Keeping the Weight Off: Miners’ Health

From exploration to production, the industry has been lazy and nonchalant about R&D for decades. As a result, the industry became fat, reaching its heaviest point sometime between 2009 and 2011. Unfortunately, it has taken near-death experiences to motivate miners to get back into shape (other weren't so lucky). Crash dieting, many have been able to lose 20% to 30% of their costs quickly, but keeping the weight off for good will require miners to make some lifestyle changes.

Eat more greens
Miners, your current business model looks malnourished (it's obvious to everyone else). Lately, you've invested less than 1% of revenues into R&D. Listen, I know times are tough, but do you really think you can live that way forever? I'm sorry, but this is the reason you haven't made any truly great discoveries lately. Look at your peers -- remember when oil invented 3D seismic? They have been increasing their odds of success ever since. Horizontal drilling -- what a game changer that was. Miners, it's time you stop living in the past and start embracing information technology. Continuing to starve your business will not lead toward innovations.

Exercise consistently, make it a habit
Don't do it for me, do it for yourself, do it for shareholders, and do it for the communities that are counting on you to create jobs. There's a company, it goes by Trimble Navigation (NASDAQ: TRMB  ) , and it can help make sure you stay on the right track. Trimble equips workers with the latest in mining technology. Collision avoidance systems, dangerous slope detection, and 24/7 fleet management. In the cloud, Trimble's 4D Lite web applications integrate directly with equipment onsite. Its software helps monitor and track everything. All the hard work and investment will start showing results quicker than you think. When these new routines are firmly in place, mine managers will be running a leaner, lower cost operation.

Visualize, plan for the future
Miners, geospatial intelligence combined with analytics is a rich information source you are not taking advantage of nearly enough. DigitalGlobe (NYSE: DGI  ) is a top notch supplier of high resolution earth imagery products and services. Its satellites, QuickBird, WorldView 1 & 2, and GeoEye, are watching over as we speak. Remember Sen. Rand Paul's filibuster? I know it was long, but at one point he discussed the possibility of looking down from space with enough clarity to see Americans reading Fool.com in their hot tub. Ok, so he didn't actually mention the Fool, but the technology is real, and it's likely that DigitalGlobe is the company he was referring to. GeoEye-1 (sponsored by Google) orbits Earth every 98 minutes; its job is to capture clear color imagery down to 50cm and 1m resolutions! Awesome stuff. Check out their image gallery

Miners, visualization tools can help you solve a wide variety of challenges (none of which involve a hot tub). Everything from exploration to infrastructure layout and planning can be done more efficiently, if you're willing to get help. Aerial images can be used on Environmental Impact Statements (EIS); your project can't move forward without approval. DigitalGlobe's satellites compete with other forms of imagery capture that are attached to helicopters and planes. Trimble's UX5 is a drone that acquires aerial data. Miners, with the visualization tools available there is no excuse for bad planning.

Borrow Brilliance
Anglo American
(NASDAQOTH: AAUKY  ) , the world's largest platinum miner and 85% owner of De Beers, spent R&D money to develop a Superconducting Quantum Interference Device (SQUID). Its MagSQUID magnetic gradiometer improves the sensitivity of exploration surveys. Mount it to the boom of a helicopter and start flying. MagSQUID quickly captures images over widespread areas; this is one example of aerial mapping that should be copied. But wait, that's not all: Anglo American's technical solutions team has also developed a WiFi drilling navigation system. Miners, make sure you look into these technologies if you haven't already.

Rio Tinto (NYSE: RIO  ) has invested over $300 million into driverless rail technology. It hauls iron ore across Western Australia's Pilbara region. I know, I know, not everyone has the same financial muscle, but you can work up to it. How about driverless trucks? Since 2009 Rio Tinto has moved over 100 million tonnes automatically. By 2014 it expects to have 40 operating at three mine sites within the Pilbara region. A portion of these trucks are running Caterpillar's autonomy system. Substituting technology for labor is not a new concept, but the mining world has been a little slower with catching on.

Final Thoughts
Business and life are about survival of the fittest. It's easy to fall behind and so difficult to catch back up. The mining industry has been behind on information technology for too long. If the industry is to become smarter and leaner in the future, Trimble Navigation and DigitalGlobe will likely receive a healthy portion of the uptick in R&D spending.

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