New technologies in

underground mining:

Promises and reality

UG MINING IN AUSTRALIA

New technologies
in underground mining:
promises vs reality

In recent years, the mining industry has invested heavily in the development and implementation of new
underground technologies, including digitization and automation. Australian underground mines, in
particular, are at the leading edge of performance, especially in the areas of jumbo development advance
rates, long hole drilling, load-haul dumping and decline trucking.

This whitepaper examines several recent adaptations to mining systems and practices and includes detailed
productivity and cost analyses. The whitepaper focuses on the four key mechanized mining activities: jumbo
development, long-hole drilling, load-haul-dumping, and decline trucking, during the periods 2000–04 and 2015–
19. Set some 15 years apart, the two periods represent two very different generations of mining technology. In
general, it takes ten years for a new generation of mining equipment and technologies to become widely adopted
and effectively implemented. Hence, the time periods selected for this analysis provide comparison of the new
versus the recent past.

The data
The data used to prepare this whitepaper was extracted from AMC Consultant’s SmartData™ database, the largest
database of open-pit and underground hard-rock mine performance in the industry.

Only Australian underground hard-rock mines using long-hole open stoping mining methods with ore production
greater than half a million tonnes and less than five million tonnes of ore per annum were included. To provide a
meaningful comparison, narrow vein and high-capacity sublevel and block caving operations were excluded, as
were mines operating in particularly challenging environments, such as those with poor ground.

Several of the mines in the data set have been operating continuously since the early 2000s, while some have
now closed, and others have only recently achieved steady-state production. Mines with challenging operating
environments have been excluded from the data set.

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Jumbo development
Jumbo development productivity is a lead indicator of underground mine performance. The analysis shows that
jumbo advance rates increased by approximately 40% over the past two decades. This is despite heading sizes
having increased on average by more than 10%, which is primarily to accommodate larger materials handling
equipment. The increase in advance rates was primarily due to an average increase in metres advanced per
blast of 25% (the average round length increased from 3.1 to 3.9 metres) and an increase in penetration rate of
approximately 30%. The increased penetration rate is largely due to an increase in average rockdrill power, which
is typically 20 kW today, up from between 12 to 18 kW a decade ago. 20 kW is now standard for mines where the
jumbo is used to scale-bolt-mesh.

It is worth noting that jumbos equipped with higher rockdrill power are typically used for high-speed development
in good ground conditions where longer rounds are practical and dedicated ground support rigs are used.
Increased rockdrill power has resulted in faster and more accurate face drilling. However, there was no material
change in average mechanical availability or percussion utilization during the period analysed.

“The increased development productivity has also come at a cost with development ground support costs having
more than doubled. The primary reasons for this relate to increased ground support requirements for safety and
statutory reasons, as well as increased blast damage where hole deviation is an issue and smooth wall blasting
has not been effective” Andrew Hall, Director and Executive Lead, Advisory at AMC Consultants.

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Production drilling
Production drilling productivity increased by 20% on average over the period analysed. There was minimal change in
mechanical availability or percussion utilization over this time. The increased drilling productivity was largely driven by
increased penetration rates. This can be attributed to improved technology in drill bits, which enables more ground to
be broken per blow, and rockdrill power increasing from approximately 18 kW a decade ago to 25 kW now. The higher
rockdrill power enables faster and more accurate drilling with larger diameter holes, which increase drilling yield.
As with jumbo development, the key technological advancement with production drilling was greater rockdrill power
resulting in faster and more accurate drilling.

Materials handling
Materials handling productivity increases were primarily driven by the use of larger and more powerful equipment.
Average LHD bucket sizes increased by approximately 20% to match the average increase in truck capacities of
approximately 15%. Over the same period, LHD mechanical availability and utilization did not materially change;
but truck utilization and productivity, measured on a tonne-kilometre basis, did increase. The latter, however, can
be attributed to the increased depth and longer haulage distances of Australian underground mines. Average
truck mechanical availabilities have remained relatively constant. The measured mechanized materials handling
performance improvements can be mostly attributed to more widespread use of larger equipment.
“The utilization of mining equipment in underground mines is typically much lower than in open-pit mines, which
represents one of the greatest opportunities for increased performance in underground hard-rock mining".

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Mining labour productivity

Labour productivity, including full-time contractors, declined over the period analysed. While this is largely the result
of more employee-friendly work rosters, it also reflects the increase in the number of people required to support the
operation and maintenance of some new technologies.

Operating costs
To measure how underground mining operating costs have changed with time, costs were inflated using the average
consumer price index and expressed in 2019 Australian dollars. The analysis indicates that underground mining
operating costs in Australia increased by 30% over the period analysed, which equates to an annual cost escalation
of approximately $1.50 per tonne of ore after adjusting for inflation. Underground mining costs in Australia have
increased significantly faster than inflation despite improvements in technology. The increase in costs was, in the
main, driven by higher safety standards, widespread use of mining contractors, and mining at greater depths.

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Conclusion
There have been significant increases in productivity in Australian underground hard rock mines over the past two
decades, primarily due to technological advancements in more powerful drills and larger capacity LHDs and trucks.
While advancements in mining equipment power and capacity have improved productivity, other technologies, such
as automation and digitization, have not yet provided significant performance improvements, nor have they assisted in
lowering operating costs at most Australian underground hard-rock mines.

The analysis also shows that mechanical availabilities and equipment utilization did not materially change in any of the
key mining activities analysed (jumbo development, long-hole drilling, load-haul-dumping, and trucking) over the past
two decades. This was unexpected given the significant investment in digitization and automation, which, in theory,
should reduce operational delays through improved shift management and communication and better predictive
maintenance systems.

There are a number of reasons for this. Much of the autonomous technology is still some way from operational
readiness. These new technologies have also proven difficult to implement in the typically dynamic underground
mining environment. Furthermore, the capital investment needed to set up a fully automated mine is high. And given
the average remaining mine life of an Australian underground mine is approximately five years, retrofitting existing
mines with extensive levels of automation is unlikely. Consequently, automation will likely be confined to newer, large-
scale operations.

Moreover, new technologies are often seen as a silver bullet and a way of overcoming existing shortcomings.
But reality is often different. If existing technologies are not already being used effectively, it can prove difficult to
implement new and more sophisticated technologies. It is also important to be realistic in terms of the size of the
benefits and the investment in time and resources needed to realize them.

This observation supports the conclusion that information management and systems integration is not as advanced
and effective as it could be, and these are typically far from optimal. At present the reality is not living up to the
promise.

The greatest benefit in the use of automation and remote-control technology in underground mines, in the short-term,
will be to improve safety by removing operators from hazardous work areas and to reducing non-productive time by
enabling operation when the environment is unsafe. A good example is the use of surface remote loading technology,
which enables the operation of LHDs from surface, typically in the non-productive period between shifts while clearing
blast fumes. Nevertheless, while surface remote loading can significantly reduce downtime, loading rates are lower
and maintenance costs higher than manually operated LHDs.

Despite a lack of measurable success, there is no doubt that new technologies such as digitization and increased
automation and remote operation have led to improved safety and have the potential to significantly improve mine
performance by reducing non-productive time. These technologies are an essential part of the future of underground
hard rock mining both in Australia and abroad. However, to be successful, miners need to be smarter about selecting
the right technologies to implement for the given situation to ensure they make better use of new technologies and
derive a greater benefit from what is generally a significant investment.

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About AMC Consultants
AMC provides its clients with independent and impartial advice on the
suitability and optimisation of automation solutions. AMC draws on the
SmartData™ benchmarking system and experience from over 1,000
mines around the world when reviewing assumption made in automation
project appraisals. AMC will make a comprehensive assessment of all
possible equipment and mining options to identify the preferred strategic
position that is aligned to your business goals and risk profile.

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