'We Are At The Beginning Of The Beginning' - Wenco EVP On Mining Autonomy
Todayâ€™s incumbents in the mining supplier space may go the way of Nokia and Motorola if they donâ€™t adopt open systems, says Eric Winsborrow, executive vice president of corporate strategy at Wenco International Mining Systems.
Winsborrow spoke to Kitco News on Friday. Wenco is a wholly-owned subsidiary of Hitachi Machinery, a major mining supplier.
Winsborrow sees parallels to how the mining autonomy industry is playing out and past developments in mobile phone space. Companies with closed systems may suffer consequences.
â€śClosed was good in the past and so OEMâ€™s stick to what they know. The problem is the world's changing very quickly, and just like the mobile device industry in the past, you're going to see changes in the mining industry,â€ť said Winsborrow.
Hitachi introduced its open standard system at the CIM conference last month in Montreal.
Winsborrow sees opportunity.
â€śI really think we're at the beginning of the beginning even though autonomy has been talked about and experimented with, let's say two decades. I only know of about a dozen mine sites in the world that are using autonomy and autonomous knowledge to any great extent.
â€śBut I think that window is opening rapidly, and I think a lot of the industry was waiting and watching, and now there are plans for dozens and dozens more. So you're about to see that upwards tick and applying it not just in haulage of course but right across the value chain, and the decisions made over the next five years will determine the winners over the next 20 years.â€ť
Interview edited for clarity.
Kitco: What is the state of autonomous mining? Can you tell us about Wencoâ€™s autonomous systems announced at CIM?
Winsborrow: There is loads to talk about. What this announcement about isn't just about their autonomous vehicles which they now have in production in Australia. This is more about the platform that they're calling Solution Linkage, which actually is about enabling and championing other vendors to join. It's an open platform. It will be cloud-based. The purpose is to enable customers to adopt whatever autonomous technology they want and have that integrate into their existing infrastructure. The problem customers are facing is closed systems. We completely understand why companies would do that, but it's not necessarily in the best interests of the customer: they end up having to re-learn new systems. They have to give up old systems and relearn new ones. It's actually very costly and time-consuming for the customer. We're going to support open standards. Weâ€™re also going to have an open and interoperable platform that can plug in other autonomous systems and into the customer's infrastructure.
Kitco: Why do OEMâ€™s prefer closed standards?
Winsborrow: I've seen this across a lot of industries. A lot of times it's just the convenience and expediency of developing new technology. If you can control it and you close it, it's easier for the vendor. So I think that's reason number one reason. Reason number two might be strategic: they're trying to protect their market share. I mean they believe they have advanced technology and the last thing they want is to let someone else in. So they sort of close up shop and just keep it to themselves. But as you see in every industry, that's not a good strategy long-term. Let the customer integrate and have a choice. The whole point of autonomy is to save money.
Kitco: Do we have an example of how this has played out in other industries like aerospace or oil and gas?
Winsborrow: Look at an example of something that everyone touches: the smartphone industry. Letâ€™s look back 13 years earlier or so, and you had Nokia and you had Motorola. You don't see them much anymore. The two companies had the front seat. And now you have Apple and Android. So that's the trend. You have incumbents who are winning. They want to protect their lead. They're motivated to do so. Closed was good in the past and so they stick to what they know. The problem is the world's changing very quickly, and just like the mobile device you're going to see changes in the mining industry. The folks with closed systems who may have a lead today may not have that lead tomorrow.
Kitco: What is the state of the industry?
Winsborrow: I really think we're at the beginning of the beginning even though autonomy has been talked about and experimented with, let's say two decades. I only know of about a dozen mine sites in the world that are using autonomy and autonomous knowledge to any great extent. But I think that window is opening rapidly, and I think a lot of the industry was waiting and watching, and now there are plans for dozens and dozens more. So you're about to see that upward tick and applying it not just in haulage of course but right across the value chain, and the decisions made over the next five years will determine the winners over the next 20 years.
Kitco: Is there anything that particularly excites you looking at the industry right now?
Winsborrow: I would say if there were two tectonic shifts in the mining industry would be around data and around autonomous systems. In fact they're not unrelated. They probably co-exist because it's data-based decisions. So I think those two things will drive a great deal of change over the next decade, and there's been a lot of research where executives at mining companies across the world say that's the biggest change that will happen is technology. When you have human operators, you have to train them and there's a wide variance in how they perform. The best drivers or operators are harder and harder to come by. I think data and autonomy are going to really change the way business is done from a sort of a "ore push" to a "demand-pull."
Mining truck photos provided by Hitachi