Has the Government Missed the Next Great Mining Boom?

Has the Government Missed the Next Great Mining Boom?

I was unlucky enough to be in Melbourne over the last two weeks. I say unlucky because I got the last two weeks of the election campaign.

Not so much a campaign as a desperate plea for votes.

It was unfascinating to watch. I was particularly unimpressed by both sides. Neither put forward real, positive, beneficial policies. They were both dismissive of the long term future of the country.

I was, however, impressed at their ability to slag each other off. If there was a competition for put downs, Aussie politicians would be the best in the world.

The Libs were full of rhetoric about how bad the Labor government would be. They were quick to slam the inadequacy of Bill Shorten. They were adamant a Labor government will lead the country down a dark hole.

Labor was equally as good.

They preached about how the Libs would privatise and destroy Medicare. They loved to point out that Turnbull was wealthy and disconnected from real people. And they certainly let us know how the Coalition will lead the country down a dark hole.

Now let me talk about all the positive policies they put forward.

Erm…umm…hmmm.

No mention of the boom that could really push the country forward

OK so not much comes to mind there. I’m sure they must have said something about something? Who knows, really? After eight weeks of campaigning everyone was sick of it all. But that’s politics right?

What’s most baffling is there was plenty of promise about innovation, investment in science and technology and an ‘ideas boom’ earlier in the year. This was not long after Turnbull ousted Abbott.

Did we hear about this great ‘ideas boom’ in the last two weeks of the federal election? I can’t remember it. And I was on annual leave, which meant watching a lot of TV. And I can’t recall one single thing about the ‘ideas boom’ from the Coalition. And definitely didn’t hear anything about innovation from Labor.

The sad part is both sides missed an incredible opportunity. An opportunity that could have swung the vote in their favour. Instead they berated and beat down on each other. And it seems they’ll all miss one of the biggest opportunities Australia has seen since we discovered China loves our dirt.

Ironically, the next great opportunity for Australia is another mining boom.

That’s right. The next great wave of Aussie prosperity might be another mining boom.

There’s just one thing about this mining boom though. There’s no actual mining…

The mine of the future started eight years ago

I have no doubt that the only way Australia will be globally competitive is if we become a high knowledge economy. That means not trying to compete on labour or manufacturing. It does mean competing with innovation, invention and intellectual property.

Australia doesn’t give itself enough credit for the skills we already have. The fact is we’ve got some of the smartest and brightest minds in Australia. Now we need to use them to create a prosperous country in the future.

This fact isn’t lost on some of Australia’s biggest mining companies. Aussie miners are world renowned for innovation, research and development of new tech.

Mining Weekly highlights that,

‘[Australia] would remain the biggest global driver of incorporating remote operating centres, automation, robotics , fibreoptic sensors and other innovative, high-tech developments into mining operations.’

Don’t forget Rio Tinto [ASX:RIO] launched their ‘Mine of the Future’ back in 2008. This includes the development of 69 self driving haulage trucks. It also includes automated drilling rigs. And then there’s AutoHaul® an autonomous long distance rail system.

BHP Billiton [ASX:BHP] has been using self driving trucks for years. And Fortescue [ASX:FMG] is also developing new automated systems.

But it’s not just self driving trucks of interest here.

The new mining boom is technology

Mining Weekly also goes on to explain,

Sixty per cent of mining software used globally was produced in Australia and the country’s mining equipment, technology and services sector had grown into a A$90-billion industry.’

BMI Research explains that most mining companies are hungry for new tech.

According to a survey report by IDC Energy Insights, more than 80.0% of 190 interviewed mining companies stated that their technology budgets will increase over the coming years. Of these, almost 70.0% are researching the possibility of opening remote operations and monitoring centres, while 56.0% are researching new methods of mining and 29.0% the use of robotics and unmanned drones.’

This plays into Australia’s hands. We’re already several steps ahead of the world when it comes to new mining tech.

Mining Weekly points out there are already over 100 exploration and mining software companies in Western Australia. This is a huge opportunity but no one can see it.

As you’re aware, commodity prices are weak. This has seen massive falls in mining stock prices. It means that, to be profitable, miners need to be sleek and streamlined. They have to increase efficiency and productivity.

It also means investment and research into new tech. Software, automation, sensors, remote operations cloud systems, data centres — it’s all relevant in a high tech mining world. The hardest thing to do is invest money in a downturn. But those that can do it to develop new tech will benefit long term.

Australia is in a wonderful position. We have the mining experience. We also have the knowledge and knowhow. We’re underway in the development of new mining tech. Harness this properly and the country could lead the world. We could be the land full of exciting mining tech companies.

All it needs is a little focus and guidance. With the right attention and support, it could kick off another mining boom. A mining technology boom.

Regards,
Sam

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Sam Volkering

Sam Volkering is Editor for Money Morning and its small-cap, cryptocurrency and technology expert. Find out what he has to say here with all his latest articles.

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