics &

Advanced Sensing

UA

TRC Teletraffic Research Centre UA

ACVT Australian Centre for Visual

Technologies

UA

DASI Defence and Systems Institute UniSA

ITMS School of Information

Technologies and

Mathematical Sciences

UniSA

ACRC Advanced Computing Research

Centre

UniSA

CIAM Centre for Industrial and

Applied Mathematics

UniSA

PBRC Phenomics and Bioinformatics

Research Centre

UniSA

ITR Institute for

Telecommunications Research

UniSA

The Wark Ian Wark Research Institute UniSA


CNST Centre for NanoScale Science

and Technology

Flinders

CSEM School of Computer Science,

Engineering and Mathematics

Flinders

MDRI Medical Device Research

Institute

Flinders

DSIC Defence Systems Innovation

Centre

Inter-university

DET CRC Deep Exploration Technologies

Cooperative Research Centre

Multiple partners

DSTO Defence Science and

Technology Organisation

86 | CSIRO

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FOR FURTHER INFORMATION

Minerals Down Under National Research Flagship

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t +61 7 3327 4180

e [email protected]

w www.csiro.au/mineralsdownunder

CSIRO Futures

James Deverell

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e [email protected]

w www.csiro.au/futures

CSIRO Futures

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e [email protected]

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Documents

1079 Csiro Report Final 20130716 Updated