Tue, Feb 21, 2012 - Page 10 News List

Rio Tinto unveils automation plan


Global miner Rio Tinto has accelerated a move toward automation, unveiling a US$518 million plan to pioneer the use of driverless trains in Australia and increasing its bet on a future where machines rather than miners do most of the work.

The world’s No. 2 iron ore miner, which already has driverless trucks, plans to run fully automated trains across its 1,500km iron ore rail network in northwest Australia from 2014, to help boost output 60 percent by 2015.

The refitted trains will be operated like a space mission from a control room in Perth, 1,500km away, from where Rio now runs the driverless trucks.

“This is not just about job losses. That’s not what this is about. This is about us remaining competitive,” Greg Lilleyman, president of Rio Tinto’s Pilbara operations, said on Australia Broadcasting Corp radio after the announcement yesterday.

Rio says it wants to avoid forcing workers to toil beneath the scorching heat of the Pilbara, a desert region that ranks among the world’s richest iron ore precincts, but automation also enables it to overcome a shortage of skilled labor.

The shortage has been fueled by a record boom in mining and energy investment, with US$230 billion worth of projects underway or approved in Australia. Salaries have skyrocketed to the point where a truck driver can earn more than US$100,000 a year.

At least half of Rio Tinto’s 500 train drivers may lose their current jobs, with the rest to be used on about one-fifth of the network that will still need drivers. However, Rio says no one will be laid off as it aims to retrain workers for new roles.

Trade unions oppose automation, but their influence in the Pilbara has waned as Rio and other miners, such as BHP Billiton, have switched over the years to individual contracts or contract labor.

“The company’s objective of lowering labor costs is the wrong way forward,” said Gary Wood, Western Australia district secretary for the mining and energy arm of the Construction, Forestry, Mining and Energy Union.

He said hundreds of jobs were at stake.

“This decision that’s being made isn’t based on people. It’s based on shareholders and international shareholders at that,” he said.

Rio says it is still expanding its overall Pilbara workforce and will need thousands of new workers, on top of the 10,500 it already employs, to boost iron ore production to 353 million tonnes a year by 2015 up from 220 million tonnes now.

It will need more people to perform maintenance on trucks, trains and other heavy equipment, manage rail and port schedules, operate the control center and run trains around about one-fifth of its network.

By getting rid of drivers, Rio will no longer have to slot in times for driver changeovers, giving it more flexibility in scheduling trains and creating more capacity in the network.

“Automation will help us meet our expansion targets in a safe, more efficient and cost-effective way,” Rio Tinto iron ore chief Sam Walsh said in a statement.

The company did not say how much it would save by switching to driverless trains. It has no plans to roll out similar remote-controlled technology at other mines yet, spokeswoman Karen Halbert said.

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