CSIRO FUTURES

Scenarios for ICT in Minerals and Energy in 2025

Anna Littleboy, Hannah Cook, Stefan Hajkowicz, James Deverell, Stephen Giugni July 2013

Citation
Littleboy A, Cook H, Hajkowicz S, Deverell J and Giugni S. (2013). Scenarios for ICT in Minerals and Energy in 2025. CSIRO, Australia.

Copyright and disclaimer

2013 CSIRO To the extent permitted by law, all rights are reserved and no part of this publication covered by copyright may be reproduced or copied in any form or by any means except with the written permission of CSIRO.

Acknowledgements

Important disclaimer
CSIRO advises that the information contained in this publication comprises general statements based on scientific research. The reader is advised and needs to be aware that such information may be incomplete or unable to be used in any specific situation. No reliance or actions must therefore be made on that information without seeking prior expert professional, scientific and technical advice. To the extent permitted by law, CSIRO (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it.

Executive Summary

This report outlines a number of forward-looking scenarios for South Australia to play a larger role in building an ICT (Information and Communications Technology) industry to support the global minerals and energy sectors through 2025. These opportunities could help diversify the South Australian economy and provide a stable base for job creation, innovation, and economic growth in the future. Both the minerals and energy sectors1 play a large role in the Australian economy. The Australian mining boom of the past decade has seen incredible growth in the minerals sector, fuelled by rising overseas demand and high commodities prices. However, the recent softening in demand and decline in prices has led to an increased focus on the twin business drivers of increasing productivity and reducing costs in the industry. The Australian energy sector is poised to see continued growth through the development of unconventional coal seam gas and shale gas resources and the conversion to Liquefied Natural Gas (LNG) for export. However, recent development of shale gas in the United States has led to a decline in global energy prices, which is driving productivity and cost reductions in the oil and gas industry. The need to improve productivity and reduce costs has started to drive innovation in both minerals and energy. In addition, pressure to reduce environmental impact, improve worker health and safety, and the need to maintain a strong social license to operate continues to fuel new innovations in both sectors. These business drivers have created opportunities in the upstream industries that supply equipment, technology and services into the industry. As a result, a new wave of Australian growth could be fuelled by developing these industries through innovation and growth of skills, knowledge, and information. ICT is a key component of both the global Mining Equipment Technology and Services (METS) industry and the global oilfield services sector. The ICT industry is evolving rapidly in response to opportunities opened up through the ability to manage vast datasets, to connect sensors and sensor networks to control systems, to augment human operations with robotics and to communicate ubiquitously in real time. As a starting point for identifying future scenarios for ICT in the minerals and energy sectors, this report looks at both the current challenges (pain points) in each sector, as well as the global megatrends shaping the future of resources. The six megatrends identified describe some of the social, environmental, economic, and technological shifts that will affect the industry: The Innovation Imperative - productivity decline, high costs and low prices mean that mining and energy companies will need to innovate to remain competitive; From FIFO to LILO - changing labour markets, lifestyle patterns and skills requirements as operations move from fly-in fly-out to log-in log-out; Tell Me More rising demand for transparent, credible and comprehensive information regarding live sustainability performance information; Plugged In and Switched On increasing connectivity between people and devices in the online world is creating new functionality; The Knowledge Economy how and why an economy captures growth in knowledge services; and E=MC2 swapping energy for matter via recycling could turn business models on their head.

Throughout this report, minerals and mining are used interchangeably to refer to the extraction of mineral-based resources. Energy and oil and gas are used interchangeably to refer to the extraction of petroleum resources, including unconventional gas. The term resources is used to collectively describe both minerals and energy. Scenarios for ICT in Minerals and Energy in 2025 | i

Based on these trends and a broad survey of existing ICT technologies and research, this report identifies 11 scenarios six in minerals and five in energy for how South Australia could build a competitive advantage in ICT services using existing capabilities to establish a strong foothold by 2025: ICT in Minerals Scenarios Advanced Resource Modelling In 2025, South Australia plays a leading role in developing interoperability and plug-and-play capabilities across major METS vendors and SMEs in the minerals sector, which leads to new opportunities in innovation. Interoperability for Innovation In 2025, South Australia is a world leader in advanced resource modelling technologies allowing deeper and more difficult resources to be profitably mined, opening up a new wave of minerals exploration. Remote Operations Hub In 2025, South Australia hosts numerous global remote operations centres and is a world leader in the tools, skills and services required to build and maintain teleoperation centres. Intelligent Processing In 2025, South Australia plays a leading role in advancing the goal of a fully integrated intelligent processing plant that provides feedback into the common mine model and allows for adaptive operations. Human/Machine Interaction In 2025, South Australia is a world leader in developing technologies that allow human-controlled and autonomous machines to work safely together in a confined mine environment. Crowd-sourcing Regulation In 2025, South Australia leads the world in transparency of environmental data, which decreases the regulatory burden on the government and improves trust between industry and communities.

Energy Resource Opportunities Advanced Reservoir Simulation In 2025, South Australia is a world leader in advanced reservoir modelling using multiphysical predictive sub-surface models to characterise oil and gas fields at both micro- and macro-scales, opening up new exploration opportunities. Monitoring and Control In 2025, South Australia plays a leading role in the development of the monitoring and control systems that are at the centre of the intelligent field, including advanced sensors, autonomous monitoring, remote operations, and failsafe communications. Production Optimisation In 2025, South Australia is a world leader in ICT technologies for simulating and optimising production from unconventional gas fields including real-time measurement and adjustment of flow parameters and fluid mixes. Smart Information Platforms In 2025, South Australia plays a leading role in developing smart information platforms for supply chain management, personnel management and risk management. Environmental Monitoring In 2025, South Australia leads the world by working with industry to develop standards for the transparency of environmental data, which decreases the regulatory burden on the government and improves trust between industry and communities.

These scenarios are normative, meaning that they each provide an ideal vision which can be worked towards through strategic planning and decision making. They are also high-level and broad, with the intention of covering the entire value chain in both minerals and energy. The scenarios were presented to a range of South Australian stakeholders from industry, academia and government at a Validation workshop held in July. They acted as discussion starters for this audience and stimulated broad discussion about the role that ICT can play in enabling integration throughout the value chain for both minerals and energy. The potential of informatics and training and development of a workforce that is ready to operate in any or all of the scenarios were discussed at some length at these workshops.

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Contents
Executive Summary Contents 1 2 2.1 2.2 Introduction Information Technology and Value Creation i ii 1 3

Value chains and business drivers for minerals and energy resource development............................ 3 Models for creating value in South Australia ........................................................................................ 7 2.2.1 Developing South Australian Resources ..................................................................................... 7 2.2.2 Servicing South Australian operations ........................................................................................ 7 2.2.3 Exporting South Australian skills and services ............................................................................ 9 2.2.4 Concentrating South Australian skills and innovation ..............................................................10 Megatrends The global context for minerals and energy resources 12

3 3.1 3.2 3.3 3.4 3.5 3.6 4 4.1 4.2 5 5.1 5.2 5.3 5.4 5.5 5.6 6 6.1 6.2 6.3 6.4

The Innovation Imperative ..................................................................................................................13 From FIFO to LILO ................................................................................................................................17 Tell Me More .......................................................................................................................................20 Plugged in and Switched On................................................................................................................23 The Knowledge Economy ....................................................................................................................26 E=MC2 ..................................................................................................................................................31 Minerals and Energy in 2025 35

The integrated minerals value chain of 2025......................................................................................35 The integrated energy value chain of 2025 ........................................................................................38 ICT Scenarios for Mineral Resources 41

Advanced resource modelling.............................................................................................................43 Interoperability for Innovation ...........................................................................................................46 Remote operations hub ......................................................................................................................48 Intelligent processing ..........................................................................................................................51 Human/Machine Interaction...............................................................................................................53 Crowdsourcing regulation ...................................................................................................................55 ICT Scenarios for Energy Resources 57

Advanced reservoir simulation ...........................................................................................................59 Monitoring and control .......................................................................................................................61 Production optimisation .....................................................................................................................62 Smart information platforms ..............................................................................................................64

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6.5 7

Environmental monitoring ..................................................................................................................66 Conclusion 67 68

References A.1 A.2 A.3 A.4

Project Components............................................................................................................................75 Megatrends and Scenarios..................................................................................................................75 Developing the scenarios - an analytic-deliberative approach ...........................................................77 Describing and validating the opportunities .......................................................................................78

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1 Introduction

This report explores opportunities for South Australia to develop ICT capabilities to support both the minerals and energy resources sectors. Both mining and oil and gas operations are moving increasingly towards automation. Automated systems make use of sensory devices, robotics and advanced software algorithms to replicate tasks previously conducted by humans. The rise of automation is likely to see increased demand for highly skilled and technical jobs. The information technology industry will play a vital role in allowing resource sector companies realise the full benefits of automation. South Australia already has a strong information technology industry and a strong minerals and oil and gas industry. The State is well positioned to capitalise on this opportunity. The rise of automation in the resources sector has parallels to structural change in the manufacturing sector in the last century. The 20th Century saw major advances in robotics in manufacturing. This led to factory floors with fewer workers and production systems capable of vastly increased output with minimum waste and minimum overall production cost. For example, a modern car manufacturing factory, equipped with robotics, can produce one automobile every 16 seconds (Ward, 2013). In the 21st Century automation is moving out of the factory and into the real world. In the defence sector, automation is allowing driverless trucks to traverse dangerous battlefields with a capability to identify and navigate past obstacles. Pilotless drone aircraft are becoming more common for high risk reconnaissance missions. The transport sector is seeing the rise of automation in aviation, road and rail transit for improved safety and efficiency. In 2011 a BMW built robot successfully drove a vehicle a distance of 170km at motorway speeds from Munich to Nuremberg with a human driver on standby (The Economist, 2013). In the agricultural sector robots have been developed for picking fruit and pruning vines. They are demonstrating high levels of efficiency and effectiveness (Corbett-Davies et al., 2012). The resources sector is well placed to take advantage of automation and the information technology systems needed to make it work. The benefits include cost reduction, energy savings, efficient production, environmental performance and improved safety and well being of people. Already mining companies have invested billions into developing this new space. However, given the benefits, the uptake of automation and advanced information technology in operational mines has been surprisingly slow. At least up until now. Recent years have seen many oil and gas companies across the world focussed on developing fully automatic drilling systems which are fully independent of human workers. Robotic drilling systems are forecast by industry experts to become standard in the coming years (Sondervik, 2013). In the Pilbara iron ore region of Western Australia Rio Tinto has moved more than 42 million tonnes of material with a fleet of 150 autonomous (driverless) trucks controlled from a remote operations centre in Perth (Rio Tinto Australia, 2013). The next few decades will most likely see continued change. The recent downturn in global minerals and energy markets has created a new paradigm for the Australian mining sector. Companies cannot rely on high prices to compensate for costly or inefficient production processes. The profitable Australian mine of the coming decades will increasingly depend upon highly efficient exploration, extraction, processing and transportation of products. This is likely to see innovation in mine site automation and the rise of related integrated information technologies. Why does South Australia have an opportunity? Other companies and regions will be positioning themselves to take advantage of this emerging opportunity. South Australia meets key requirements to be in pole position. These include: An existing, strong and growing knowledge and innovation sector with institutes such as The University of South Australia, Adelaide University, Flinders University, the South Australian Research and Development Institute and CSIRO.

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The presence of a significant existing software and information technology industry with small and large companies being deployed into defence (especially through the Defence Sciences and Technology Organisation) and other industry sectors. A well established and advanced onshore and offshore mining sector attracting investment from around the world in commodities such as iron ore, zinc, lead, uranium, oil and gas. Comparatively lower living and operating costs to other major metropolitan centres and regions in Australia.

This report presents a narrative of the future. It develops high-level conceptual scenarios to demonstrate the opportunities for ICT to address the key business drivers in mining out to 2025. At the heart of the project lies the concept of scenario planning, informed by various sources of information and expertise. Separate scenarios have been developed for minerals and energy resources. Appendix A provides a more detailed description of the methodology used.

Section 2 establishes the manner in which the industry works to create economic value, the business drivers this creates and the potential for ICT to support this value creation. Section 3 describes a set of megatrends developed through evidence-based foresight. A megatrend is a significant shift in environmental, economic or social conditions that will play out over the coming decades. Section 4 then provides an overview of what the world might look like in 2025 given all these interacting aspects. Sections 5 and 6 explore the possible ICT-enabled scenarios for both minerals and energy resources in 2025. These scenarios can be used to further discussions with a wide range of stakeholders and support the notion of South Australia playing a major role in the global mining value chain in 2025. Specific minerals-related and energy-related opportunities that see South Australia positioned as the minerals and energy resources services centre of Australia. They describe a possible role that South Australia could play in the global value chain.

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2 Information Technology and Value Creation

2.1 Value chains and business drivers for minerals and energy resource development
Australian resources have long been a critical driver of economic development and value creation for Australia. However, the process of value creation is far more complex than simply having access to the resources. Resources in the ground have little economic value unless they can be taken through a chain of transformations by: Discovering and locating them spatially through exploration; Extracting them from the ground and separating them efficiently from waste materials; and Processing them into a value-added useable form and transporting them to market.

Moreover, the economic value of a resource can only be assessed against the costs of undertaking these transformations whether these costs are a function of the ease of transformation, the use of resources such as energy and water in effecting the transformation, generation of waste materials (gas, liquids or solids) or managing the legacy of the operation. At a superficial level, the processes of creating value from minerals and energy resources are similar they both rely on exploration, extraction, some level of processing and then transportation to deliver a valuable product from operations. They both need to manage the social and environmental impacts of their operations and both have to comply with various tiers of formal regulation and governance. Many companies in both the minerals and energy resource sectors also choose to comply with voluntary reporting schemes such as the Global Reporting Index. Both sectors are driven by similar factors including productivity, cost reduction, health and safety, management of capital and continuous flow of product to market. Both utilise technology and innovation to achieve these goals and both have increasing technical difficulties to overcome as operations go deeper and new unconventional or complex resources come on line. The pattern of expenditure has similarities with major costs incurred through the establishment of infrastructure, be it well sites for petroleum or gas production or site construction around a new mine or processing plant. As an indication, for petroleum developments, a large proportion of total project costs are incurred during the well site establishment phase (Figure 1) (Productivity Commission, 2009). Wells and surface facilities account for the largest cost share in oil and gas production (IEA ETSAP, 2010). These costs are influenced by the quality of information obtained during the exploration (and appraisal) phase, whereby costs can increase if inadequate or insufficient information has resulted in a poorly designed production systems (Productivity Commission, 2009).

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Production and Development: Other, 3%

Exploration: Exploration: Geological , 1% Seismic, 5%

Exploration: Other, 1%

Exploration: Drilling, 12%

Production and Development: Building and operating production facilities, 61%

Development: Drilling, 18%

Figure 1. Breakdown of total upstream petroleum expenditure in Australia, 2005 Source: Geoscience Australia (2008)

Both sectors face significant challenges in operating in more hostile or difficult environments (deeper waters, deeper mines, more complex mixtures, greater scrutiny on performance) and impact all areas where the ICT sector has the opportunity to provide control and sensor systems to optimise operations and improve efficiencies. However, despite their similarities, the technologies that the two sectors use are markedly different and the manner in which supply chains work together at each stage of the process varies. Approvals processes are almost entirely separate and reflect strikingly different language and culture differences between the sectors. As a result, the innovation ecosystems are very different between the two sectors and the manner in which ICT services can add value is different. The relative importance of business drivers around health and safety, environment and social impact are different, primarily reflecting the differing history of operations for the two sectors with one having its origins primarily through onshore operations and large excavations (minerals) and the other with a balance of onshore and offshore operations through drilling (oil and gas). Given these differences, two discrete value chains were developed separately for the minerals sector and for oil and gas, onto which were mapped the key business drivers developed during the project. Figure 2 and Figure 3 illustrate these mappings and have been used to identify the key opportunity areas for ICT in the resources sector. These operations revolve around the use of ICT to: Store manage and analyse large volumes of data very quickly (cloud computing, big data, pattern analysis, statistical inference); Communicate rapidly and seamlessly between multiple devices all performing complex tasks (automation, sensing and sensor networks, interoperability, internet of things, artificial intelligence); Control complex operations remotely but with sufficient responsiveness to adapt in real time to new data (automation, remote teleoperation, haptics, immersive visualisation, smart information platforms); Manage supply chains and logistics to minimise redundancies while maximising efficiency (smart information systems, project management, adaptive simulation); and Deliver credible and transparent data cleanly to multiple stakeholder groups as an indicator of effective environmental and social performance (sensing and sensor networks, social networking).

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Figure 2. Minerals business model - summary of key pain points

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Figure 3. Energy resources business model - summary of key pain points

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2.2 Models for creating value in South Australia

For any jurisdiction, there are number of ways in which economic value can be derived from the business of minerals and energy resource development. These include: The presence of a resource in the State or on the property can generate economic activity attracting investment into the locality; The existence of a resource company operating in the locality can stimulate economic activity for those supplying the operation; Skills and innovation developed as a result of experience on a resource operation can be exported to other operations around the globe generating export revenue; and The concentration of skills and experience that occurs in and around a resources operation can stimulate a focus on maintaining productivity and competitiveness through innovation. DEVELOPING SOUTH AUSTRALIAN RESOURCES

2.2.1

South Australia has a strongly expressed confidence in the development of oil and gas resources located within the state. For further details, Appendix B summarises the current landscape of potential operations in terms of oil, gas (conventional and unconventional), copper, uranium and iron ore. Any technology that enables South Australia to find its resources and then convince the market that those resources are worth investment will assist with South Australias economic development. There is a strong niche here for the use and application of ICT technologies through the management and delivery of precompetitive datasets on the quality and location of South Australias known resources and unknown potential. Precompetitive datasets contain information which does not, in their current form, provide the holder with any commercial advantage over rival companies. However, if analysed and interpreted these data may create a competitive advantage. 2.2.2 SERVICING SOUTH AUSTRALIAN OPERATIONS

Australian resource operations lie at the heart of a complex supply chain (Figure 4). Recent work (ScottKemmis, 2013) has provided a comprehensive description of a dynamic minerals innovation complex which shows that the economic opportunities arising from Australian resources are not just about the provision of oil and gas or minerals commodities, but are also about the know-how and skills required to deliver them.

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Figure 4. The supply chain for Australian resource sector companies

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Companies operating in both the minerals and the oil and gas sectors are diverse, ranging from large contract operators, original equipment manufacturers, engineering and construction companies to small specialist consulting or technology firms. Suppliers in both sectors are strong R&D performers and many firms collaborate with other firms and with research organisations for innovation. The mining equipment and technology services sector (METS) exemplifies this complex ecosystem of suppliers. With sales exceeding $71 billion in 2012 and total employment estimated at around 265,000 people, the rise of the METS sector has multiplied and diversified the benefits Australia derives from its natural resource endowment. Export revenues from the sector substantially exceed those of the wine industry and, on some measures, the automotive industry. Surveys indicate that Australias METS sector has grown roughly five-fold over the past 15 years so that today there are well over 270 firms, many leaders in their niche. Driven by the expansion of mining investment and production both within and outside Australia, the sector has achieved a remarkable level of internationalisation, with the majority of firms having offshore offices or subsidiaries (Scott-Kemmis, 2013; Tedesco et al., 2010). Although the resources sector has traditionally not been heavily reliant on inputs from ICT, this is expected to change (Ditton et al., 2012). In 2011, ICT spending in the resources sector accounts was $2.51 billion (6 percent of Australian ICT spending) and is forecast to grow at 3.8 percent (CAGR) to 2015 (Ditton et al., 2012). This growth in resources ICT is expected to centre on productivity improvements, organisational responsiveness and support and maintaining a low cost base. IT forms the basis for innovation in data acquisition, modelling of ore bodies, mine sites and production operations. New sensing and communication technologies support improved safety and productivity and enable greater automation and remote control. The greater use of IT also changes the relationships within mining projects: between the stages from exploration to closure; between those on site and those in remote monitoring and control centres; between mining companies and their various suppliers; and between suppliers. 2.2.3 EXPORTING SOUTH AUSTRALIAN SKILLS AND SERVICES

ABARE-BRS (Tedesco et al., 2010) define the technology and services sector to the resource industry as comprising of: ...establishments that supply goods and services that embody specialist technology, innovation, intellectual property or knowledge specific to the minerals industry. This technology is defined to include the introduction or implementation of a new or significantly improved good, service or operational process. Currently, the sale of services from Australian suppliers to Australian operations exceeds sales export sales revenue. In 2008-09, global sales revenue for the Australian METS sector estimated at $6.2 billion for Australia sales, while export sales revenue was $2.5 billion. South Australias share of this revenue was $591 million, primarily from provision of Contract Services ($278 million) and Equipment and Machinery ($216 million) into copper, lead and zinc ($191 million); gold ($120 million) and iron ore ($100 million). One of the contributing factors to the lower export sales is that, for both the minerals and the oil and gas sectors, the emergence of service providers has been to address challenges faced by Australian companies. While some firms in the sector have been in existence for more than 100 years, others are recent entrepreneurial ventures. The services landscape is diversified. Most services firms were formed by entrepreneurs with engineering or technical training and prior experience in mining or mining-related industries. Spin-offs from research organisations constitute a small proportion. Many firms, including relatively small firms, are internationalising rapidly through exports and the opening of offshore offices. Some firms are transforming their strategies, structures and organisational arrangements to support future growth. At the same time, difficulties in attracting capital and shortages of skilled personnel, including engineers, managers, IT and marketing professionals, pose impediments to growth. A survey of ICT companies operating in South Australia was undertaken as part of this initiative. This survey was sponsored by the AIIA and undertaken by Deloitte. In general, South Australia has ICT companies with capabilities to operate across the value chain and already applied in both the minerals and the oil and gas sectors. The deeper application and integration of this ICT capability to enable interoperability within this diverse landscape of suppliers would open up international opportunities for equipment maintenance and
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support to some of the large original equipment suppliers and manufacturers and the major operators such as Schlumberger. 2.2.4 CONCENTRATING SOUTH AUSTRALIAN SKILLS AND INNOVATION

A strong science and ICT capability base and minerals and energy domain knowledge exist in the university community in South Australia. The Ian Wark Institute in the University of South Australia led an activity to ascertain the ICT research capabilities held within South Australian universities. From late January until May 2013, over 20 university executives and leading scientists at the three South Australian universities and a number of other important capability holders (particularly in the defence domain) were interviewed. The study identified a broad range of strong relevant ICT capabilities, some of which, with a few minor exceptions are not presently employed in the mining and energy space including: sensors and sensor networks; autonomous vehicles, robotics; management systems such as logistics, engineering/design, decision support systems; big data (unstructured data, analysis of multiple large data sets, etc); and augmented reality, image processing / analysis. ICT research and development relevant for the Minerals and Energy domain in South Australia is represented by an estimated 250 academics and 250 postgraduate students. Almost 300 staff and 150 post-graduate students are working in the Minerals and Energy domain and closely related fields. In those university institutes dealing with mining sector research in South Australia, such as the Institute for Mineral and Energy Resources (IMER) and The Ian Wark Research Institute, there exist a number of fairly advanced ideas about innovations that can be brought to the sector through the application of ICT. Examples presented include ore sorting, advanced heap leaching and the use of big data to unravel key factors driving the performance of process steps and entire operations. The study found that relevant capabilities at the three universities are generally concentrated in a limited number of organisational units (Table 1). Although these represent strong ICT capabilities, coordination between the relevant activities and interaction with the minerals and energy industry is weak. A key outcome was the observations that none of the ICT groups consulted had key initiatives underway specifically for the mining sector. Defence (followed at a distance by health and manufacturing) seemed to be the present focal areas. The main minerals sector domain knowledge exists at University of Adelaide at the IMER and University of South Australia at The Ian Wark Institute. However, this research is not yet integrated with the capabilities in ICT. Historically, there seems to be a significantly stronger emphasis on minerals than on energy in South Australian universities. Clearly there is an implication here that South Australia has a lot of potential for innovation at the intersection of ICT and the resources sectors. Innovation can be defined as ideas successfully applied (Dodgson et al., 2010). These innovations can be new to the organisation, new to the sector or new to the world. The Australian innovation ecosystem has been reviewed recently by a range of institutions and organisations. Notably, this includes the Cutler Review (Cutler, 2008) and several points are made about conditions for effective innovation. Science and research capabilities are necessary and important for competitiveness and innovation, but are not the whole story. Linkages, partnerships and knowledge transfer are similarly critical. These partnerships refer both to links between industry and the university sector and to links between technology domains which often emerge from the university sector. But for the links to happen there needs to be awareness of opportunity. For the ICT sector to pervade the resources industry at the point of innovation, researchers and suppliers need to have access to not only knowledge (i.e. scientific expertise), but also people and organisational knowledge about potential innovations, that is, know how, know who and know where.

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Table 1. Institutional homes of ICT capabilities relevant for the minerals and energy capabilities at South Australia's universities

University U Adelaide

Institute IMER IPAS TRC ACTV

Key contact Prof Stephen Grano Prof Tanya Monro Dr Bruce Northcote Prof Anton van den Hengel

Relevant ICT Capability Minerals and Energy application knowledge Optical sensing Networking/communications Risk management Image processing Image analysis Robotics Robotics IT Systems engineering Image processing Modelling and scheduling Artificial intelligence Augmented reality Satellite and terrestrial communications Vehicle-to-vehicle communication Sensor network algorithms Mineral Processing application knowledge Systems approach Nano devices Autonomous vehicles Data mining Civil engineering for resources industry Remote sensing Simulation science Signal and image analysis Application in System of systems Systems modelling Information superiority (data mining) Entity recognition Application of ICT to deep drilling and exploration geology Cyber Surveillance and Space systems Autonomous systems Information systems Operations analysis

UniSA

DASI School of ITMS

Prof Anthony Finn Prof Andy Koronios

ITR

Prof Alex Grant

Wark

Prof Magnus Nyden

Flinders

CNST School of CSEM

Prof David Lewis Prof John Roddick

MDRI

Prof Karen Reynolds

InterUniversity

DSIC

Dr Sanjay Mazumdar

DET CRC DSTO Dr Warren Harch

Note: For full names of Institutes, see Appendix C.

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3 Megatrends The global context for minerals and energy resources

In this study six megatrends are identified. These megatrends create the social, economic, environmental, technological and political context for the 2025 minerals and energy scenarios. They describe the demand and supply side forces that will reshape the information technology services industry which supports the energy and minerals resources sectors. The megatrends identify both opportunities and challenges.

The Innovation Imperative

Productivity decline, high costs and lower prices mean only the most innovative resource projects in Australia will succeed.

E=mc2
Mass energy equivalence turned physics on its head. Swapping matter for energy via recycling could similarly revolutionize business models.

From FIFO to LILO

Changing labour markets, lifestyle patterns and skills requirements in the resources sector as it moves from fly in fly out to log in log off.

The Knowledge Economy

How and why South Australias economy may increasingly sell know-how to the minerals and energy sectors.

Tell Me More
Rising demand for transparent, credible, comprehensive and live sustainability performance information.

Plugged In and Switched On

Increased connectivity between people and devices in the online world is creating new functionality.

The time frame for the megatrends covers the period from today (2013) to the year 2025. However, aspects of the megatrends are already occurring and they will continue to have impact beyond the year 2025. In this Venn diagram there are 57 unique overlap areas. One of these overlap-areas captures all six megatrends. A highly resilient organisational strategy falls within this space. It responds to a diverse set of identified plausible opportunities and risks.

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3.1 The Innovation Imperative

This megatrend explores and describes a paradigmatic shift in Australias and the worlds resources industry. As commodity prices fall resources companies are turning their attention to the efficiency of their operations. The focus is on cutting costs to ensure profitability. To achieve significant cost reductions whilst increasing production, environmental and social performance requires innovation. Mine operations in Australia will need to innovate to become efficient or they will look offshore into developing regions where lower costs may at some point offset higher geopolitical risk. South Australias commodity exports. The ten year period from 2003 to 2012 saw remarkably strong growth in global minerals commodities markets not experienced for the previous half-century. However, the price growth has been accompanied by extreme volatility. Since 2012 prices for major mineral and energy commodity exports from South Australia have taken a downward turn (Figure 5, Figure 6, Figure 7, Figure 8). It is unlikely that prices for copper, lead and iron ore in the coming decade will be as high as they were over the proceeding decade. This matters for the South Australian economy because these three commodities represent 26 percent of the States exports which equals A$3,448 million export income per year (DFAT, 2013) (Figure 9).
12,000 Copper price (USD/mt) 10,000 8,000 6,000 4,000 2,000 0 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Figure 5. World copper price Source: World Bank (2013)

2.5 Iron ore price (USD/dmtu fe) 2 1.5 1 0.5 0 1960

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Figure 6. World iron ore price Source: World Bank (2013)

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4 Lead price (USD/kg) 3 2 1 0 1960

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Figure 7. World lead price Source: World Bank (2013) 150 Oil price (USD/barrel)

100

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Figure 8. World average oil price Note: Average of West Texas Intermediate, Dubai and Brent Crude Oil Prices. Source: World Bank (2013).

18% Copper 8% 4% 70% Iron ore Lead Everything else

Figure 9. South Australia's exports Source: Department of Foreign Affairs and Trade (DFAT, 2013)

Lower prices call for innovation. Lower prices mean that resources companies will be focused on costcutting to maintain profitability. The challenge is that Australia and South Australia remain high cost locations for resource development activities on the global scale. Resources companies may explore the possibility of operating in resource rich developing countries where labour, energy, water and capital costs are substantially lower. However, developing countries typically hold much higher sovereign risk. Therefore, the coming decade will most likely see a major innovation drive within Australias resources sector aiming to reduce costs to retain profit margins. The era of high prices, which are more forgiving of inefficient production processes, is ending. Competitiveness and profitability will depend on cost reductions. Cost reduction will depend on innovation.
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Declining productivity. Productivity may be defined as the ratio of inputs into an industry to outputs over time. The Australian resources sector is experiencing a prolonged period of productivity decline. Companies, industry and government will be seeking ways via which this productivity decline can be arrested and reversed. Ultimately this will require efficiency gains in the minerals and energy production processes. The Australian Government Bureau of Resources and Energy Economics investigated declining productivity in the resources sector and identified these causes (BREE, 2013):

Deeper natural resources; Low yielding resources; Old and inadequate infrastructure (technology upgrades havent happened); Mismatch of labour and capital; Lumpy nature of investment; Commodity price volatility; and Mining industry in particular is about 10 years behind manufacturing in adoption of lean and other productivity enhancing methods.

The decline in productivity will push governments and companies in the direction of innovation to achieve greater efficiency. If the productivity battle is lost in Australia resources companies may move offshore where production costs are lower. Information technology will be a vital part of the innovative solutions which reverse the declining productivity trend.
250 Labour productivity index (GVA per hour worked) Index (2010-11 = 100) 200 150 100 50 0 1989-90 Capital productivity GVA based MFP index

1994-95

1999-00

2004-05

2009-10

Figure 10. Productivity growth and decline in the Australian resources sector Source: Australian Bureau of Statistics (ABS, 2012a)

Innovation is key to productivity gains in the oil and gas sector. A recent study by the University of Queensland Business School and Ernst and Young (EY and UQ, 2013) collected data on over 300 variables impacting the productivity of 80 Australian oil and gas sector companies. They found innovation to be the most single important driver of productivity. One major company-wide innovation in the past three years was found to increase the chances of a productivity gain by 40 times. Examples of innovations being used in the oil and gas sector included:

Offering seed capital to develop the ideas of employees for more efficient production processes Operating an innovation hub where staff upload their ideas for the whole organisation to access, replicate and extend.

Digging and drilling deeper. The final aspect of the innovation imperative identified here is that mineral and energy resources are becoming much harder to access and extract. Resources companies need to drill
Scenarios for ICT in Minerals and Energy in 2025 | 15

and dig deeper. This requires new and innovative systems to ensure health and safety of workers, environmental performance standards and cost effectiveness. The trend is well illustrated by the offshore oil drilling industry. Over the period 2000 to 2010 the average water depth of oil drilling platforms worldwide has increased from around 1km to 3km (Muehlenbachs et al., 2013). In Australia the operating depths for exploratory oil and gas platform developments have also increased (Figure 11). In the resources sector the depth of over-burden is also increasing over time. For example, the minimum overburden for Australian open cut black coal mines increased from around 200 cubic megametres (Mm3) in 1965 to around 1,800 Mm3 by 2006 (Mudd, 2010). Increased depth increases the technical complexity of the operation and heightens the probability of a reportable environmental or safety incident. One study estimates that for each additional 100 feet (30m) of drilling depth the probability of a reportable incident increases by 8.5 percent (Muehlenbachs et al., 2013).
Yodel 1, Woodside (1990) 0 Total depth below platform (km) -1 -2 -3 -4 -5 -6 -7 -6.5 -6.6 -3.2 -3.7 -4.4 -4.5 -4.9 Cossack 2, West Dixon 1, Woodside Woodside (1991) (1993) Gorgon 3, WAPET (1998) Egret 3, North Alkimos Bambra 8H, Woodside 2H, Apache Apache (2003) (2005) (2007)

Figure 11. Exploratory drilling depths over time for deepwater offshore oil and gas platforms in Australia Source: Australian Petroleum Production and Exploration Association, Offshore Appraisal Drilling Statistics (APPEA, 2012)

Implications for the ICT sector in South Australia:

The drive to cut costs will intensify. Information technology can improve the efficiency of production. South Australia is well positioned to supply innovative products. Safety will continue to be an overriding concern in the oil and gas sector and the mining sector. Modern information technology can provide systems that allow companies to dig and drill deeper within an acceptable safety envelope. Innovations in information technology developed in South Australia could be exported to other countries where the imperative is equally as strong.

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3.2 From FIFO to LILO

This megatrend explores how the resources sector workforce will shift from fly in fly out (FIFO) to log in log off (LILO) as mine site equipment is increasingly automated. Given the size of employment in the resources sector in South Australia and Australia, it will significantly impact the labour market. It will change peoples lifestyle patterns, settlement patterns and introduce a requirement for new and more technical skills.

Growth in the resources sector workforce. The resources sector in South Australia and Australia has seen substantial growth in employment over the past ten years. Today some 12,700 people in South Australia are employed in minerals and energy extractive industries (Figure 12). These jobs create additional jobs in the services sector of the South Australian economy. In Australia 263,000 people are employed in resources sector jobs.
16 Labour force (thousands) 14 12 10 8 6 4 2 0 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Figure 12. Full time employment in the mining sector in South Australia Source: Australian Bureau of Statistics (ABS, 2013b)

Growth in FIFO labour models. A large component of the resource sector labour force works on a FIFO basis. These people live some distance from the mine site where they work. They commute to the mine site by aircraft and work on a roster-on and roster-off schedule. They may be away from home for days, weeks or months. The high costs of providing accommodation in remote areas plus the lack of services (e.g. healthcare, education) make FIFO a common practice. For example, the mining town of Roxby Downs in South Australia has a highly transient population. For the 2001 census 7 percent of the people in Roxby Downs were visitors (i.e. not at home on census night) which is just above the national average of 6 percent. By the 2011 census this grew 25 percent which is well above the national average (ABS, 2013a). The growth was largely due to the increased FIFO worker population. Many other remote Australian mining towns show a similar pattern such as: Middlemount, Dysart, Newman and Moranbah (ABS, 2013a).
50% 41% Percent of population visiting 40% 30% 20% 10% 10% 0% Middlemount, Qld Dysart, Qld Roxby Downs, SA Moranbah, Qld 7% 7% 7% 35% 25% 23% 2001 2011

Figure 13. Population visiting on census night in selected mining towns Source: Australian Bureau of Statistics (ABS, 2013a)

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The FIFO model has also been used for offshore oil and gas rigs in Australia since the late 1940s. The offshore resource sector directly employs some 52,000 people in Australia. The model involves a fixed number of days on the oil rig followed by a fixed number of days at home (Carter et al., 2009). Social impacts of FIFO. The FIFO phenomenon has been heavily studied with researchers identifying community and family impacts. Some recent studies have linked FIFO to (a) strain on marriages and family instability (Torkington et al., 2011); and (b) drug abuse, alcoholism and crime in mining towns (Carrington, 2011). However, research has also found that many FIFO workers and families develop effective coping strategies (Kaczmarek et al., 2008). Overall FIFO is generally considered to present more challenges to families and communities compared to models where people work at locations close to where they reside. The FIFO model is a necessity emerging from the lack of accommodation and services in remote Australian mining towns. Impact of automation on FIFO. A trend likely to impact FIFO models in the mining sector is the rise of automation and remote controlled operations. Studies are showing that automated mining systems can greatly reduce overall costs of mining operations with productivity increases of 25 percent (Bellamy et al., 2011). As the technology improves the use of automated systems is likely to grow rapidly given the cost cutting imperative. The consequence of automated mining is a significant decrease in the mine site workforce as people are replaced with robotics and automated systems. For example, recent analysis of mine site automation finds that:

The Mt. Keith mine site has a traditional trucking workforce of 268. With automation only 66 employees needed to operate the trucks which represents 75 percent decline in the workforce (Bellamy et al., 2011). The Mount Newman mine site mining-machine operators would fall from 468 to 117 employees. The spill over impact would reduce overall employment in Newman by 535 persons which equates to 20 percent of the labour market (Bellamy et al., 2011).

Mine site automation can be expected to reduce the requirement for FIFO. Remotely located control rooms in capital cities such as Adelaide will allow more mining sector workers to commute daily to work. We are likely to see a switch from FIFO to LILO. This will have implications for labour markets and lifestyle patterns of people working in the mining sector. Automated oil and gas drilling rigs. The last decade has seen major advances in automated drilling systems. These systems have the potential to deliver major improvements in environmental and occupational safety in addition to reducing production costs. In the past 5 to 6 years many oil and gas companies have been focused on developing fully automatic systems which are fully independent of human workers. Robotic systems are forecast by industry experts to become standard all over the world in the coming years (Sondervik, 2013). They will have the impact of reducing to a minimum the staff required to be present on a drilling rig. LILO means changes in skill sets demanded. Technology advances within an industry typically translate to increased demand for highly skilled jobs and decreased demand for low skilled jobs. A study of the Swedish manufacturing sector over 35 years during 1965 to 1999 finds an acceleration in demand for skilled jobs as companies intensified research and development activities (Hansson, 2000). In the United Kingdom a similar pattern is revealed. A study examining the combined impact of technology advances and trade on labour markets finds that during the period 1979 to 1990 high skilled jobs experienced 29 percent growth and low skilled jobs experienced 15 percent contraction (Gregory et al., 2001). The total change in employment was growth of 3.5 percent indicating that overall the economy benefited from technology advances and trade. Isolating the technology component results in high skilled employment growth of 4.6 percent and contraction of low skilled jobs by 27.1 percent. The shift into high skilled jobs is repeated across countries of the Organisation for Economic Cooperation and Development (OECD) in line with technology advances. The South Australian economy is likely to experienced continued growth in technology advances and trade over the coming decades. Automation in the resources sector will boost demand for high skilled jobs and will place pressure on low skilled jobs. Whilst the overall effect on employment and economic growth of
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technology advances is positive there is a challenging transition phase. A smooth transition is largely dependent on effective training and skills development models.
40% 30% Percent change 20% 10% 0.1% 0% -10% -20% High skill Intermediate skill -14.9% Low skill 3.5% 28.8%

Total change

Figure 14. Changes in employment in the United Kingdom resulting from technology advances and trade, 1979 to 1990 Source: Gregory et al. (2001)

Implications for the ICT sector in South Australia:

The mining and oil and gas sectors have vastly increased employment in Australia and South Australia as minerals and energy commodity prices boomed. A transition towards automation in the coming decades could have far reaching implications for employment within the State. There is likely to be an upshift in skills levels with demand growing for more technically advanced jobs. Overall, technological advances typically produce net benefits but the impacts are not always evenly distributed. Automation is happening, and will grow, in both the mining and the oil and gas sectors. Adelaide could become a hub for remote operations control centres. There may also arise a demand for training services.

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3.3 Tell Me More

There is a rising demand for up-to-date, transparent and credible information about the sustainability performance of companies in the mining, oil and gas sectors. The demand comes from government, investors, downstream companies, citizens and both current and prospective staff. The explosion of information technology and prevalence of online social media is creating new avenues for meeting this demand. Online tools can help a company collect, store, interpret, report and disseminate information relating to social, economic and environmental outcomes. This information may cover historical time series, current events and planned future performance. The information may relate to mine sites, specific operations, geographic regions or an entire companys or industrys performance. The gradual upshift in the comprehensiveness, accuracy, accessibility and detail of information is likely to continue over coming decades. Reporting that was once discretionary or rare will become mandatory or standard-practice. Resources companies will turn to information technology companies to help them meet rising standards and consumer and investor expectations.

Social licence to operate. Since being introduced by an executive of Placer Dome, Jim Cooney, in 1997 at a World Bank meeting the phrase social licence to operate now has widespread use and acceptance within the resources sector (Lacey et al., 2012). It is generally considered to imply that a company reaches a standard of performance above and beyond the minimal legislated and/or regulatory requirements. Today large companies refer to the importance of maintaining and enhancing their social licence to operate within their strategic plans. For example, Rio Tinto aims to increase our capacity to gain and maintain a social licence to operate in social inclusiveness and gender equality policies (Rio Tinto, 2009). Other companies referring to the importance of social licence to operate include BHP Billiton, BP, GlencoreXstrata and many others. The concept, and desire, of perming above and beyond minimum standards to achieve community support is likely to be of increasing importance to resources companies into the future. The rise of sustainability reporting. Today 95 percent of the worlds 250 largest companies conduct sustainability reporting on a regular basis. In 1999 this was only 35 percent. What was once discretionary and unusual quickly obtained mainstream status. The major drive comes from demand by investors, staff, government and the community to know about the environmental and social performance of the company.
100 90 80 70 Percentage 60 50 40 30 20 10 0 1993 1996 1999 2002 2005 2008 2011 Largest 100 companies within each country surveyed Largest 250 companies in the world

Figure 15. The rise of sustainability reporting Source: KPMG (2011)

Levels of reporting tend to be higher in advanced economies. In the United Kingdom 100 percent of large companies use sustainability reporting. This compares to 99 percent in Japan and 83 percent in the United States. However, the developing world is in the phase of rapidly increasing sustainability reporting by

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companies. From 2008 to 2011 sustainability reporting in large Mexican companies jumped from 17 percent to 66 percent. Over the same time period in South Africa there was a jump from 45 to 97 percent. The KPMG report identifies 16 industry sectors. Of these the resources sector comes to the top with 84 percent of large companies reporting their sustainability performance (KPMG, 2011). Rising standards for sustainability reporting. The future is likely to see an upshift in standards for environmental and social reporting. The Global Reporting Initiative is currently the most widely applied standard. This year the G4 updated guidelines were released which introduce new requirements for disclosing governance, ethics and integrity, supply chains, anti-corruption and GHG emissions (GRI, 2013). Standards for timely, accurate, comprehensive and independently verified information are likely to rise over the coming decade. Companies are likely to continue to meet these new standards as they upgrade their own reporting systems. This holds opportunities for internet and computer based tools to improve the recording and reporting of information. The demand for transparency. The demand for transparency is coming from all directions: citizens; governments; companies and NGOs. The recent and rapid rise of the Extractive Industries Transparency Initiative (EITI) illustrates this trend (Figure 16). Numerous academic and industry reports during the 1990s relating to mismanagement of resources sector revenues, often discussed under the heading of the resource curse, called for greater transparency. In 2001 the energy company BP published royalty payments relating to its oil projects in Angola. This led to much controversy and the CEO of BP, Lord John Browne, called for a coordinated approach. Actions to improve transparency were coming from corporate, community and government sectors.
35 31 30 25 Number of countries 21 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 2 3 8 13 18 29 27

Figure 16. Countries issuing reports under the Extractive Industries Transparency Initiative (EITI) Source: Extractive Industries Transparency Initiative Website (http://eiti.org/countries/reports)

In 2002 the British Prime Minister Tony Blair announced the EITI at the World Summit for Sustainable Development in Johannesburg. Today 39 countries implemented the EITI with 23 reaching compliance. Over 70 major oil, gas and mining companies had formally expressed support for the EITI principles. A total of 33 countries have issued EITI reports and disclosing revenues of $1,008 billion (EITI, 2013). Ways to improve the EITI are being suggested and some groups would like to see it become mandatory. However, it is largely considered a successful initiative by industry, government and community groups. One view is that the EITI needs to broaden its focus from reporting royalties towards transparency in all aspects of resources development (Aaronson, 2011). This trend points towards growing demand for transparency within the resources sector. The demand is coming from multiple angles including many of the resources companies themselves.

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Ethical investors want environmental and social information. A recent study finds that one in every eight individual investors is willing to forgo financial returns to achieve ethical principles. Variables associated with increased propensity for ethical investment include being female, being well educated and working in empathetic professions (e.g. healthcare, teaching). It is estimated that 11 percent of all United States funds are managed within ethical guidelines (Sve-Sderbergh, 2010). In the United States some US$3.74 trillion funds were managed under social responsible investment (SRI) during 2012. This represented a 22 percent increase since 2009 (Dilla et al., 2013). Ethical investors, and funds managers, will seek out data about a companys environmental and social performance prior to making investment choices. Information discovery in a complex regulatory context. Since 2006 the South Australian government has been running a red tape reduction program. Independent evaluation by Deloitte finds savings of $170 million for phase one of this program. Phase two commenced in 2009 of this program is expected to yield savings of $150 million (DMITRE, 2009). From a national standpoint considerable challenges still exist. For example, the oil and gas sector in Australia must respond to 22 petroleum and pipeline laws and 150 statutes governing upstream petroleum activities (Productivity Commission, 2009). Government and industry are actively exploring ways to reduce the regulatory burden. This burden is felt jointly by government departments and private companies. Innovative solutions that allow the important functions of regulation to continue, and improve, over time whilst reducing the cost are of much value. This is likely to push governments in the direction of advanced online tools which facilitate efficient, effective, transparent and trustworthy information sharing between stakeholders. Sustainability reporting and information technology. The practice of reporting a companys financial, environmental and social performance data once every year, through an annual report, may become old fashioned. Information technology has already transformed organisations through enterprise resource planning (ERP) systems. These systems are used to continuously record and monitor operational information. They automate tasks such as inventory replenishment. However, in the future enterprise resource planning systems may evolve into entire resource planning systems. A recent study in the field of informatics (Xu, 2011) suggests that next generation enterprise systems will need to handle raised expectations for sustainable economic growth and global environmental protection (p 632). The authors continue by saying a key characteristic of the new system is the provision of comprehensive coverage of all relevant types of resource planning. Next generation enterprise systems could capture and report all relevant social and environmental data for instantaneous publication on the companys website and/or provision into automated systems designed to mitigate risk. The enterprise software business is large and multi-faceted. By one estimate global spending on enterprise application software was US$120.4 billion in 2012 up from US$115.2 billion in 2011 (Gartner, 2012).

Implications for the ICT sector in South Australia:

The growth of sustainability reporting represents a major shift in the corporate landscape. This phenomenon has been fuelled largely by innovation in the private sector. What was once optional is now seen as mandatory. What will the standards look like in another ten years time? The concept of the social license to operate features heavily in corporate strategy and policy documents in the mining and oil and gas sectors. There is recognition by companies they need broad social support for their projects to succeed. This is likely to grow and evolve over the coming decade. A crucial component to the social license to operate is transparency. Where people cannot easily understand and see the activities of a company, distrust can emerge. Transparency improves trust and builds an evidence base for social discourse about the resource sector.

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3.4 Plugged in and Switched On

This megatrend explores the incredible growth of digital data, device connectivity and communication in the online world. These trends are creating powerful new resources and meta-level functionality which did not previously exist. The rapid advances in digital connectivity are changing the way companies do business.

Bigger big data. Every day the world generates 2.5 quintillion bytes of data. The rate of data generation is escalating rapidly. It is estimated that 90 percent of todays data was generated in the last two years (IBM, 2013). As the number of websites, internet users and sensory systems continues to grow, so too will the size of the worlds data. The explosion of data has been accompanied by the rise of the field of big data analytics. This new field of information technology is aims to uncover patterns, events and trends in large digital datasets to inform peoples choices. Coming decades are likely to see growth in this field and the industry as new technologies are developed and applied. For example, within the oil and gas industry Chevron is making use of a major big data analytics technology called Apache Hadoop. This is an open source software framework which divides the application into many small fragments of work. Chevron are using Hadoop to analyse seismic data to identify reservoirs of oil and reduce the costs of sending ships into deep ocean waters (King, 2012). The Internet of Things (IOT). The number of devices connected to the Internet exceeded the number of people on Earth in 2010. By 2020, this ratio is predicted to increase to almost 7:1 (Evans, 2011). The IOT is an evolving concept and represents a revolution of the Internet as we know it. Now, not only are increasing numbers of smartphones, medical devices, temperature sensors and laptops connecting to the web, but objects like clothing items, coffee machines and thermostats are also able to communicate within this virtual network. By giving seemingly unrelated objects the ability to speak the same language, we are moving away from a siloed method of information gathering and interpretation. As this network becomes more populated and more diverse, we will have a richer pool of raw data which will allow us to draw new conclusions and insights by incorporating information from a variety of data sets. Additionally, as these devices become better at gathering information, we will no longer require humans to perform manual data processing, thus paving the way for enhanced big data analytics. And as these objects become better at communicating with each other, another window of opportunity in the realm of machinetomachine communication, automation and remote control will open. The IOT ultimately means that these physical objects become themselves active participants in the acquisition of data and the control of their systems (Ashton, 2009). The technology exists; we just need to plug it in. Much of the enabling technology for the IOT already exists. For some time now we have been able to track objects in space using geographical positioning systems (GPS) and unique radiofrequency identification (RFID) tags. We are able to do this because the RFID tags can communicate with a tracking system without any human system intervention. These are in extensive use in the retail sector, material supply chains and in industrial safety systems. There are many other existing sensors and networks of sensors which do not themselves interact or converse with each other but which can be referred to by centralised servers. For example, global roaming capabilities in smart phones, telecommunications hubs and smart energy systems all operate on this base dispersed objects connected to each other via a centralised system. However, in order for these separate networks to connect, and in order for objects to be able to identify and communicate with each other, standardised naming protocols and enhanced security applications are required. These too are being developed for example through the evolution of the semantic web concept advocated by Tim Berners Lee (1999). The idea is based on developing naming protocols that can uniquely identify all things, not just those that are electronic, smart, or RFID-enabled. For example, the Dutch start-up Sparked, implants sensors into the ears of cattle in order to track and monitor their activity. The animals health, movements, and position are available on a server for access by farmers, who can respond accordingly (Jefferies, 2011). This technology evolution is enabling a far wider range of objects to be accessed and interrogated by agents (such as centralised servers) acting for their human owners. The

Scenarios for ICT in Minerals and Energy in 2025 | 23

consequence of this is that the number of objects interacting with the Internet will continue increasing exponentially. New Internet protocol systems such as Internet Protocol Version 6, also address this concern by theoretically providing a limitless supply of names to identify objects, and enhanced security within the network (Atzori, 2010). Information flows in a world of four (not six) degrees of separation. It was in 1967 that Stanley Milgram published his work on the Small World Problem in which people sent postcards to an identified recipient by passing them through known acquaintances. The average number of intermediaries was found to be between 4.4 and 5.7 people. This led to the folklore concept of six degrees of separation which was later the title of a 1990 play by John Guare and a 1993 movie adaptation directed by Fred Schepisi. The idea is that every person on earth connected to every other person on earth by no more than six acquaintances. In 2012 researchers from Facebook and the University of Degli Studi di Milano in Italy tested the concept on the entire Facebook network which at the time had 721 million users and 69 billion friendship links (Backstrom et al., 2012). The average distance found in this study was 3.74 intermediaries (degrees of separation). The online world is bringing people closer together and increasing the speed and distribution of information flows. This will continue to have a profound impact on how people obtain, trust and use information in decision making into the coming decades. New public relations risks. Social media has created the means by which the experience of one consumer can be shared with millions. This was the case with a professional musician and United Airlines. After United Airlines refused to compensation for allegedly breaking a $3,500 guitar, the musician wrote a song United Breaks Guitars which he posted on YouTube. This was subsequently viewed by over 12 million people and received media coverage on the internet, print and on television. As this happened United Airlines stock dropped by 10 percent wiping off US$180 million of shareholder value (WEF, 2013). The consumer now has the capacity to share their experiences, whether good or bad, with global audiences. This creates a new public relations challenge. Companies within the oil, gas and mining sector are vulnerable to this risk. Software solutions, systems and processes which allow them to manage and respond to such incidents are likely to be under demand. Crowd-sourcing exploration an amazing success story. A write up in Bloomberg (Tapscott et al., 2007) describes how a Canadian mining company Goldcorp was struggling to locate gold deposits on its Red Lake property in Ontario. The company chief executive officer, Rob McEwen, tried a novel approach. They published all the companys proprietary geological data relating to gold deposits within the property on a public website. They offered cash prizes worth US$575,000 to anyone who could identify successful sites. The company attracted more than 1000 virtual prospectors from 50 countries. They identified 110 target sites of which 80 percent yielded large quantities of gold. The winning entrant was a Western Australian geological survey company Fractal Analysis. The subsequent mining activities produced 8 million ounces worth US$3 billion. The market value of GoldCorp rose from US$100 million to over US$9 billion. This is widely held up as one of the early successes of crowd sourcing which led to many similar and successful projects in multiple industries (Marjanovic et al., 2012). Crowd-sourcing regulation and e-Government. The rise of the internet has been accompanied by a research and policy movement often referred to as e-government. E-government is generally defined as the delivery of government services and functions using digital tools in an online environment. A recent study (Reddick et al., 2013, p. 1) argues that E-government is potentially one method of both promoting collaboration with businesses through digital means, but it also is a way to monitor and regulate business; with collaboration being important for public administration. This is seen as a mechanism for improving efficiency, collaboration and trust within the regulatory space. However, thinking in this space is in its infancy. The information technology sector is yet to produce the models, software and process via which crowd sourcing and or e-government could deliver cost effective regulation. The coming decades are likely to see action in this space and considerable opportunities for information technology firms that develop the right models.

Implications for the ICT sector in South Australia:

There is a demand within the wider community for transparency and information about mining

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activities. This represents an opportunity for governments and mining companies. The regulatory burden may be eased if technology allows the consumer of information to connect directly to company. South Australias information technology industry may be well positioned to supply innovative business models that effectively move in the direction of self-regulation of aspects of the oil and gas and mining sectors. If proven successful such tools could have applicability in global markets. The costs of meeting regulations are widely cited as one of the main challenges for increasing mining and energy sector investment in Australia. Innovative approaches stemming from the information technology sector could deliver benefit to the whole economy.

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3.5 The Knowledge Economy

This megatrend explores why and how the South Australian economy may expand knowledge and technology exports. The boom in resources sector investment has been accompanied by the development of valuable knowledge and skills. It is possible, some would say probable, that resources sector investment in Australia slows down in coming years. In comparison developing countries are in the process of expanding production and investment in the resources sector. There is an opportunity for South Australia to move increasingly into the mining engineering technology services (METS) sector. With a strong university sector, a strong high-tech sector and a legacy of minerals development the South Australian economy is well poised to capture this opportunity. However, many other Australian and world regional economies are also well positioned. It will be a competitive environment requiring swift and strategic positioning.

Emerging economies may demand Australian know-how to develop vast mineral reserves. A significant proportion of mineral reserves are held by developing countries (Figure 17). Given the lower costs of labour, capital, energy, land and water in developing countries the development of these mineral reserves will be an attractive prospect for global resources sector companies. However, many developing countries lack the infrastructure, skills, technology and know-how to develop mineral resources. This is due to lower levels of historical investment compared to Australia. The coming decades may see this change. This will place competitive pressure on Australias mineral and energy commodity exports. However, it will open up a window of demand for resources sector skills and know how.
Iron Ore
8% 47% 45% 37%

Nickel
6%

Bauxite & Alumina

11% 24% 57% 65%

Diamond
14% 25%

Copper
12% 27% Developed Countries Developing Countries

61%

62%

Other Countries

Figure 17. Supply of resource reserves, by country type, 2011 Source: United States Geological Survey (2012)

Mine production is ramping up in emerging economies (especially China). The last decade has seen strong growth in minerals and energy commodity production in emerging economies (Figure 18, Figure 19, Figure 20, Figure 21, Figure 22, Figure 23). This trend is likely to continue apace over the coming decade. China is a standout. Today China is the worlds largest producer of lead, iron ore and gold. Russia has substantially increased oil production and is now the worlds second largest oil producer after Saudi Arabia. The United
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States, Russia and Qatar have vastly increased natural gas production. Today the United States accounts for 20 percent of global natural gas production and Russia accounts for 18.5 percent (BP, 2012). Many South American countries are making similar transitions in both minerals and energy production. These data point towards a likelihood of large increases in production, and exports, from the United States and emerging world economies. Production in emerging economies will continue to grow as resources sector infrastructure is developed to access abundant mineral and energy resources. This creates an opportunity for Australias well established resources sector. Emerging economies may not yet have the technology, infrastructure and skills to exploit their vast mineral reserves. As more suppliers enter commodity markets, making them more competitive and placing downward pressure on price, Australia could increasingly export resources sector know-how in addition to minerals and energy products.
Thousands of tonnes (metal content) Millions of tonnes (metal content) 2.5 China 2 USA Mexico 1.5 Australia Peru 25 Kazakhstan 20 Australia Namibia 15 Canada Niger

10

0.5

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011

Figure 19. Lead production (top five producing countries in 2011) Source: British Geological Survey (2013) Production of iron ore (billions of tonnes) 450 400 Gold production (tonnes) 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 China USA South Africa Australia Russia

Figure 18. Uranium production (top five producing countries in 2011) Source: British Geological Survey (2013) 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 China Brazil Russia Australia India

Figure 21. Gold production (top five producing countries in 2011) Source: British Geological Survey (2013)

Figure 20. Iron ore production (top five producing countries in 2011) Source: British Geological Survey (2013)
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12 Millions of barrels per day 10 Billion cubic meters 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 8 6 4 2 0

700 600 500 400 300 200 100 0

United States Saudi Arabia United States China Russian Federation Iran Australia Canada Qatar

Russian Federation Iran Australia

Figure 23. Oil production (top five producing countries in 2011 plus Australia, the 29th largest producer out of 48 producing countries) Source: BP Statistical Review of World Energy (BP, 2012)

Figure 22. Gas production (top five producing countries in 2011 plus Australia, the 20th largest producer out of 49 producing countries) Source: BP Statistical Review of World Energy (BP, 2012)

Mining investment when will it peak? What will replace it? The phenomenon of commodity price growth has been accompanied by a boom in mining investment in Australia. In the last two quarters for which data are available from the Australian Bureau of Statistics (December 2011 and March 2012) mining investment added up to more than all other forms of investment in the Australian economy. The crucial question is when will the investment graph peak?
45 Investment (Current prices, A$billions) 40 35 PErcentage growth 30 25 20 15 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0.0% -5.0% -10.0% Figure 24. Capital investment in the Australian economy Source: Australian Bureau of Statistics, Actual Private New Capital Expenditure, Trend Series (ABS, 2012b) Figure 25. Quarterly growth rate for mining investment Source: Australian Bureau of Statistics, Actual Private New Capital Expenditure, Trend Series (ABS, 2012b) Mining Investment All Investment in Australia 20.0% 15.0% 10.0% 5.0% 25.0%

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There is still much mining work in the pipeline for coming years. Activity in liquefied natural gas mining is likely to expand. However, in its February 2013 Statement on Monetary Policy (SMP) the Reserve Bank of Australia forecasts a slowdown in mining investment. Under this scenario mining investment peaks by the beginning of the 2013 calendar year and declines over the year 2014. This is a downward forecast compared to the Reserve Banks August 2012 SMP. Forecasts of mining investment are subject to high levels of uncertainty due to the many factors at play. However, the downward turn in commodity markets signals a plausible future where mining investment drops below the current very high levels. For the past two quarters mining investment has grown but the rate of growth has fallen from 18.3 percent to 13.7 percent (Sep 2011 to Dec 2011) and from 13.7 percent to 10.2 percent (Dec 2011 to Mar 2012) (ABS, 2012b). Investment may target the mining engineering technology and services sector. There is some degree of fungibility between investment in mining and investment in METS. Whereas investment growth in the mining sector is unclear the METS sector is set for strong future growth. There have been two major studies into Australias METS sector which document historic and future expansion.

The Mineral Council of Australia (Scott-Kemmis, 2013) finds the nation has 270 generalised or specialised companies active in METS. Most of these companies supply the mining sector but many supply multiple industries. In 2012 the Australian METS sector sold products and services worth A$71 billion into the mining sector and employed over 265,000 people. Exports of METS exceeded A$12 billion comprising over one-third of total income making it a highly internationalised sector. Industry reports indicate that offshore activity in METS is growing rapidly and by 2008-09 27 percent of Australian METS firms had opened overseas offices in North America (19 percent), South America (15 percent) and many in Asia, Africa, Oceania and Europe. The Australian Bureau of Agricultural and Resources Economics (ABARE) (Tedesco et al., 2010) find that METS revenue in 2008-09 was A$8.7 billion with export sales of A$2.5 billion and domestic sales of $6.2 billion. They also find in that year employment in the sector of 31,300 people with research and development expenditure of $985 million. The ABARE paper also identifies strong historical growth in METS exports with total export sales revenue equating to A$467 million in 1995-96 and rising to $A2.5 billion in 2008-09.

Clearly the Mineral Council of Australia identify a much larger METS sector. This may be due to growth in METS during the two time periods (2010 to 2013) and different definitions and methods used in the two studies. However, the general consensus would seem to be that METS is a growing sector with strong prospects for future growth. Furthermore, METS is a highly internationalised sector and much revenue growth may come in the form of exports to overseas markets. From ingots to ideas in Pittsburgh. For many decades the Pittsburgh economy relied on steel production for continued growth. However, market forces led to contraction of the industry during the 1970s and 1980s with most steel mills being closed down. However, the Pittsburgh economy was resilient. It managed to adapt and develop a new industry supplying goods and services to the steel industries of other regions (Figure 26). This transition has been widely studied. An academic from the University of Pittsburgh (Treado, 2009, p. 105) wrote that : Although Pittsburgh did lose most of its steel-making capacity during the end of the 20th century, it did not lose its steelmaking expertise. That expertise became the basis of Pittsburghs 21st century role as a key participant in the global steel value chain. With a critical mass of both product and service providers, the Pittsburgh region has become a key source of steel technology. According to the author the ability of Pittsburgh to make this transition and create a steel technology cluster came down to the citys location, labour and legacy. Pittsburgh did not just make steel. They thought about how to make steel and captured this knowledge. The regions long tradition in metallurgy and materials science allowed this transition to occur (Treado, 2009). Will Adelaide and South Australia make similar transition given changes to global commodities markets? South Australia, like Pittsburgh, has strong universities, research and technology capabilities. The ingredients for capitalising on high tech

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services for minerals and energy projects are in place. However, it is a competitive environment and other regions will be trying to achieve the same outcome.
20 Share of US total (percent) 18 16 14 12 10 8 6 4 2 0 Chicago Pittsburgh Detroit Cleveland Share of Steel Making Capacity Share of Steel Technology Firms

Figure 26. Share of steel making capacity and technology firms for US cities in 2003 Source: Cambridge Journal of Regions, Economy and Society; Treado (2009)

Implications for the ICT sector in South Australia

The structure of an economy always transitions over time. Gradually, and sometimes rapidly, the underlying sources of wealth creation switch from one thing to another. Economies that continue to grow and prosper are able to grasp new opportunities and make the transitions smoothly. The mining and energy resources sector in Australia will, like any industry, go through periods of growth and contraction largely driven by commodity price movements. The coming decade is unlikely to experience the high prices of gold, iron ore and other important commodity exports of the past decade. A period of transition is currently occurring. However, studies into the mining engineering services and technology sector reveal prospects for a growth industry. South Australia is well positioned to capitalise on this. However, competition will be strong.

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3.6 E=MC2
Albert Einstein reshaped the world of physics, and arguably the world, when he developed revolutionary theories of energy mass equivalence. We borrow two concepts from Einstein in this megatrend. Firstly, is the concept that energy can be swapped with matter. We suggest that over the next 10 to 20 years scarce mineral resources (e.g. gold, silver, lead) will be increasingly exchanged for more abundant energy resources (e.g. coal, natural gas, uranium) via processes of recycling. Secondly, is the concept of revolutionising current models. There is a possibility that business models will be radically reinvented in response to resource scarcity. The growth of the recycling industry and the emergence of new business models to handle mineral resource scarcity will create opportunities in the information technology sector.

Mining above the ground. The mine of the future may be increasingly concerned with materials that lie above, rather than below, the earths surface. This is due to the increasingly rich and accessible mineral content of recyclable materials. For example an open pit mine will yield between 1 and 5 grams of gold for every one tonne of ore body extracted. This compares to 350 grams of gold yielded by one tonne of discarded mobile phones and 250 grams of gold yielded by one tonne of computer circuit boards (Owens, 2013). This is partly due to the gradual decline in gold ore grades. In the mid 1800s in Australia gold ores yielded around 50 grams of gold per tonne of ore. This has fallen to less than 3 grams per tonne today (UNEP, 2013). A recent study estimates a annual cost saving of between US$380 billion to US$630 billion within the European Union manufacturing sector arising from the use of recycled products (UNEP, 2013). Abundant energy products can be converted into scarce mineral products via recycling. A recent study estimates the energy value of all the worlds fuel and mineral resources (Valero et al., 2010). The energy value of a mineral resource (e.g. lead, iron ore, gold) is calculated as minimum work (energy) required to produce one unit with a specific chemical composition. This allows the value of all natural mineral and energy resources to be expressed in a single unit tonnes of oil equivalent (toe). A tonne of oil equivalent is the amount of energy released by burning one tonne of crude oil (approximately 42 gigajoules). From this perspective a mineral resource (e.g. gold) requiring at minimum 1 toe to produce has equivalent value as one tonne of crude oil. Both resources are interchangeable. The study finds that given known reserves and current consumption rates:

the total non-renewable energy resources (coal, uranium, natural gas and oil combined) will last the world another 574 years; and the worlds total mineral resources will last for another 191 years.

The authors of this study conclude that there is no energy scarcity, but minerals scarcity. Vast amounts of energy are available on earth, much more than we could ever use and that the world cannot speak about energy crisis, but rather materials and environmental crisis and that recycling and especially, the search of a dematerialized society becomes essential (p995). If we accept that materials and energy are interchangeable via recycling these observations hold salient implications for humanity and redefine our current understanding of resource scarcity. They also point us in the direction of growth in recycling. The worlds abundant energy resources can be swapped for the worlds scarce mineral resources via recycling. Dematerialising the economy. Although the level of material consumption continues to grow, there are emerging signs of a relative decoupling of economic growth with material consumption (Figure 27) (OECD, 2011b). Relative decoupling is a decline in material consumption relative to economic output. This results a preferential shift toward consuming experiences and services rather than physical goods and from more efficient production systems. As technology improves economies need fewer materials to produce the same outcome.

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21
Material Consumption (metric tonnes per capita)

$35,000 $30,000 $25,000

Average GDP Per Capita for G8 Countries (excluding Russia) in 2000 USD

20 19 18 Domestic Material Consumption 17 16 1980 1990 2000 2008 Income (GDP Per Capita)

$20,000 $15,000 $10,000 $5,000 $0

Figure 27. Declining material consumption in advanced economies in line with economic growth Source: Material consumption data from the Organisation for Economic Cooperation and Development (OECD, 2011b) and GDP per capita data from The World Bank (World Bank, 2012b).

In 1985 a kilo of aluminium made 46 drinks cans. Today the same amount makes 70 cans. - Andrew Bloodworth, British Geological Survey, 2013

The reasons to recycle. The main materials that are recycled in Australia include metals, organics, paper and cardboard, plastics, glass and masonry materials (DSEWPaC, 2012). Based on 2008-09 recycling rates, there is scope to increase the recycling rates across all of these categories (Figure 28) (DSEWPaC, 2012). As materials become increasingly scarce relative to demand, and as mineral ore grades decline, humans will increasingly turn to recycling technologies. The drivers of recycling growth include:

Gradual decline in mineral ore grades (UNEP, 2013) (Mudd, 2010). The data reveal that for many mineral commodities in Australia and worldwide ore grades are declining as the richer deposits have been increasingly extracted; Improvement of recycling technology (Binnemans et al., 2013). Coming decades will see the continued advancement of chemical and physical process for recycling and computer tools to aid the recycling process; Increased generation of waste material. In 2009-10 waste received at landfill sites in Australia amounted to 21.6 million tonnes (ABS, 2011). This compares to 17.7 million tonnes in 2002-03 (ABS, 2004); Abundance of some energy resources. The world has an abundance of certain energy sources including coal, natural gas and uranium. These products can supply the energy needed to convert anthropocentric waste streams into useful materials; Rising cost of waste disposal to landfill. In 2009-10 Australias private and public sectors together spent A$10.2 billion disposing of waste (ABS, 2011). This compares to only A$2.5 billion in 2002-03 (ABS, 2004); and Continued and forecast growth in demand for metals, plastics, glass, fabrics and other materials (UNEP, 2013).

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18,000 16,000 14,000 Tonnes ('000) 12,000 10,000 8,000 6,000 4,000 2,000 0 Disposal Recycling

Figure 28. Australian disposal and recycling rates by material, 2008-09 Source: Hyder Consulting (2012)

The economic value of recyclable material. Estimates show that the Australian recycling and waste sector is valued at between A$7 to A$11.5 billion (Environment Protection and Heritage Council, 2010). In 200607, Australia generated 43,777,000 tonnes of waste, recycling 52 percent and sending 48 percent to landfill (Environment Protection and Heritage Council, 2010). This was a 35 percent increase from 2002-03. Forecasting out to 2020-21 under a medium growth scenario of 4.5 percent per annum, it is predicted that Australia will produce 81, 072, 593 tonnes of waste (Environment Protection and Heritage Council, 2010).
30,000 25,000 21,400 Tonnes ('000) 20,000 15,000 10,000 5,000 0 2002-03 2006-07 2008-09 17,400 15,000 20,200 Disposal Recycling 22,600 23,900

Figure 29. Total waste disposal and recycling in Australia over time Source: Hyder Consulting (2012)

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More recycling needs more software. Growth in the recycling industry will be accompanied by an information technology services industry. A detailed study into the recycling sector by the United Nations Environment Program identifies the following classes of computer-based tools needed for efficient material recovery, re-use and recycling (UNEP, 2013):

Liberation modelling systems. These tools calculate and predict the dynamically changing recycling and recovery rates for complex waste streams. Liberation models have long been used in traditional mineral ore processing. However, anthropogenic waste streams are more complex than natural ores and require new software systems. Life cycle assessment software. When linked to simulation tools life cycle assessment software can help manufacturers understand the environmental and health impacts of a product through its entire existence (including recycling stages). Life cycle management software. This zooms out from products to the whole business and/or industry to identify economically, socially and environmentally efficient production processes. Design for sustainability. Software can help designers build products within which compatible groupings of metals can be easily dismantled and directed into the metallurgical processing infrastructure or used as inputs into other value chains.

Sell the service not the product. In their recent book The Sixth Wave James Moody and Bianca Nograd argue consumers and producers of the future will experience a major shift. The energy company wont sell electricity but warmth. The airline wont sell seats on planes but rather connections with family and friends. This is a perceptual shift but may have implications for business models. For example, the energy sector has seen the emergence of service contracts. These may involve the electricity company signing an agreement to keep someones house at a certain temperature (e.g. 21 degrees Celsius) all year around for a fixed fee. This means the company can use the optimal mix of solar passive design, intelligent power utilisation systems and electricity provision. The concept may extend beyond the energy sector into mining and manufacturing. Is there a possibility that companies in the future will rent materials such as aluminium to product designers with a refund given upon return for recycling? Resource scarcity is likely to see innovation in the space of business models for materials management.

Implications for the ICT sector in South Australia:

From some perspectives energy is the underlying currency supporting human lifestyles. Energy is needed for light, food, warmth and transport. The world has vast and diverse energy sources which allow these outcomes to be delivered. Our ability to be creative with energy may be central to our ability to grow strong and sustainable economies. As waste generation increases and mineral resources experience increased demand recycling will have growing importance. Waste streams are becoming more mineral rich than the ore bodies. Recycling is a technology that allows energy to be swapped for minerals. The recycling sector is likely to grow and diversify in coming decades. Information technology can improve the efficiency and effectiveness of recycling. It can help model complex waste streams and manage products at every stage of their lifecycle. Growth in recycling will create opportunities for the information technology industry.

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4 Minerals and Energy in 2025

This section outlines future narratives for both minerals and energy resources in 2025. For this project, we have developed normative scenarios for key aspects of the resources sector. A normative scenario is a single narrative of a component of the future and provides a vision which can be worked towards through strategic planning and decision making. A key component of this project is to examine the potential for ICT capabilities within these scenarios. Therefore, we present overviews in this section that weave together narratives on the future of the two sectors with descriptions of the ICT technologies that can enable them.

4.1 The integrated minerals value chain of 2025

In 2025, South Australia is a world leader in advanced resource modelling technologies that support exploration and development of detailed geological models. This allows deeper and more difficult resources to be profitably mined, which opens up a new wave of minerals exploration in South Australia and throughout Australia. South Australia rivals Western Australia as a leading global exploration investment destination. This reflects growing confidence based on exploration successes in greenfields terrane in the Cooper Basin as well as the overwhelming success of the expansion of Olympic Dam. Rapid, lightweight, portable drilling sensors and techniques developed by the Deep Exploration Technologies CRC are now in their third generation and allow for cheaper and more accurate geological data to be collected. New unmanned aerial vehicles and airborne sensors2 allow for ultra-high-resolution geo-physical data capture. Critically, this success reflects the strong partnerships between researchers, the State survey and Geoscience Australia to share a technical platform providing world leading pre-competitive data and derivative knowledge to industry, for integrating a wide range of geo-scientific, environmental, and social pre-competitive data and making it available through a cloud-based service on the Internet. This technical platform and integration of data has been enabled by interoperability. 3D geological interpretations3 of large volumes of the Gawler province now exist and are linked to broad 3D hyperspectral coverage that helps guide exploration. As a result, the mineral potential in half a dozen little-explored terranes within the State has been unlocked and the advanced resource characterisation expertise resident in South Australia is well recognised. South Australias ICT industry develops online modelling4, visualisation, resource

2 Data collection: sensors: Traditionally, sensors have been fixed and capable of providing data only when interrogated. However, sensors are increasingly permanently connected to the internet, some wirelessly, and are able to provide real-time feedback on parameters. Wireless sensor networks consist of nodes comprising the appropriate sensors along with computational devices that transmit and receive data wirelessly. The nodes work independently to record environmental conditions. Each cooperates with its neighbours to wirelessly transmit their readings via an adhoc network. Wireless sensor networks provide information on an unprecedented temporal and spatial scale and allows for the study and monitoring of fundamental processes in the environment.

3D visualisation: Mining visualisation technology has become a comprehensive technology combined of geological mining technology and computer network technology (Huang et al., 2011). 3D visualisation of ore bodies allows for higher accuracy of measurement and sampling than that allowed by conventional mapping methods. The design information includes descriptions of observed rock mass structure, physical properties of the rock mass and inferences about the structure and likely behaviour of the rock mass. 3D visualisation of a mine is used in improving mine design, improving productivity and reducing site accidents (Huang et al., 2011).
4

Data modelling: predictive analytics: Predictive analytics is the use of historical data to model possible outcomes in future situations (Williams, 2011). Predictive analytics allows for the inclusion of both quantitative and qualitative data. It also allows for the outcome from historical events to be explored under different conditions (Waller et al., 2013).

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simulation and pattern analysis services which can deliver services anywhere in the world. In 2025, South Australia plays a leading role in developing interoperability and plug-and-play capabilities across major METS vendors and SMEs in the minerals sector, which leads to new opportunities in innovation. South Australia hosts numerous global remote operations hubs and is a world leader in remote operations due to the development of tools, skills and services required to build and maintain tele-operation centres. Several new mining districts in South Australia have opened up with central services being provided to those mine sites from remote tele-operation centres5 in Adelaide. Both suppliers and miners have benefited from interoperability standards6 in mine automation and control7, enabled by data communications/standards8. Miners are no longer locked into a single-vendor solution and instead can build solutions by picking and choosing from best-in-class components. They also benefit from incremental technology improvements to individual components without needing to switch vendors and swap out their entire solution. Increased competition has driven down costs per unit of production and increased incentive for innovation. Caterpillar and Komatsu have opened up their proprietary equipment and standards, enabling innovation in SMEs who are now able to offer niche specialist services, enabling the larger vendors to focus on the core business. SMEs in South Australia have developed custom solutions that work seamlessly with solutions from major suppliers. These SMEs are also better positioned to build software solutions for junior miners who also benefit from cost reductions in equipment and services. Port of Adelaide has increased its capacity to accommodate the additional export volume. Additionally, productivity has increased five-fold through greater interoperability between service platforms and smart, dynamic operational systems that are constantly optimising themselves based on feedback data from all parts of the operation. In 2025, South Australia plays a leading role in integrating existing capabilities to advance the goal of a fully integrated intelligent processing plant that provides feedback and allows for adaptive operations. Operations are now geologically intelligent9 with online analytical techniques enabling high value rock to

Remote operations: Remote operation of a mine is made possible by via automation. Automation increases the number of processes that can be completed offsite. If processes are automated, they can be controlled over the internet and thus the operations centre can be located in a more centralised location rather than in the same location as the mine. It also allows more than one mine to be operated from the same centre to allow for global optimisation and operation .The basic perceptual link between an operator and the remote environment is usually provided via a video stream from one or more cameras at the remote site.

Data integration: interoperability: Interoperability is defined by the Institute of Electrical and Electronics Engineers (1990) as the ability of two or more systems or components to exchange information and to use the information that has been exchanged. Interoperability ensures different systems can communicate with each other. Without this integration, systems cannot communicate with each other and will therefore only be able to operate in isolation to each other. Interoperability is required in the mining industry to support the development of full automation of mining equipment, allowing communication between the various different systems. 7 Automation, control and sensing: Automation generally refers to the full or partial replacement of a function previously carried out by human operators either physically or mentally (Parasuraman et al., 2000; Thorogood et al., 2010). There are three categories of automation in the mining sector(Lynas et al., 2011): 1. Lower level automation the operator is in full control of the system and the technology provides warning or assistance; 2. Mid level automation the operator is in control of the equipment at most times, however certain functions are automatically controlled and overseen by the system. This may involve removing operator control at certain times and not others or having the operator control the equipment from a nearby location; and 3. Full automation the operator is located remotely from the equipment and uses controls and displays to operate the equipment. The majority of automation in the Australian mining industry focuses on providing semi-autonomous operation at the component or subsystem level and is used on a small scale relative to the number of mines, processing plants and export facilities in the country (Lynas et al., 2011). Control and sensing capabilities enhance the effectiveness of an automated process and can increase the scope of possible applications within the mine site. 8 Data communications/standards: Data communication and standardisation enables devices to be built in such a way that they are able to be connected and communicate to other devices. As such, it is the precursor to interoperability and automation. Without standardisation each device continues to work in isolation of each other which can limit the productive capabilities of an operation which may otherwise be achievable. Intelligent processing/control: Geologically intelligent processing occurs where an autonomous mining system is capable of mining ore selected for grade and is able to sort ore as it is mined. The machine is capable of responding automatically to the mineralogy and lithology of geological formations. Intelligent processing/control also applies to the process side of operations. The ability to predict processing performance from ore mineralogy and petrology ultimately allows industry to speed up assessment of the likely viability of new ore deposits. Increased understanding of the ore also means the most effective crushing and grinding technologies can be selected for the particular mineral to improve the quality of the end product and enhance the overall processing performance of an ore. 36 | CSIRO
9

be identified and selectively extracted from the rock mass. In-situ processing is common place in new operations, as is the use of mass conveyance systems based on autonomous transportation. This autonomy means that the number of mining trucks has increased but the size has dropped, enabling a far more energy efficient fleet. Through the provision of online analytical services, such as the common mine model10, that enable multiple chemical and physical measurements to be made using various passive and stimulated spectroscopic techniques, real-time analysis of ore content has been made possible as it moves through the processing plant. This data on ore grade is passed through feedback loops between the processing plant, the resource model and the mine plan. Operational support systems evaluate processing data in near-real-time and use it to modify operations by shifting excavation away from areas of low grade ores and deleterious materials to areas where the ore grades are appropriate and optimal for the plant and price. The intelligent processing plant can sort and selectively process ores by grade based on external conditions such as commodity spot prices, current transportation and shipping costs. New paradigms in excavation have become more prevalent with in-situ mining bringing us closer to the concept of the invisible mine and allowing access to deeper resources without the impacts associated with open cut mines. Dry processing techniques allow for new projects to begin that were previously unfeasible due to lack of access to affordable process water. South Australia's role in this new era of intelligent processing is in the service and technology to integrate process data seamlessly with the mine model to allow near real-time control of both excavation and processing at an increasingly granular level. In 2025, South Australia is a world leader in developing technologies that allow human-controlled and autonomous machines to work safely together in a confined mine environment. Operations now have far greater reliance on sensors and sensor networks, computational analysis and machine-based learning but still retain the involvement of humans for advanced and complex decisionmaking. This has required new skills and interfaces between humans and machines11 that allow for automation to undertake repeatable tasks and data analysis. South Australia has earned a reputation, with strong support from its universities, as a resources-specific global virtual training and education hub, partnering with leading providers of online education platforms and training tools to provide education, training and skills for a new generation of exploration geologists, mine operators and policy advisers who have little or no direct experience in the vicinity of mining equipment. Human behavioural monitoring12 is used to track potentially hazardous human physiological conditions; real-time environment monitoring to track both autonomous and human-controlled machines and identify potentially dangerous interactions; human, machine and environment data tracking and analysis to look for

10

The common mine model: The Common Mine Model (CMM) is a 3D data model of a deposit that integrates the flow of data over the mine site and mining process to provide feedback on the face or operations. It should be able to support both historical and real-time data and observations are updated over time. Whatever happens in the mine should be reflected in the CMM, and every action in the CMM (initiated by human operator or artificial intelligence) should be implemented in the real world. The CMM spans the entire mining value chain from exploration to rehabilitation. The CMM can be used to build a model of in-situ resources and associated mining parameters that are improved upon as mining proceeds. By analysing and modelling the relationships between these inputs, one can estimate in-situ responses such as rock hardness, blastability, fragmentation and liberation, which can then be extrapolated throughout the various mining domains within the mine model.

11

Human/machine interaction: The control of a machine can range from manual to fully autonomous. Between these two modes of operation lies shared autonomy, where man and machine share control of the machine. This can range from assistive control whereby the operator has control over the machine and the computer system is able to provide assistance (e.g. to prevent collisions); to supervisory control where the computer systems have control and the operator provides only high level supervisory advice. A fundamental requirement for systems which are controlled remotely by a human operator is that the operator has sufficient knowledge of the state of the machine and its surrounding environment. This interface can range from a single video stream to a combination of live video and 3D computer visualisations.

Human behavioural analysis: Behavioural analysis is conducted via monitoring sensor suites which track potentially hazardous human physiological conditions. Feedback from these sensors can then be used to alert the operator to implement the best course of action given the circumstance. This aspect of monitoring focuses on the human component only.

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optimisation points and improve safety procedures. Gamification13 has removed the tedium from highly repetitive human-centric processes and augmented reality allows humans to control semi-autonomous systems remotely. Learning systems allow autonomous systems to learn from human operators and neural networks allow autonomous systems to learn optimal behaviours by analysing past activity. To effectively deliver services to the onsite workforce, health services are delivered via telehealth14 where possible. In 2025, South Australia leads the world by working with industry to develop standards for the transparency of environmental data, which decreases the regulatory burden on the government and improves trust between industry and communities. South Australian operations typically rank as benchmarks against the Global Reporting Index, despite the continued high cost of labour. Efficiency gains through automation have offset heightened attention on environmental performance, and mining companies are using advanced sensors and data analytics15 tools to gather an increasingly large amount of environmental data at the mine site. Many of the environmental conditions being monitored have the potential to impact local communities and the South Australian government has pioneered the delivery of open, transparent and interrogatable mine site performance data through their minewatch app. This represents global leadership in crowd-sourcing regulation and drives a continual process of stakeholder engagement by the mine operators. These operations can then be certified against a new international standard for social license. As a result, most operations in South Australia operate with high levels of social acceptance.

4.2 The integrated energy value chain of 2025

In 2025, South Australia is a world leader in understanding the oil and gas resource underneath the State. Advanced reservoir simulation16 capabilities have been developed to support exploratory and production drilling both onshore and offshore, with the associated development of detailed geological and petrophysical models. Advanced techniques for exploration and reservoir characterisation, along with new software and simulators, will reduce the uncertainties for locating sweet spot with potential to contain significant oil and gas reserves. This will also assist in managing reservoir performance during the production phase in order to optimise the production of desired fluids (oil and gas) while reducing the undesired ones such as water. This is opening up a new wave of gas exploration in South Australia and throughout Australia. Critically, this success reflects the strong partnerships between researchers, the State survey and technical service companies to share a technical platform providing world leading pre-competitive data and derivative knowledge to industry. This platform is crucial for integrating data from a wide range of geological related scientific, environmental, and social pre-competitive data and makes it available through

13

Gamification: Gamification incorporates video game elements, such as points, levels and leader boards, in non-gaming systems to improve user experience and engagement (Deterding et al., 2011). It can be used to remove the tedium from highly repetitive human-centric processes. Currently, applications exist in finance, health and productivity (Deterding et al., 2011).

14 Telehealth: Telehealth is the provision of heath related services at a distance using technology assisted communications (Dods et al., 2012). There are a range of services that can be provided via telehealth, depending on the connection speed and quality. Services can range from teleconsultation, requiring only low resolution videoconferencing, to telesurgery which requires remote operation of medical equipment and a very fast interaction and response timescale (Dods et al., 2012).

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Data analytics: Data analytics is becoming increasingly important as the amount of data available to companies grows. Without the means to sort and analyse these flows, data is unable to be constructively utilised to contribute to decision making and performance improvements. Given the volume of data, methods of processing are often different to typical methods used on a smaller scale (Fisher et al., 2012). Computing platforms including cloud-based databases, distributed file systems and novel data structures are often used for the data storage and analysis (Fisher et al., 2012). Reservoir simulation: Reservoir simulation involves numerical modelling of the relationship between reservoir properties, operating procedures and gas production. This modelling allows for analysis of the sensitivity of well performance under uncertainties in the measured data. Based on these sensitivities, suitable reservoir management strategies can be put in place.

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a cloud-based service on the Internet. This integration of data has been enabled by interoperability17 between the various sources. 3D geological interpretations of large volumes of potential oil and gas provinces now exist and are linked to broad 3D hyperspectral coverage that helps guide exploration. As a result, the oil and gas potential in little-explored areas within the State has been unlocked and the advanced resource characterisation expertise resident in South Australia is well recognised. South Australias ICT industry develops online modelling, visualisation, resource simulation and pattern analysis services which can deliver services anywhere in the world. In 2025, South Australia plays a leading role in establishing coherent intelligent oil and gas fields which will include monitoring and control centres, processes simulation centres and optimisation and management of production assets for remote oil and gas fields. In part this is enabled through high quality simulation software, interoperability and plug-and-play capabilities across SMEs in the oil and gas sector, which leads to new opportunities in innovation. The vision of intelligent fields, also known as i-fields, e-fields or smart fields, are oil/gas fields containing wells equipped with down-hole and subsea sensors, real-time monitoring and control devices that are remotely operated18 through integrated information management, decision support systems supported by simulators and analysis tools. General benefits expected from such implementation include improved productivity, higher recovery factors, lower operational costs, better safety and reduced environmental impact. This has required South Australia to overcome scientific and technological challenges in areas such as surveillance and analysis, optimisation and control, new products, data communication/standards19 and materials and processes. In 2025, offshore oil and gas fields have increased productivity fivefold through innovation to assure optimal management of the reservoir, maximum possible handling and transport of valuable fluids through the production system and long pipelines that are now standard for the delivery of product to the new gas plant in Port of Adelaide. ICT has been instrumental in this increase by providing simulation software, seismic monitoring20, sensors21/sensor networks and control systems22 that optimise flow parameters in real time by measuring

17 Data integration: interoperability: Interoperability is defined by the Institute of Electrical and Electronics Engineer (1990) as the ability s of two or more systems or components to exchange information and to use the information that has been exchanged. Interoperability ensures different systems can communicate with each other. Without this integration, systems cannot communicate with each other and will therefore only be able to operate in isolation to each other. Interoperability is required in the oil and gas industry to support the development of full automation of mining equipment, allowing communication between the various different systems. 18 Remote operations: Remote operation of a mine is made possible by automation. Automation increases the number of processes that can be completed offsite. If processes are automated, they can be controlled over the internet and thus the operations centre can be located in a more centralised location rather than in the same location as the mine. It also allows more than one mine to be operated from the same centre to allow for global optimisation and operation .The basic perceptual link between an operator and the remote environment is usually provided via a video stream from one or more cameras at the remote site. 19 Data communications/standards: Data communication and standardisation enables devices to be built in such a way that they are able to be connected and communicate to other devices. As such, it is the precursor to interoperability and automation. Without standardisation each device continues to work in isolation of each other which can limit the productive capabilities of an operation which may otherwise be achievable. 20 4D seismic monitoring: 4D seismic monitoring allows for the monitoring of the behaviour of a reservoir during production (CGGVeritas, n.d.). It consists of 3D repetitive seismic images to monitor the movement of oil reservoir fluids over time (USSI, 2013). Fluid movements and pressure changes in the subsurface of the reservoir can be observed, particularly during production, which helps to optimise recovery of reserves (CGGVeritas, n.d.). 21 Data collection: sensors: Traditionally, sensors have been fixed and capable of providing data only when interrogated. However, sensors are increasingly permanently connected to the internet, some wirelessly, and are able to provide real-time feedback on parameters. Wireless sensor networks consist of nodes comprising the appropriate sensors along with computational devices that transmit and receive data wirelessly. The nodes work independently to record environmental conditions. Each cooperates with its neighbours to wirelessly transmit their readings via an adhoc network. Wireless sensor networks provide information on an unprecedented temporal and spatial scale and allows for the study and monitoring of fundamental processes in the environment. 22 Automation, control and sensing: Automation generally refers to the full or partial replacement of a function previously carried out by human operators either physically or mentally (Parasuraman et al., 2000; Thorogood et al., 2010). There are three categories of automation in the oil and gas sector (Lynas et al., 2011): 1. Lower level automation the operator is in full control of the system and the technology provides warning or assistance; 2. Mid level automation the operator is in control of the equipment at most times, however certain functions are automatically controlled and overseen by the system. This may involve removing operator control at certain times and not others or having the operator control the equipment from a nearby location; and 3. Full automation the operator is located remotely from the equipment and uses controls and displays to operate the equipment.

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and then adjusting for fluid properties and oil/gas/water mixes. In 2025, South Australian gas potential through both shale oil gas and coal seam gas has been opened up through a coordinated effort now controlled from world leading remote operations centres in Adelaide. South Australia is a world leader in developing smart information platforms which allow autonomous technology at multiple fields to be operated effectively through remote control. The benchmark standards of risk analysis developed in the oil industry for reservoir characterisation are being applied to event recognition and operational management through pattern analysis, machine learning and event recognition, all embedded within the smart information platform. In 2025, South Australia leads the world by working with industry to develop standards for the transparency of environmental data, which decreases the regulatory burden on the government and improves trust between industry and communities
.

Control and sensing capabilities enhance the effectiveness of an automated process and can increase the scope of possible applications within the oil field or gas well.

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5 ICT Scenarios for Mineral Resources

This section identifies six discrete scenarios for South Australia (Figure 30). These are illustrated below, mapped against both the value chain for mineral resources and the business drivers that they best address. These scenarios are not mutually exclusive and many have significant overlap and synergies. Each scenario is discussed in more detail below.

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Figure 30. Specific scenarios for South Australia mapped against the value chain

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5.1 Advanced resource modelling

The challenge and opportunity
The acquisition and availability of geoscientific data is no longer the limiting factor in geological interpretation and resource characterisation (Duffy et al., 2006). Intense innovation in our ability to measure properties and sense our environment faster, cheaper, remotely and continuously has led to an explosion of data availability (Reitsma et al., 2009). It is now within our ability to collate and interpret this data in many varying dimensions to understand the resource that constrains the exploration and characterisation process. There are two distinct opportunities here for South Australia:

Currently, South Australia is ranked 20th as an investment destination for the global minerals resources sector amongst 96 jurisdictions around the world (Fraser Institute, 2013). The provision of multiple precompetitive datasets regarding its prospective resources would assist in demonstrating its attractiveness as an investment destination for the global mining sector. Australias share of the total global exploration budget for all minerals including iron ore was 15.6 percent in 2012 (MCA, 2013). With exploration representing a substantial cost of operations, there is significant demand for any service provider who can decrease those costs by improving the speed and accuracy of decisions about capital and operational investment (MCA, 2013). Effective integration and analysis of multiple of disparate datasets exponentially increases the input information to choices about targeting, drilling and the location of new excavations.

The opportunities for ICT to assist in this data collation, integration and interpretation are enormous and many are already well established in the sector particularly in the area of data acquisition, data storage and geological simulation. For example, new lightweight, rapid and portable drilling sensors and techniques developed by the Deep Exploration Technologies Cooperative Research Centre will allow for cheaper and more accurate geological data to be collected (DETCRC, 2012) and unmanned aerial vehicles and airborne sensors allow for ultra-high-resolution geo-physical data capture (Hewson et al., 2010) However, the full potential to transform efficiency and accuracy in resource characterisation through integration and data interoperability is yet to be realised. Currently, human interpretation and integration of data is the norm. Some data interoperability is enabled through software languages such as the GeoSciML code (CSIRO, 2013b) which enables comparability between differing datasets, measured on differing scales. Trial and error is used to discover relationships between observations and useful knowledge. This is coupled with the interpreters experience and knowledge with success being highly dependent on the precedence of the observed system behaviour and the skill of the interpreter. In many circumstances more data is available than is used in interpretation as a result of limitations in technology and interpreter capacity. Single models are generally produced and the update cycle when new data arrives is slow. Emergent ICT technologies can enable far greater levels of computational augmentation of human interpretation. The use of algorithms that automate handling of large datasets, the application of high performance data systems coupled with large data stores, access to data governed by open standards to ease the integration burden (for example via Spatial Information Services Stack (SISS)) and the inclusion of qualitative data all increase the knowledge base. Data mining, machine learning and signal processing techniques can be used in a generic fashion to discover data-driven relationships across multiple data types. In this way, final human interpretation is then used to create the full model with the assistance of the pattern analysis and the analytics capabilities emerging as a result of the advent of big data and statistical inference. However, these advanced ICT enablers will change the skill set required of the geologist. Although data integration and interoperability through ICT augments the geologists ability to understand the ore body, it simultaneously reduces the data entry, data cleaning and data analysis components of the role which often

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form the training ground for early career geologists (Hutchinson, 2001).

What if...?
South Australia pioneered the next level of maturity in data integration by demonstrating the efficiency and accuracy that can be achieved by greater levels of symbiosis between computational analytics and human experience. Computational simulation can use probabilistic inversion techniques and rapid model generation to realise multiple possible models that are constrained by the observations and human hypothesis. Uncertainty quantification can be used to understand where additional data would improve the models hence defining priorities for data acquisition. Additionally, algorithms can be used to derive proxies for important rock properties (that are otherwise expensive or difficult to obtain) from qualitative interpretation. In its most advanced state, model predictions can then be tested against human hypothesis, physics and observations (e.g. will it produce the folds and fracture patterns suggested in the observations).

What would this look like?

Achieving this requires: Data integration with numerous targeted GIS, analysis and visualisation packages Databases that are content queryable and the filtered delivery of 3D/4D data Common information management and curation practices from a range of data custodians and data acquisition service providers A new relationship between the geologist and numerical simulation New ways of measuring value from data and agreed relationships between proxy data and important measurements Processing capacity that exceeds desktop computational systems, drawing in cloud and HPC facilities. Provenance systems to provide traceability for data and the decisions based upon that data/models at that particular time

3D mapping services delivered via cloud technology. Cloud capabilities are beginning to be used to deliver industry services. 3D mapping services are one example. 3D laser mapping produces a reliable 3D map of an unknown environment. While this technology has a variety of potential uses in the mining sector, it has not been widely used as current models require expensive laser models, must be operated by skilled engineers and may not operate accurately with a poor GPS signal (CSIRO, 2013a). However, CSIRO has developed a 3D laser mapping tool, Zebedee, that overcomes these challenges and is simple to use, can operate with no GPS signal and requires only basic training to operate (CSIRO, 2013a). In order to make this technology accessible to industry, CSIRO has licensed the technology to UK company GeoSLAM who will offer low-cost cloud based 3D mapping service (CSIRO, 2013a). Maptek (2013), a South Australia based company, has developed a 3D mapping technology called Vulcan that provides 3D spatial information, modelling, visualisation and analysis across the entire mining value chain, from exploration, through mine design and scheduling, to mine rehabilitation.

Why South Australia?

South Australia has already established itself as a pioneer in the acquisition and dissemination of precompetitive data to encourage exploration through its Plan for Accelerating Exploration (PACE) initiative and its South Australian Resources Information Geoserver (SARIG) data delivery portal. There is an extensive range of data available, and derived products, all intended for use by industry in identifying areas for exploration. In addition to this the SA Geological survey, in collaboration with other states and nationally with Geoscience Australia, have established a national geoscience data infrastructure called AuScope (http://www.auscope.org.au/site/). The AuScope infrastructure provides interoperable web service access to data from all of these providers using open standards. Additionally, South Australia has seeded investment in targeting technology and innovation through its support for the Adelaide-centred Deep Exploration Technologies Cooperative Research Centre. The strong
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sponsorship of this CRC by industry exemplifies the challenges and opportunities in technology solutions for exploration. The CRCs technologies will complement those already in use in the field to enable more successful, more cost-effective, more environmentally-friendly and safer ways to drill, analyse and target both new deep mineral deposits (greenfields) and deep extensions to known deposits (brownfields) (DETCRC, 2013). With these strong innovation platforms in precompetitive data provision and exploration targeting technology, coupled with the high levels of prospectivity for minerals in the Gawler Craton and Cooper Basin (DMITRE, 2013a), South Australia has the opportunity to pioneer this next step in data interoperability and advanced resource characterisation.

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5.2 Interoperability for Innovation

The challenge and opportunity
Interoperability is defined by the Institute of Electrical and Electronics Engineers (1990) as the ability of two or more systems or components to exchange information and to use the information that has been exchanged. Interoperability ensures different systems can communicate with each other. Without this integration, systems cannot communicate with each other and will therefore only be able to operate in isolation to each other. There is widespread recognition both domestically and internationally that interoperability enables improvements in efficiency and productivity (Mining & Technology Australia, 2013b). Interoperability is viewed by some as one of the most significant factors affecting the efficiency and productivity of, and the sustainability outcomes from, industrial assets in the mining sector (Mining & Technology Australia, 2013b). For different automated technologies to work together, the various different systems need to be able to communicate. Multiple supporting technologies need to be integrated in order to support the development of full automation of mining equipment, such as draglines and shovels (CSIRO, 2007). Interoperability requires collaborative agreement on technical standards and protocols that support crossenterprise and cross-sectoral activities (DCITA, 2004). Where mining operations are locked into proprietary systems, opportunities for supply efficiency and security through diversification and specialisation are limited. The opportunity is therefore to open up interoperability and communication between the automated systems operating on a mine site. In this way, market opportunities can be opened up to local specialist SME suppliers offering niche ICT-based services to support automated equipment on site.

What if...?
South Australia established a Centre of Excellence around interoperability and standards and worked with industry to create an open platform for application development? Caterpillar and Komatsu opened up their equipment to a common set of standards, enabling SMEs in South Australia to innovate and develop custom solutions that work seamlessly with solutions from major suppliers. SMEs could focus on developing competitive advantage in specific components without needing to provide full solutions. Miners would no longer be locked into a single-vendor solution and could build a pick-and-choose solution from best-in-class components. Additionally, miners could also benefit from incremental technology improvements to individual components without needing to switch vendors and swap out their entire solution.

What would this look like?

The concept of interoperability opens up a huge range of internet-enabled services delivered by specialist companies. Some examples are provided below: Common standards for communications between heavy equipment. An emerging industry-standard data communication protocol, EtherNet/IP, has been incorporated into the Landmark longwall automation project in the coal industry (CSIRO, 2007). By developing specifications for equipment compliance, equipment and controls from multiple vendors can communicate with each other over a network running an Ethernet-based protocol (CSIRO, 2007). Prior to this, controllers from one vendor could not be used in conjunction with controllers or systems from other vendors. This innovation was realised by the introduction of both network protocols (e.g. a wireless standard that is optimised for mine site usage) and communications protocols (e.g. the language autonomous machines use to communicate with each other). Real-time monitoring for efficient operations management. Running costs for off-the-road tyres have increased significantly, with the cost of tyre service and replacement sometimes equating to more than the original cost of the vehicle (Walkinshaw, 2013). Various internet-enabled technologies have been developed to better monitor tyre usage in real-time. OTRACOM is an internet-based tyre management and reporting system that collects data on tyre usage to give recommendations to extend the tyre lifespan

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(Walkinshaw, 2013). Michelin have developed a system to monitor haul truck tyres and alert a team if temperature or pressure problems are detected in their tyres. Because these alerts are in real-time, the best course of action can be decided on and acted upon immediately which also increases productivity and safety (Walkinshaw, 2013). Online 24/7 with in-built failsafe. For full interoperability and fully autonomous mining to work, critical systems must be able to communicate continuously and ubiquitously. This raises a whole suite of new requirements for ICT services (Segal, 2002). Secure services that enable online upgrading of multiple systems, bug detection services to monitor the performance of the information system and identify and remedy problems without taking systems offline and the provision of backup systems that can continue to effectively coordinate between multiple autonomous agents are all services that the defence industry has already addressed. Adoption of these ICT services in the mining industry will ensure that full interoperability is viewed by industry as trusted, secure and reliable. For interoperability to be effective, these barriers need to be identified and overcome.

Why South Australia?

South Australia has a history of defence technology and innovation, promulgated by the presence of the Defence Science and Technology Organisation (DSTO). DSTO (2004) is charged with applying science and technology to applications in defence. Given DSTOs close relationships with the industry, science and technology community, South Australia already has technology and innovation capabilities in companies such as BAE Systems and CEA Technologies amongst others. Developments in technology and innovation in the defence sector are likely to be somewhat transferable to the mining sector. As well as advanced manufacturing, the defence industry involves complex systems engineering and integration, innovative simulation and modelling technologies and leading edge electronics and communications capabilities (Nash, 2012). The similarities in the technological requirements and needs of the two sectors lend itself to a cross-over between the two sectors, for example unattended vehicles and systems engineering (Nash, 2012). Defence and mining require a similar skill set in their workforce and given that South Australia is home to approximately 32 percent of Australias defence industry labour force (Skills Australia, 2012), the potential for collaboration have already been established. Indeed, the choice between focussing on the defence or resource sector is one often encountered in South Australia, with the Defence Industry Innovation Centre already advocating firms to work in both sectors (Garth, 2012). Rather than competing with companies in the other sector, the diversified exposure can help a company smooth capacity pressures, cash flow and profits (Garth, 2012). Given that South Australia already has a number of companies delivering specialist services and products to the Australian Defence Force (Defence SA, 2013), the extension of mining technology from defence technology makes South Australia a promising location for the delivery of innovation and interoperability solutions for mining.

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5.3 Remote operations hub

The challenge and the opportunity
The term automation generally refers to the full or partial replacement of a function previously carried out by human operators either physically or mentally (Parasuraman et al., 2000; Thorogood et al., 2010). Autonomous and remote operation technologies are being pursued in the Australian mining industry with the multiple objectives of improving productivity, environmental performance and health and safety, as well as addressing labour shortages and reducing costs (Bellamy et al., 2011; CSIRO, 2009; McNab et al., 2011; Parreira et al., 2010; Parreira et al., 2009; Rio Tinto, 2008). Most automation is currently concentrated on the component or subsystem level providing semi-autonomous operation and is engaged on a small scale relative to the number of mines, processing plants and export facilities in Australia (Lynas et al., 2011). The strongest growth in automation is expected over the next 10 years and is expected to involve a gradual shift towards automation at the systems level and eventually leading to fully autonomous operation cycles (Dudley et al., 2010). Opinion differs as to whether the most rapid growth in the uptake of these technologies will be in underground or surface mining (McNab et al., 2011). With automation comes the opportunity to control an operation over the internet through remote teleoperation, hence the emergence of remote operations centres in Perth (Rio Tinto, 2010) and Orange (Shields, 2010). As the prevalence of automated mines increases, opportunities for centralisation of services to multiple mines also increase. The challenge and opportunity for South Australia is to emerge as a remote services centre before a location outside the state develops this capability.

What if...?
Working in partnership, industry and Government worked to establish a technology precinct in Adelaide to support the extension of Olympic Dam through remote mining services by co-locating a range of service providers around hardwired, powerful and scalable computational infrastructure. This would include service provision in virtual reality, immersive experiential learning, infrastructure maintenance and support, communication failsafe systems, remote health provision, virtual learning environments and real time communications. Already, the Australian mining industry is preparing for a transition in skills required for the autonomous mine of the future as evident in work by organisations such as the Mining Industry Skills Centres Automation Skills Formation Strategy (McNab et al., 2011). By working with the university sector, this technology precinct could become a global training centre for remote mining. The precinct could also become a strong thought leader in managing this transition which has potentially significant implications for semi-skilled and unskilled workers who live in regional and remote areas and are not geographically mobile (Bellamy et al., 2011; Mottola et al., 2009; Parreira et al., 2009).

What would this look like?

Establishing Adelaide as a remote operations hub could take a number of forms as the services which could be provided from Adelaide are numerous. Some examples are outlined below. A virtual mining centre. The highest profile remote mining centre in existence is part of Rio Tinto's remotecontrolled mine of the future concept. Through its centre at Perth airport it can co-ordinate its mining, rail and port operations 1500 kilometres away in the Pilbara from the new centre. Staffed by more than 400 technical planning staff, controllers, schedulers and support staff, it uses video, radio and monitors to track employees and machinery. Supporting this concept are suppliers providing high end computer software and hardware services to the site as well as continued training and cultural support around virtual operational management (Co et al., 1998; Laventhal et al., 2010). Managing data overload. A challenge in the mining industry is unlikely to be lack of data, but rather too much data given that the average mining control room has the challenge of sifting through 20,000 sources of data gathered from monitoring networks all over a mine (Mining & Technology Australia, 2013a). Without the means to sort and analyse these flows, data is unable to be constructively utilised to

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contribute to decision making and performance improvements. The challenge is to present the data and information in a useful format that is easily digestible (Mining & Technology Australia, 2013a). Big Data systems are being developed to facilitate collaboration among the various silos that make up the mining and administration facilities of any operation. For example, this allows the mining team to collaborate with the process team and the geology team to facilitate more informed decision making throughout the mining process (Mining Media International, 2013). These interactions replace the traditional end-of-shift roll-up and report process typical in most mining operations (Mining Media International, 2013). TIBCO Big Data solutions are one provider of real-time technology. This technology analyses information flows, identify patterns and trigger events so operators can distinguish and view critical information (Mining & Technology Australia, 2012). Servicing automated operations. As automation infiltrates more and more aspects of the mine, specialist knowledge is likely to be required to service this equipment. In remote mining locations however, it may not be feasible to fly in these specialists to address maintenance issues (CSIRO, 2013c). One alternative that is currently being developed is ReMoTe (Remote Mobile Tele-assistance) technology. ReMoTe is able to connect remote experts with on-site operators to provide specialised and timely assistance. It operates via the use of a wearable computer with a camera mounted on a helmet and a near-eye display (CSIRO, 2013c). A video screen in the near-eye display provides a shared visual space between the remote expert and the operator, allowing the expert to point at objects and show how to perform certain actions while the operator can virtually see the experts hands (CSIRO, 2013c). ReMoTes unique combination of the immersive environment, remote collaboration technology, augmented reality, user interface and user experience technologies provides a hands-free way of connecting with experts for operational supervision in various environments Telehealth provision. Predictions about the workforce implications of automation range between significant reductions in a mine workforce and an ongoing need for on-site roles that will increase with industry growth (Grad, 2010). Recent work identifies a possible 30 to 40 percent reduction in the mining workforce (50 percent reduction in operational roles) at those operations which adopt large-scale automation (McNab et al., 2011). In this event, medical infrastructure to support the health and wellbeing of those workers who remain at the remote operational location becomes less viable, creating the opportunity for the provision of telehealth services out of the remote operations centre. Services provided out of Adelaide include the provision of telehealth services to those who remain in residence in close proximity to the operations - those who undertake essential maintenance of the sensors and sensor networks that monitor the environment both within and outside the mine. The diagnostic efficacy and cost effectiveness of telehealth services has developed to the point where these services are becoming mainstream. This is most evident in the case of teleradiology, but is also applicable to tele-emergency and telepsychiatry.

Teleradiology is now standard practice, as the quality of digital imagery is such that there is no significant difference in diagnostic accuracy between the detection of pathology in original films and digital images. In a study conducted in 1998, three independent radiologists were asked to view chest and bone radiographs in both digitised and analogue formats (Larson et al., 1998). There were no significant differences found in the sensitivities for detecting nodules, pneumothoraces, and interstitial lung disease in the chest x-rays or fractures in the skeletal x-rays. When a teleradiology project was piloted by the US Defence Force, cost analysis taking into account the cost of telemedicine infrastructure revealed considerable savings through the prevention of unnecessary evacuations and transfers (Brumage et al., 2001). Tele-emergency for minor injuries has been shown to be safe and clinically effective. A randomised controlled trial has demonstrated that the level of care provided is equivalent to, but not superior than, that provided by an on-site specialist or general practitioner (Benger et al., 2004). Cost effectiveness is dependent on comparisons with the cost of current medical practices and differences in healthcare cover.

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Teleconsultation for mental health is increasingly being acknowledged as a requirement for remote and stressful environments. Common diagnoses include post traumatic stress disorder, anxiety, depression and chronic pain but consultations can also provide cognitive assessment in alcoholics and the detection of less common psychopathologies (Pietrzak et al., 2010). Accessibility is a driving factor in calculating cost benefits, with the distance travelled by the psychiatrist the primary expense.

Many of the areas of Australia best serviced by telehealth are also those areas where fast broadband will be provided by satellite. Dods and colleagues (2012) provide an overview of the broadband implications for telehealth provision in remote Australia.

Why South Australia?

Adelaide is Australia's fifth largest city, has a significant tertiary education sector and a history of technology based services developed off the back of the automotive and defence industries (EIU, 2012). With the largest minerals development in the Southern Hemisphere (Olympic Dam) located in the state and the proactive stance of the State Government to minerals development, it has the heritage, institutions, skills and incentive to build critical mass in realising collaborative action on remote services for minerals operations. South Australia also houses world-class renewable energy sources, generating approximately half of Australias wind-powered electricity generation capacity (Climate Commission, 2013). The State is wellpositioned to expand its capacity for generation of renewable energy (Climate Commission, 2013). This could make it an attractive location for an energy-intensive remote operations and data centre.

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5.4 Intelligent processing

The challenge and the opportunity
Australia, with a history of stable government and the reputation of the high grade, high quality deposits underpinning places such as Kalgoorlie, Olympic Dam and formerly Broken Hill, has been an attractive destination for the minerals industry (Clark, 2011). However, at the same time as costs of production rise and competition grows internationally, many of these world-famous and world-class deposits are being mined out. Many deposits in Australia and elsewhere in the world remain unexploited because they are highly complex to extract and process. This is exacerbated in Australia because of high labour costs, a relatively small population and an ageing demographic profile. Inevitably, this is leading to massive pressure on the minerals sector workforce. A report by the National Institute for Labour Studies for the Minerals Council of Australia (Molloy et al., 2008) concluded that the workforce will need to increase by 68 percent by 2020 to sustain the sector. This challenge can only be met by changing the relationship between the workforce and minerals production and by achieving more with fewer people. Doing more with fewer people also addresses another Australian challenge that of increasingly strict safety regimes, with zero harm now being the goal of the industry. Additionally, with heightened calls for responsibility in mining, lower impact mining and processing technologies, integrated as part of a socially responsible industry, are required. In terms of greenhouse gas emissions, the worldwide industry produced produces more than 3.3 billion tonnes of CO2 per annum on a life cycle basis. In Australia, the sectors direct and indirect emissions accounted for 13.8 percent of the countrys greenhouse gas emissions of 576 million tonnes in 2006 (Garnaut, 2008). It is an energy intensive industry that accepts an obligation in Australia to reduce its emissions intensity. Together, these drivers herald the arrival of the era of geologically intelligent processing, where autonomous mining systems are capable of mining ore selected for grade and are able to sort ore as it is mined. Deep ore mining systems keep people isolated from the hazardous activities of drilling, explosive placement, access construction and ore haulage. Highly precise surgical mining is now possible through the use of non-explosive rock breaking and rock cutting technologies. Underground vehicles are powered by low-carbon fuels and fuel cells resulting in radically reduced emissions and mine ventilation costs. Large resources of mineral sands, alluvial gold and alluvial uranium are being mined with minimum impact on other land uses using keyhole mining techniques. The opportunity for South Australia is in using ICT and the data interoperability skills for advanced resource characterisation to integrate existing capabilities and lead new applied research to advance the goal of a fully integrated intelligent processing plant that provides feedback into the common mine model and allows for adaptive operations.

What if...?
South Australia were to develop control systems that integrate seamlessly with the common mine model to allow near real-time control of both excavation and processing at an increasingly granular level. This would be linked to the advanced resource characterisation capabilities discussed in relation to precompetitive data.

What would this look like?

The chemistry-free laboratory. ICT enables a suite of analytical services to be embedded within an operational process. Appropriate sensors (using a range of spectroscopic techniques) can be integrated into the process workflow to feed back information on ore grade and process performance in real time as ore content moves through the processing plant. This data can be simultaneously be fed back into the geometallurgical mine model and used to modify operations by shifting excavation away from areas of low grade ores and deleterious materials to areas with higher grade ores. Intelligent information processing. Intelligent processing plants can sort and selectively process ores by grade based on external conditions such as commodity spot prices, current transportation and shipping costs, etc. Under current operating set ups, market information is likely to be stored in different systems to
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ore processing data. Thus decisions on product processing cannot be easily informed by information regarding market conditions such as commodity prices and sales contracts in real-time. By factoring realtime market information into processing decisions, production processing can be more effectively managed and traditional bottlenecks can be avoided. Expert control systems. Transparent and accurate real-time expert control systems can manage every aspect of the production cycle. For example, with Australias mineral resources becoming increasingly complex (lower in grade and with a more distributed and intricate mineralogy), grinding to full liberation is becoming a difficult and extremely energy intense process that cannot always be economically afforded, heap leaching operations are increasingly becoming the process option of choice. Such leaching operations are presently rather low-tech and unsophisticated, hard to control and extremely slow. Application of ICT has the potential of fundamentally changing that situation, by turning leaching into a smart, high-tech, and tightly controlled processing route for Australias minerals. How this might work is as follows. An ore heap is designed such that it is equipped with spatially distributed multi-parameter sensors that measure, in real-time and spatially resolved, parameters that are known to influence leaching behaviour, such as temperature, pH, metal ion concentration, oxygen and CO2 levels, etc. The spatial and temporal Big Data thus collected by this sensor network are analysed in real time and compared with sophisticated computer models of the heap operation, running in parallel, i.e. in, or close to, real time. A cleverly engineered system of transport lines and valves allows for the (semi-continuous) spatial adjustment of process parameters, keeping the overall operation within its optimal process window. A concept like this would critically build on a range of ICT capabilities sensors and sensor networks, computer modelling, communication strategies, decision systems, Big Data analysis, with a strong emphasis on measurement and control. New paradigms in processing. Other new paradigms in the processing area could include:

In-situ mining brings us closer to the concept of the invisible mine and allows access to deeper resources without the environmental damage associated with open cut mines; Dry processing techniques allow for new projects to begin that were previously unfeasible due to lack of access to affordable process water; and Biological agents change the way we break down complex mineral assemblages.

Why South Australia?

South Australia has already established itself as a pioneer in the acquisition and dissemination of precompetitive data to encourage exploration through its Plan for Accelerating Exploration (PACE) initiative and its South Australian Resources Information Geoserver (SARIG) data delivery portal. Through PACE, mining companies have access to new online geosciences databases and minerals systems analysis to help identify pathways for new mineral exploration (Government of South Australia, 2013). The PACE initiative has been recognised globally as one of the most innovative government minerals resources initiatives (Government of South Australia, 2013). South Australia also has strong tertiary and research providers in minerals processing through the Ian Wark Research Institute. At The Wark, research is focussing on a systems minerals processing whereby minerals resources are explored and mined in a more efficacious manner and processed in more sustainable and energy efficient ways with a minimum ecological footprint and a high level of social acceptability (Follink, 2013). This will be achieved though the integration of relevant mineral ore characteristics, individual physical and chemical processes and unit operations, their inter-dependency and the plant performance for prediction, optimisation and maximisation of product yield and recovery (Follink, 2013).

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5.5 Human/Machine Interaction

The challenge and the opportunity
Despite decreasing levels of human involvement with increasing automation, humans continue to play an important role in systems operation, especially in terms of coping with unexpected situations (Lynas et al., 2011; Sheridan, 2002). Traditionally, remote operation in industry has involved video being transmitted to a remote operator, who makes decisions based on the visual evidence and responds by commanding the equipment to take action (i.e. tele-operation). Unfortunately, for many mining applications, this type of interface does not offer the human decision-maker sufficient situational awareness to effectively maintain manual production levels. This has in some instances limited the applications for remote operation of mining equipment over maintaining a human presence at the operational face. The opportunities emerge where ICT enables the situational awareness and communications necessary to manage precision operations, by often large pieces of equipment to significant standards of accuracy. Additionally, automation can introduce new sources of stress, such as information overload and boredom and new risks such as automation-induced complacency, over-reliance on and poor understanding of automated equipment and poor communication and coordination between automated equipment and human operators, including human intervention during system failure (McNab et al., 2011). Such sources of risk have been observed across the aviation, transportation, medical, manufacturing, materials handling, nuclear power and processing industries by Lynas et al. (2011). There is also a degree of disconnect in understanding the physical scale and impact of decisions if these decisions are made remotely as there is no immediate or haptic feedback related to the decision. ICT based opportunities exist to relieve the stress, repress the boredom and enhance the human-machine interaction.

What if...?
South Australia established itself as the world-leading solutions provider for human and autonomous systems interactions. These technologies are able to be specifically developed and tailored to the specific needs of a companies operating environment. Via these technologies, humans and machines are able to interact seamlessly to ensure the optimisation and efficiency of processes while guaranteeing the safety of human operators and the best use of automated equipment.

What might this look like?

Safety monitoring and process optimisation. Human behavioural monitoring sensor suites track potentially hazardous human physiological conditions. Feedback from these sensors can then be used to alert the operator to implement the best course of action given the circumstance. This aspect of monitoring focuses on the human component only. Further to this, real-time environment monitoring tracks both autonomous and human-controlled machines to look for potentially dangerous interactions. Tracking will provide the necessary feedback and control for safe interactions between autonomous and human processes. In addition to safety measures, real-time tracking can also help optimise processes. Human, machine and environment data is tracked and can be analysed to look for optimisation points and improvement to safety procedures. Fuel consumption is one possible point of optimisation. Operators can influence overall fuel economy by as much as 35 percent (Bennink, 2008). Driving a truck in a stable and consistent manner is able to minimise fuel consumption however this is unlikely at the end of a 12 hour shift (Parreira et al., 2009). Automation has the potential to operate trucks more consistently. Augmented reality and learning systems. Augmented reality allows humans to remotely control semiautonomous systems. As the level of automation increases however, the required human input can become tedious and repetitive. Augmented reality processes can also be used as an input into gamification to remove the tedium from such highly repetitive human-centric processes. As part of this process, learning systems allow autonomous systems to learn from human operators to increase the efficiency of the automated element of the operation. Neural networks can also allow autonomous systems to learn and adopt optimal behaviours by analysing past activity. Simulation and training services. A successful example of the opportunity afforded by the advent of remote operations is Immersive Technologies, a global company grown out of Perth which provides
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simulator training solutions. Immersive Technologies reputation is evidenced by the loyalty of the leading Original Equipment Manufacturers (OEM) including Caterpillar, Liebherr, Komatsu, Hitachi Construction Machinery and P&H Mining Equipment. These OEMs exclusively support the development of training simulators by providing access to confidential machine information (Immersive Technologies, n.d.). The resulting product is therefore tailored to the specific needs of the OEM.

Why South Australia?

South Australia already has capabilities in autonomous vehicles and robots and augmented reality technology (Follink, 2013). These capabilities are mainly located within the University of South Australia (Defence Systems Institute, School of Information Technologies and Mathematical Sciences), Defence Science and Technology Organisation, Flinders University (School of Computer Science, Engineering and Mathematics and Medical Device Research Institute) and the University of Adelaide (Australian Centre for Visual Technologies) (Follink, 2013). Automation manufacturing capabilities also exist in the State. For example, SAGE Automation is a privately owned South Australia manufacturer that specialises in complex control and automation projects (Government of South Australia, 2013). The use of automation in mining will create demand for a highly trained and specialised workforce. Since opening in 2007, the University of Adelaides School of Mining Engineering as already grown to be the second largest centre for Mining Engineering training in Australia (Government of South Australia, 2013). Through its existing partnering with institutions including the Kalgoorlie School of Mines and the University of New South Wales as well the Minerals Council of Australia (Government of South Australia, 2013), the School of Mining Engineering already has the potential to closely align its training with industry needs to produce the requisite skills required in the future mining workforce.

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5.6 Crowdsourcing regulation

The challenge and the opportunity
The World Economic Forum report (WEF, 2011) reviews the principles for Responsible Minerals Development and identifies six key building blocks: 1. Progressive capacity building and knowledge sharing among all stakeholders; 2. A shared understanding of the benefits, costs, risks and responsibilities related to mineral development; 3. Collaborative processes for stakeholder engagement throughout the life cycle of mining projects; 4. Transparent processes and arrangements; 5. Thorough compliance, monitoring and enforcement of commitments; and 6. Early and comprehensive dispute management. These building blocks reflect best practice principles from a number of other sources including the International Council for Mining and Metals, the Global Reporting Initiative and the Extractive Industry Transparency Initiative. With the advent of social networking, coupled with our ability to analyse data and crowd source solutions through the internet, ICT has a unique opportunity to support these principles of transparency, sharing and a platform for dialogue and monitoring (Wellman et al., 2002). At the same time, mining companies are using advanced sensors and data analytics tools to gather an increasingly large amount of environmental data at the mine site. Many of the environmental conditions, such as water tables, soil cover, being monitored have the potential to impact local communities. The notion of crowd-sourced regulation captures the shifting dialogue between operations, Governments and stakeholders. It enables data on the performance of a mining operation to be sensed, analysed and made publically available through sensors and sensor networks coupled with an information platform and portal. Coupled with event recognition and pattern analysis software, environmental impacts are better able to be anticipated and addressed proactively. Through this transparency, coupled with formalised processes of dialogue and consultation, not only are local communities better empowered to understand the operations that exist on their doorstep, but they can also engage with the operations to improve performance through a constructive dialogue.

What if...?
South Australia invested in a world-leading information platform streaming real-time environmental performance data from the Governments website to a publically available system backed up by policy and practice. This website would require mining companies to release detailed environmental data to the public through a government portal. This will present opportunities for South Australia ICT companies (especially SMEs) to develop a wide range of data analytics, visualisation and reporting tools that operate against this data.

What would this look like?

An information platform as a vehicle for dialogue. As an example, the data.gov initiative of the US Federal government has established a platform that makes available a wide range of datasets (including environmental data) to the public (www.data.gov). The purpose of data.gov is to increase public access to high value, machine readable datasets generated by the Executive Branch of the Federal Government and it reflects a decisive step towards the principles of participatory democracy (Dryzek, 2000) where public participation and collaboration build consensus and assist trade-offs on behalf of society. Off the back of the data presented on this site, many tools and visualisations have been developed using data analytics. Collaborative tools to develop metrics for site performance. Through ICT-enablement, greater input into the datasets of most interest to the local population can be gathered and addressed as they change over time. For example, the South Australian government can prioritise the tools for data analysis based on community input. For example, a tool that allows 3D visualisation of the water table and water flows for a

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particular plot of agricultural land would allow the farmer to visually see the impact that a mines water usage is having on his land. Environmental sensing and sensor networks (Hart et al., 2006). At the heart of the notion of crowdsourced regulation is the availability of data regarding the performance of the operation. It is assumed that this data is accessible, together with its open and transparent monitoring and assessment for environmental performance both in terms of impacts and also for patterns that may be lead indicators for a particular event. The source of the data is an Environmental Sensor Network (ESN). These networks have evolved from passive systems (logging events in situ onto data stores which can be downloaded using some form of manual intervention) into intelligent sensor networks (comprising a network of automatic sensor nodes actively communicating with a Sensor Network Server (SNS)) where these data can be integrated with other environmental datasets (Hart et al., 2006). ESNs range in scale and function. Large Scale Single Function Networks tend to use large single purpose nodes to cover a wide geographical area whereas Localised Multifunction Sensor Networks typically monitor a small area in more detail, often with wireless ad-hoc systems (Hart et al., 2006). Biosensor Networks use emerging biotechnologies to monitor environmental processes as well as developing proxies for immediate use (Hart et al., 2006). All are potentially relevant contributors to different aspects of environmental monitoring around a mine site and also the assessment of cumulative impacts across a region. Regardless of scale and function however, these sensor network will offer a cheap, reliable and robust system for performance monitoring.

Why South Australia?

South Australian universities already have ICT capabilities in sensors and sensor networks (Follink, 2013). Further development will build upon these existing capabilities and capitalise on the established research skills in the State. These capabilities are mainly located within Flinders University (Medical Device Research Institute, Centre for NanoScale Science and Technology), University of Adelaide (Institute for Photonics & Advanced Sensing), University of South Australia (Institute for Telecommunications Research) and the Deep Exploration Technologies Cooperative Research Centre (Follink, 2013). The close proximity of these locations give South Australia an advantage given that clustering is able to facilitate growth and the innovation (Government of South Australia, 2013). Recent discussion at the Wark Institute have centred around the need the employ statistical-analytical methods to make use of the data collected through sensors and sensor networks (Follink, 2013). Advancement of these methods will facilitate the data availability underlying crowd-sourced regulation.

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6 ICT Scenarios for Energy Resources

This section outlines five discrete scenarios for South Australia in Energy Resources (Figure 31). These are illustrated below, mapped against both the value chain for energy resources and the business drivers that they best address. These scenarios are not mutually exclusive and many have significant overlap and synergies.

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Figure 31. Specific scenarios for South Australia mapped against the value chain

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6.1 Advanced reservoir simulation

The challenge and opportunity
The acquisition and availability of geoscientific data is no longer the limiting factor in geological interpretation and resource characterisation (Duffy et al., 2006). Intense innovation in our ability to measure properties and sense our environment faster, cheaper, remotely and continuously has led to an explosion of data availability (Reitsma et al., 2009). It is now within our ability to collate and interpret this data in many varying dimensions to understand the resource that constrains the exploration and characterisation process. The opportunities for ICT to assist in data collation, integration and interpretation are significant. Some of these opportunities are already being developed, particularly in the area of data acquisition, data storage and geological simulation. Expenditure in the exploration stage tends to be high risk, given that not it will not generate any revenue if oil and gas are not found or if the reserve is non-commercial (Productivity Commission, 2009). Technology that can reduce costs and increase confidence at the exploration stage is highly prospective. For this reason, technologies such as 3D seismic and horizontal drilling are key technologies that have reduced the costs in both the exploration and production stages (IEA ETSAP, 2010). The new lightweight, rapid and portable drilling sensors and techniques developed by the Deep Exploration Technologies Cooperative Research Centre will allow for cheaper and more accurate geological data to be collected (DETCRC, 2012) and unmanned aerial vehicles and airborne sensors allow for ultra-high-resolution geo-physical data capture (Hewson et al., 2010) However, the full potential to transform efficiency and accuracy in resource characterisation through integration and data interoperability is yet to be realised. Currently, human interpretation and integration of data is the norm. Some data interoperability is enabled through software languages such as the GeoSciML code (CSIRO, 2013b) which enables comparability between differing datasets, measured on differing scales. Trial and error is used to discover relationships between observations and useful knowledge. This is coupled with the interpreters experience and knowledge with success being highly dependent on the precedence of the observed system behaviour and the skill of the interpreter. In many circumstances more data is available than is used in interpretation as a result of limitations in technology and interpreter capacity. Single models are generally produced and the update cycle when new data arrives is slow. Emergent ICT technologies can enable far greater levels of computational augmentation of human interpretation. The use of algorithms that automate handling of large datasets, the application of high performance data systems coupled with large data stores, access to data governed by open standards to ease the integration burden (for example via the Spatial Information Services Stack (SISS)) and the inclusion of qualitative data all increase the knowledge base. Data mining, machine learning and signal processing techniques can be used in a generic fashion to discover data-driven relationships across multiple data types. In this way, final human interpretation is then used to create the full model with the assistance of the pattern analysis and the analytics capabilities emerging as a result of the advent of big data and statistical inference. However, these advanced ICT enablers will change the skill set required of the geologist. Although data integration and interoperability through ICT augments the geologists ability to understand the ore body, it simultaneously reduces the data entry, data cleaning and data analysis components of the role which often form the training ground for early career geologists (Hutchinson, 2001).

What if...?
South Australia pioneered the next level of maturity in data integration by demonstrating the efficiency and accuracy that can be achieved by greater levels of symbiosis between computational analytics and human experience. Computational simulation used probabilistic inversion techniques and rapid model generation to realise multiple possible models that are constrained by the observations and human hypothesis.

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What would this look like?

Uncertainty quantification would be used to understand where additional data would improve the models, hence defining priorities for data acquisition. In addition, algorithms can be used to derive proxies for important rock properties (that are otherwise expensive or difficult to obtain) from qualitative interpretation. In its most advanced state, model predictions would then be then tested against human hypothesis, physics and observations (e.g. will it produce the folds and fracture patterns suggested in the observations).
Achieving this requires:

Data integration with numerous targeted GIS, analysis and visualisation packages Databases that are content queryable and the filtered delivery of 3D/4D data Common information management and curation practices from a range of data custodians and data acquisition service providers A new relationship between the geologist and numerical simulation New ways of measuring value from data and agreed relationships between proxy data and important measurements Processing capacity that exceeds desktop computational systems, drawing in cloud and HPC facilities.

Why South Australia?

With existing (major) energy companies in South Australia, as well as resource mapping and modelling ICT vendors and the PACE initiative from the State Government, South Australia is already advanced in its modelling and mapping capabilities. Coupled with the presence of defence sector researchers (BAE, DSTO) and university sectors such as IMER specialising in electrical geophysical and image analysis, there is an innovation pipeline already in existence in the state. This is complemented by the drilling research being undertaken by the Deep Exploration Technologies CRC.

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6.2 Monitoring and control

The challenge and opportunity
The intelligent oil and gas field vision is to access oil and gas resources in remote locations and then extend the application to other oil and gas facilities. To progress this vision, a greater need for remote information retrieval and autonomous inspection from within the field is required. Therefore, the challenge is to create technologies that realise the following paradigm shifts in the oil and gas industry for development of unconventional resources, such as: 1. Routine inspection and monitoring of entire field relying solely on the use of inexpensive and intelligent technologies. 2. Remote control of production systems. 3. Unwired field condition, environmental and process monitoring and control using vast wireless sensor networks, both mobile and stationary. Some areas that can potentially contribute are:

Real-time monitoring and data transmission from the entire field to office; New low cost and reliable sensors; Distributed sensor networks and communications protocols; Data logging and information retrieval; Autonomous monitoring, inspection and repair; and System control.

Monitoring and control systems will be at the core of any intelligent field concept because information of the status of the field operations and different facilities (from wells to production and handling facilities) is critical to assess the performance of the systems. Also the information will be needed to evaluate different actions to optimise and manage production of oil and gas from well to customer. The oil and gas industry has been working in the e-field concept for many years but there are still gaps in sensors devices and sensing networks technology to allow low cost and reliable monitoring and control systems.

What if...?
Industry and government worked to establish a technology precinct in Adelaide to support the development of technology to monitor and control remote gas production operations and technical services by co-locating a range of service providers around a cost effective, highly reliable, hardwired, powerful sensor/actuator network and communication infrastructure.

What would this look like?

This would include continuous operational service provision in real time mode, infrastructure maintenance and support, communication failsafe systems, remote control provision and real time fast communications. Already, the oil and gas industry is developing surveillance and technologies required for the intelligent oil and gas field of the future (Al-Dhubaib et al., 2008; Mikkelsen et al., 2013; Vignati et al., 2013). By working with the university sector, this technology precinct could become a global training centre for intelligent fields operations.

Why South Australia?

South Australia has an existing highly skilled labour force used to working with automation in the automotive and manufacturing sectors. Coupled with the South Australian defence sector, businesses are positioned to develop secure failsafe communications networks and protocols that link operations centres with global operations and to build architecture with the necessary reliability, scalability and extensibility. Within the university sector, centres such as the Australian centres for photonics and advanced sensing, the centre for physical technologies for context based mage analysis and the Australian Centre for Visual Technologies are developing technology to integrate signals from multitude of surveillance cameras commercial 3-D interfaces exist.

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6.3 Production optimisation

The challenge and the opportunity
Development of the huge unconventional gas resources coal bed gas and shale gas will need the drilling of a high number of wells at locations where advance reservoir characterization tool indicates high probability of finding sweet spot. The high number of location and number of wells will require a large surface infrastructure with capacity to handle unwanted produced fluids (such as water) or to carry out work over operations in wells to increase production. Optimising recovery involves methodologies/technologies for real-time management of field operations along with the development of i-field tools for reservoir scale monitoring and diagnosis that integrates realtime well data with 4D seismic. A recovery optimising system will include: (1) integrated system for realtime field operations follow-up, production optimisation and control, history match and forecast; (2) tool for prediction of saturation and pressure from 4D seismic and EleMag; (3) integrated water management system, including water production prognosis and control, time-lapse monitoring and diagnostics, and innovative use of the water for value creation. The system will need to integrate the diverse technology scenarios discussed in this document from advance reservoir modelling to smart operations along with management and analysis of data collected through the extensive monitoring network (subsurface and surface) linked an overall field production model to simulate (1) the performance of the different components to compare with the production data and (2) evaluate diverse course of action to optimise and improve production (3) carry out actions on the process by remote control of operations. The system should be able to run continuous very fast simulations of the all field operations and reservoir updates that are needed to take actions to improve production. The ultimate goal will be to have autonomous or semi-autonomous production systems that will allow for a reduction in the number of personnel needed to develop gas/oil fields in remote locations.

What if...?
Industry and Government worked to establish a technology precinct in Adelaide to support the development of technology to optimise remote gas production operations and technical services by locating a range of service providers around a cost effective, highly reliable, powerful process and flow simulation infrastructure. This would include continuous service provision of real time monitoring of subsurface and surface facilities, infrastructure maintenance and support, communication failsafe systems, remote control provision and fast communications networks. Already, the oil and gas industry is developing production optimisation technologies/methodologies required for the intelligent oil and gas field of the future (Airlie et al., 2004; Boomer, 1995; Popa et al., 2005). By working with the university sector, this technology precinct could become a global training centre for intelligent fields operations.

What would this look like?

A number of technologies are crucial in the production of gas. Well integrity is a key risk in the extraction of gas, particularly the integrity of cement seals, and pressure sensors are used to detect leakage from the product casing (Cook et al., 2013). A range of sensing technologies are used to monitor in real-time the subsurface propagation of hydraulically induced fractures, such as microseismic, tiltmeter and pressure sensors, temperature and flow logging, tracers and proppant tagging, fibre-optics and photography and 3D seismic methods (Cook et al., 2013). Different systems would be required for different forms of unconventional gas since Australian shale gas is typically located at depths in excess of 3000 metres, considerably greater than CSG (Cook et al., 2013). In addition, shale is significantly less permeable and less porous than coal such that the extensive hydraulic fracturing is required for gas extraction (Cook et al., 2013). Low areas of permeability may see hydraulic fracturing increase from current levels of around 10 percent up to 40 percent (Rutovitz et al., 2011). The number of drill rigs required is a function of the drilling rig productivity, as well as the timing for well completion and hydraulic fracturing (Cook et al., 2013). There are currently only two rigs in Australia that are capable of completing the drilling and fracturing work required for shale gas (Cook et al., 2013). Given
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the differences in depth of shale gas wells and CSG, the drilling technology in Australia for CSG is unable to be used for shale gas (Cook et al., 2013), thus limiting the transferability of infrastructure between unconventional and conventional gas extraction. An aspect of this scenario is the creation and support of shared infrastructure and services for Tier 2 companies to simulate domestic supply chains.

Why South Australia?

Adelaide has a significant tertiary education sector and a history of technology based services developed off the back of the automotive and defence industries. With a proactive stance of the State Government to the ICT sector development, it has the heritage, institutions, skills and incentive to build critical mass in realising collaborative action on remote services for oil and gas operations. Australia has significant unconventional gas resources, including CSG, tight gas and shale gas (Geoscience Australia and ABARE, 2010). Total identified resources of CSG are around 168,600 PJ, while tight gas resources are estimated at around 22,000 PJ (Geoscience Australia and ABARE, 2010). In South Australia specifically, the most advanced unconventional gas projects in South Australia are located in the Cooper Basin and include reserves of shale gas, tight gas and deep coal seam gas (DMITRE, 2012). There are also unconventional gas plays in the Cooper, Arckaringa, Pedirka, Eromanga, Otway, Simpson, Officer and Gambier Basins (DMITRE, 2012). Thus South Australia has significant potential to meet future demand for unconventional gas demand. As such, development of production optimisation techniques will ensure the maximum value is realised from these reserves. With major energy companies such as Santos and Beach Energy located in South Australia, state experience in both vertical and long reach drilling, the Moomba facility already accepting production from multiple gas and oil fields and existing pipeline infrastructure, many services and systems are already in place for continued optimisation. Within the university sector, there is research on defence and systems integration and also interoperability systems for oil and gas using fundamental computational research. Additionally, nanoscale research on the behaviour of chemical surfaces offers potential for significant flow optimisation in the gas sector.

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6.4 Smart information platforms

The challenge and opportunity
The Productivity Commission (2002) has estimated that ICT applications impacted national productivity growth by 0.2 percentage points per annum, an important contribution within the context of Australian multifactor-productivity (MFP) growth of 1.8 percent per annum during the 1990s. Impacts observed in major ICT-adopting sectors, such as financial Smart Information Systems, were even more pronounced. One recent report estimates that the adoption of smart technology in energy, water, health and transport and the roll-out of high-speed broadband could add more than 70,000 jobs to the Australian economy and 1.5 percent to the level of Australias Gross Domestic Product within a few years (Access Economics, 2009). If this enhanced digital productivity is combined with the concept of the i-field and the ability of smart information systems to perform systemic risk analysis based on pattern analysis and recognition, the opportunity for new digital control systems to run computationally all aspects of an operation is attractive. If enhanced i-field is combined with the ability of smart information systems to perform processes performance analysis and systemic risk analysis based on pattern analysis and recognition, the opportunity for new digital control systems to run in an autonomous/semi autonomous way all aspects of an operation is attractive. However, this new and emerging use of technology with increased reliance on electronic delivery of critical and commercially sensitive information carry concerns around security and privacy. There is a need to increase consumer and business confidence through improved solutions for the safe and protected handling of highly sensitive commercial and technical information. Even though the oil and gas industry has invested a lot of effort to improve the use of information technologies in its business, there is still a big gap regarding the handling and managing of ultra fast systems for transmission and processing of collected data. Aggravating these problems are alarming declines in the number of students choosing careers in mathematics and computer science (Lyons et al., 2010). Critical issues to address include:

A focus on raising awareness of Smart Information Systems in the manufacturing sectors. Often small or boutique manufacturers are not aware of the range or potential of information rich tools or systems; Providing assistance to SMEs to introduce Smart Information Systems into their unique processes; Fostering links between the National Innovation System and SMEs; Developing a workforce skilled in use of Smart Information Systems; and Addressing ICT literacy within the education system to develop early stage understanding of the role of ICT within many sectors of the economy including manufacturing.

What if...?
Industry and government worked to establish a technology precinct in Adelaide to support the development of technologies to collect, transmit and process high volume of data at high speeds and storage sensitive data from operations and process analysis in a very secure and highly protected manner by locating a range of service providers around a cost effective, highly reliable, powerful data handling and management infrastructure. Additionally, it could also contain algorithms derived from the finance sector looking for patterns that could represent risks to the operation which could be in externalities (spot price, conflict) or in internalities to do with the operation.

What would this look like?

The cloud provides a new paradigm for delivering computing resources to the gas sector on demand, in a similar manner that utilities provide water, electricity or gas. Cloud computing architectures and software infrastructure enables the advent of Smart Information Systems which are differentiated from Ordinary Information Systems in that they must meet the following key requirements (VeriSign, 2004):

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1. Scalability: Dramatic increases in the size of a network or in the level of use have always been a source of complexity. For example, the number of actual devices connected to the Internet is expected to climb to over 50 billion by 2020 (Vestberg, 2011). 2. Interoperability: Any Smart Information System should enable mediation between different protocols, as well as mediation between multiple providers and devices. Smart Information Systems operate to shield the end user from the underlying complexity of the network. 3. Adaptability: Smart Information Systems should be designed to adapt to new developments in public good, commerce and communications as they occur and be flexible enough to meet the reality of a constantly evolving form and functionality. 4. Availability: As critical transactions (such as legal, supply chain, and financial transactions) are processed across digital infrastructure and as that infrastructure becomes the basis for increasingly high-value and high-volume transactions, the service must maintain high levels of reliability and availability. However, since design decisions to increase availability and reliability frequently come at the expense of adaptability, this requirement will generally pose a significant challenge. 5. Security: The key role that Smart Information Systems play in coordination, control and safety can make them a target for disruption of the underlying communications and information management. Therefore Smart Information Systems will need to be built in a manner that makes them exceptionally resistant to physical, logical, network and social engineering attacks. 6. Visibility: The intelligent collection, correlation, and interpretation of data in multiple formats from multiple sources are generally at the heart of any Smart Information System. A Smart Information System therefore must be able to provide visibility into usage, trends, and anomalies throughout the entire operating network as well as any larger network of which they are a part. Specific advantages of these smart business systems for the resources sector include, for example:

Inventory and asset management systems that can be used to provide a better understanding of the level of raw materials used, the cost of manufacture, the amount of waste produced, the supplier and selling prices. Reporting systems can be extended to include modelling and scenario planning to optimise the production processes, or to support customisation. Plant and equipment used in a production can be fitted with low cost sensors to provide a view of operating performance and highly localised operating conditions. When networked, this can be extended to provide a real time understanding of the entire production process. Individual products or subassemblies can be fitted with radio tags and micro-devices to offer a means of tracking and recording the whole lifecycle of the product

Why South Australia?

The ICT capabilities in the Institute for Minerals and Energy Resources at the University of Adelaide have already begun to explore the inclusion of finance information in mining ICT application. MINVEST is a commercial software package that resulted from expertise in financial evaluation and risk assessment of mining projects (Follink, 2013). SolveIT Software (Schneider Electric) is a leading Australia enterprise software firm specialising in supply and demand optimisation and predictive modelling across the resources value chain. Within the Teletraffic Research Centre, analytics are used to forecast optimal pricing and scheduling and there are multiple additional applications of this algorithmic capability. Similarly strong university capabilities in agent-based modelling and object-oriented programming are available to develop software packages for complex multistakeholder project management, decision-support tools.

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6.5 Environmental monitoring

The challenge and the opportunity
The major oil and gas discoveries are often in very sensitive environmental areas such as farm land for coal seam gas or deep water marine environments for off-shore fields. The growing awareness of the impact of human society on the environment has led companies to become increasingly concerned about reducing environmental impacts. Some of the potential environmental impacts from oil and gas production operations are: sea floor disturbance, drilling waste, accidental oil, gas or non petroleum fluid release, soil contamination, water sources contamination, flaring of gas, etc. This is only natural given the growth in recognition of the need for projects to be environmentally sustainable. A significant recent example is the Barrow Island turtle management program imposed on the Gorgon project proponents. Nowadays, the oil and gas industry has greatly improved the management of the environmental risks associated with their production operations in order to comply with very tight environmental regulations which usually include very extensive monitoring programs. Monitoring and control systems will be at the core of any continuous environmental risk assessment program because information about the status of pollution of the areas (marine, terrestrial and air environments) in and around production operations (from wells to production and handling facilities) is critical to assess the performance of the pollution control and management systems. Also the information will be needed to evaluate different actions to minimise potential risks arising from day to day production operations. The oil and gas industry has been working in environmental monitoring systems for many years but there are still gaps in sensors devices and sensing networks technology to allow low cost and reliable monitoring systems.

What if...?
Industry and government worked to establish a technology precinct in Adelaide to support the development of technologies to monitor environmental variables in remote gas production operations and technical services by co-locating a range of service providers around a cost effective, highly reliable, hardwired, powerful sensor/actuator network and communication infrastructure focused on environmental issues such as: water-air-soil quality, leak detection, etc. This would include continuous operational service provision in real time mode, infrastructure maintenance and support, communication failsafe systems and real time fast communications. Industry is currently investing a lot effort in the environmental monitoring of its operations as a lesson learned from the Macondo Well Disaster in the Gulf of Mexico.

What would this look like?

Sensors, sensor networks, predictive analytics and social media give shape to this scenario. Environmental sensing data is transmitted in real time to analytical software that can look for lead indicators of risk. Advanced sensors monitor terrestrial, marine and atmospheric conditions. Many of the environmental conditions being monitored have the potential to impact local communities water tables, soil cover, etc. With the application of social media, this information can be made highly transparent to a wide range of stakeholders. Under this scenario, data about the environment is collected from the earliest stages of a projects inception and, as a result, the regulatory and approvals processes can be streamlined. Similar to the data.gov project sponsored by the US Federal government, this scenario makes a wide range of datasets (including environmental data) available to the public and enables the South Australian government takes a leadership position in crowdsourcing regulation by adopting regulations that require oil and gas companies to release detailed environmental data to the public through a government portal

Why South Australia?

The existing oil and gas companies are already using advanced sensors and data analytics tools to gather greater environmental data. Further back in the innovation pipeline, the Institute for Photonics and Advanced Sensing is exploring interfaces to enable exploration of big data.

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7 Conclusion

This report describes scenarios for South Australia to build capabilities in ICT in support of the minerals and energy resource industries. ICT plays an important role in the value chain for both minerals and oil and gas resources. Little economic value can be realised from a resource in the ground unless it can be located, extracted, efficiently separated from waste materials and then processed into a useable form to be transported to the marketplace to fulfil demand. ICT is able to assist the development of a resource so the maximum economic value can be realised. Currently, the resources sector is facing significant challenges and opportunities. Traditional business models are being challenged. This report describes six megatrends which describe a narrative view of these changes. These changes will continue to play out over coming decades and present significant challenges and opportunities. These megatrends describe a resources sector that primarily seeks productivity improvements and cost reductions. Environmental performance, health and safety and social license to operate will also play a significant role. As such, a greater emphasis is likely to be placed on know-how, skills, knowledge and information systems that help others develop their own resources. Given these megatrends, scenarios were developed by which to illustrate the role that the ICT sector could play in realising maximum potential in the resources sector. South Australia already has capabilities in the application of ICT in the resource sector. These scenarios therefore present opportunities for the ICT sector to draw upon existing capabilities to overcome the challenges and harness the opportunities. South Australia has already established itself as an exporter of copper, uranium, iron ore, zinc, lead and oil. It also has a wealth of natural resources in Olympic Dam that are yet to be exploited. However, relying on traditional business models is unlikely to see these resources developed to their best use. Paired with a strong research sector and diverse information technology industry, South Australia is well positioned to take advantage of the next wave of growth. However, South Australia will not be the only resources region wanting to catch this wave. Many other regions within Australia and the world will also be lining up. Strategic and swift actions by government, industry and community sectors can allow South Australia to capture this opportunity.

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Appendix A Methodology

A.1

Project Components

The methodology for this project combined scenario planning with an analytic-deliberative assessment of South Australias expertise and capability to identify strategic opportunities for South Australia. Our process loosely followed the scenario development process used generically by the World Economic Forum and applied specifically to their development of Scenarios for Mining and Metals project (WEF, 2010). More specifically, it mapped four discrete elements of work into a conceptual framework identifying prospective opportunity spaces for South Australia (Figure A1). We have adopted the ideals of scenario planning, with a strong focus on the development of megatrends.

Figure A1. Comparison of the project

A.2

Megatrends and Scenarios

Companies and governments use scenario planning to explore future events and proactively plan for change. The field received a major boost when the energy company Shell commenced research in 1972 led by Pierre Wack. Shells work pioneered the current day application of scenario planning. Company reports argue that scenarios helped them successfully navigate the highly disruptive oil price shocks of the 1970s. Similar observations are made by external observers with several write-ups in the Harvard Business Review (Cornelius et al., 2005; Wilkinson et al., 2013). In 1972 a Shell Scenario report warned of a sharp rise in prices resulting from increasing oil scarcity, which may take place at any moment in the next few years.

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Shell still uses scenario planning today. The company describes scenarios as lenses that help us see future prospects more clearly, make richer judgments and be more sensitive to uncertainties (Shell, 2012). The process of scenario planning involves some type of drivers/trends analysis and the subsequent construction of narratives about possible future states (Shell, 2012). The future of the resources sector was explored using the concepts of megatrends and scenarios (Figure A2). Megatrends and scenarios are defined as:

Megatrend: An important pattern of change in the social, economic, environmental, technological and/or political context within which the mining services information technology industry operates. Scenario: A plausible description of the industry at a future point in time, in this study the year 2025 has been chosen.

Scenario
Megatrend B

Space

Now

The Year 2025

Figure A2. Looking into the future with business drivers and scenarios

The concept of megatrends and scenarios are shown above using a futures cone. This is widely applied within the field of foresight (Voros, 2003). The diameter of the cone at different time periods is inversely proportional to the level of certainty. At the current time the diameter is zero and the cones circle is a pinpoint. That is because if we can access the data we have complete certainty. However, as we move into the future the circles diameter increases and certainty decreases. The scenario space, within which possible future states can be defined, grows accordingly. Megatrends occur gradually over time but have the potential to substantially reshape the business environment over coming decades. The megatrends establish the context for the future information technologies demanded by the minerals sector As such, megatrends may be thought of as beams of light which illuminate parts of an unknown future object. We describe that future object using scenarios. Because the future object is only partially illuminated the scenarios are narratives about plausible futures. Using this concept of the futures cone, multiple scenarios are possible (Davis, 2002). In many scenario planning exercises, the outcome is a range of scenarios which represent alternative possible futures depending on how the megatrends play out in reality. For this project however, we developed normative scenarios for key aspects of the resources sector. A normative scenario is a single narrative of a component of the future and provides a vision which can be worked towards through strategic planning and decision making (Figure A3)

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Figure A3. Types of scenarios Source: Davis (2002)

A.3

Developing the scenarios - an analytic-deliberative approach

The megatrends provided pointers towards options for the future. They were used to guide the development of ideas about specific opportunities for South Australia. These opportunities were then developed into scenario descriptions through consultation with experts. This consultation combined analysis of historical trends in ICT potential, mapping of the current business and research landscape in that particular domain and deliberation on what could happen in the future. It is the combination that adds weight to the outcomes because:

Historical systems analysis provides information only about the past and assume that the future will repeat the same pattern; Current situation assessments identifies the potential for evolution rather than the likelihood of change; and Futures analysis needs to be organisationally useful for institutions that are functional in the present.

Although trends (in technology evolution, consumer behaviour, market demands) are valuable for identifying future opportunities, tempering those opportunities with instinct, experience and gut feel to develop narratives that do not assume that a status quo will be maintained. This is where deliberation comes into its own as it enables a range of stakeholder experiences and knowledge to be moulded into narratives about the future. Therefore several interviews and a survey were undertaken through the project to gather data from stakeholders in order to address the questions:

What are the key drivers on the minerals and energy resource business, both now and further into the future? What is the current capacity of ICT research providers in South Australia to support minerals and energy resource expansion in South Australia? How do current ICT businesses in South Australia map onto the minerals and energy value chains?

The data from these studies was analysed to establish a range of scenarios, each capturing a viable opportunity for South Australia.

Scenarios for ICT in Minerals and Energy in 2025 | 77

A.4

Describing and validating the opportunities

Its priority in terms of business needs; Its potential for impacting on South Australia; and The existence within South Australia of relevant and globally competitive capabilities.

Each scenario developed was assessed by the project team against the following criteria:

A scenario description was developed which captured the challenge and opportunity encapsulated within the scenario, a description of what it might look like and an indication of why South Australia might be able to capture the opportunity. These descriptions were then tested initially through discussions with CSIRO experts, and then through validation workshops held in South Australia with members of industry, State Government and other interested stakeholders.

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Appendix B Current landscape of South Australian resources projects and opportunities

Conventional Gas Projects in South Australia (Core Energy Group, 2012) Conventional gas in South Australia is primarily found in two major basins the Cooper and Otway Basins. In the Cooper Basin, the majority of gas production and resources relates to two joint ventures, operated by Santos. In the Otway Basin, there are three primary production fields which account for all existing booked resources and production capacity. All of these are located offshore: Otway Gas Project (also known as the Thylacine Geographe) operated by Origin Energy Casino (including Henry and Netherby) operated by Santos Minerva operated by BHP It is estimated that the Cooper Basin holds 1,861 PJ of contingent conventional gas resources, whilst the Otway holds 171 PJ. Unconventional Gas Projects in South Australia (DMITRE, 2012) The most advanced unconventional gas projects in South Australia are in the Cooper Basin for shale gas, tight gas and deep coal seam gas. The main operators are Santos, Beach Energy and Senex Energy. The US Governments Energy Information Agency estimates the shale gas play in the Cooper Basin could yield 85 tcf of shale gas. Santos estimates a potential range for its net recoverable raw gas from unconventional resources in its licences in the Cooper Basin to be between 15125 tcf (raw gas). Other attractive areas in South Australia with unconventional gas plays include Arckaringa, Pedirka, Eromanga, Otway, Simpson, Officer and Gambier Basins. There are eight key projects running in South Australia at the present time: 1. Santos operated Cooper Basin JV Unconventional Gas project (Cooper Basin) deep coal, shale gas and basin-centred gas targets 2. Beach Energy Nappamerri Trough Project (Cooper Basin) shale gas and basin-centred gas targets 3. Senex Energy Unconventional Gas Project (Cooper Basin) deep coal, shale gas and basin-centred gas projects 4. Strike Energy Southern Cooper Coal Seam Gas project (Cooper Basin) deep and shallow coal seam gas and shale gas targets 5. Somerton Energy Otway Basin Project (Otway Basin) shale gas and tight gas projects 6. Altona Energy and CNOOC Arckaringa Coal-to-Liquids and Power Project (Arckaringa Basin) 7. Sapex Ltd (Linc Energy Ltd) Walloway Basin Underground Coal Gasification Project (Walloway Basin) 8. Hybrid Energy (Strike Energy) Kingston Coal Project synthesis gas as feedstock for products including fertilizer, methanol and synthetic transport fuel There are also a number of unconventional gas plays being explored by more than twenty joint ventures in South Australian sedimentary basins indicating significant potential for greater development in the future: 1. 2. 3. 4. 5. Cooper Basin shale gas, tight gas, deep and shallow coal seam gas Arckaringa Basin coal deposits, coal gasification, coal seam gas, shale oil and biogenic shale gas Otway Basin shale gas, shale oil, tight gas Gambier Basin coal gasification, Pedirka Basin coal seam gas, shale gas
Scenarios for ICT in Minerals and Energy in 2025 | 79

6. Simpson Basin coal seam gas, shale gas 7. Warburton Basin tight gas, shale gas 8. Officer Basin tight gas Oil projects in South Australia The Cooper Basin is Australias largest and most mature onshore hydrocarbon province and has been at the centre of South Australias exploration and development for >50 years (Heithersay, 2013). Geoscience Australia (2012) estimates that the Cooper/Eromanga Basins have produced 2856 PJ of liquid hydrocarbon (crude oil, condensate and LPG) and have 370 PJ of remaining crude oil, 88 of remaining condensate and 125 of remaining LPG. The Otway Basin contains both mature and immature conventional oil plays (as well as unconventional), with high potential for further discoveries. The onshore area is regarded as South Australias second most prosperous petroleum basin (Heithersay, 2013). Geoscience Australia (2012) estimate that the Otway Basin has produced 11 PJ of liquid hydrocarbon (crude oil, condensate and LPG) and has 82 PJ of condensate remaining. The Bight Basin - large in size, similar to the Niger Delta, but significantly less explored. To date, most exploration drilling has focused on the margins of the Ceduna Sub-basin and the Duntroon Sub-basin. BP is currently undertaking a leading exploration prospect in this area (Heithersay, 2013). Shale Oil Discovery in the Arckaringa Basin Early 2013 Linc Energy announced the possible discovery of a major shale oil source in South Australias far north around Coober Pedy in the Arckaringa Basin, which officials estimate could be worth $20 trillion (ABC News, 2013). There are up to 233 billion barrels of oil estimated to be trapped in the shale even at worst case scenario, there are at least 3.5 billion barrels in the absolute known areas Uranium-related Projects There are currently three operating uranium mines in South Australia (DRET, 2008): Olympic Dam (operated by BHP Billiton) - 0.26 k g/t of Uranium (U3O8), with an annual production in 2011-12 of 3, 885 t. Beverley (operated by Heathgate Resources Ltd) 7.7 Mt at 0.27% U3O8, with an annual production in 2011-12 of ~60 t and Beverley North 2.2 Mt at 0.18% U3O8, with an annual production in 2011-12 of ~370 t Honeymoon (operated by Uranium One inc) 4.192 Mt at 0.109% U; 0.129% U3O8, with an annual production in 2011-12 of 76 t U3O8 Numerous expansions and new projects are set to come online in the medium-term, subject to economic cycles and favourable financial conditions. Additionally, proven resources have been listed in a number of areas including: Mt Gee estimated mineral resources of 31.31 kt, 4 Mile West estimated mineral resources of 15.00 kt, Crocker Well & Mt Victoria estimated mineral resources of 6.74 kt). Geoscience Australia (2013) also lists a number of smaller deposits in South Australia including Warrior, Carrapateena, Blackbush, Crocker Well and Oban mines. According to this source, as at December 2011, South Australia held 78% of Australias total uranium resources 1,361,300 tonnes. Iron Ore projects in South Australia South Australias iron ore deposits are held within two main regions: the Gawler Craton and the Curnoma Province and Adelaide Geosyncline (incorporating the Braemar Province). Operational mines exist within the Middleback Ranges, Cairn Hill and Peculiar Knob with a further two mines approved awaiting development. The major resources are Hematite and Magnetite.
Operating Mines Middleback Ranges Operator Arrium Commenced Pre-1900 Production 6 Mtpa

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(multiple mines) Iron Chieftain Cairn Hill Peculiar Knob Approved Mines Wilgerup Witchery Hill Arrium IMX Resources Arrium Operator Centrex Metals IronClad Mining 2010 2012

(9Mtpa capability) Included above 1.8 Mtpa 3-4 Mtpa (projected)

There are also a number of development projects and prospects in major South Australian Regions (DMITRE, 2013a): North Gawler Craton One development project - Hawks Nest (operated by Arrium), Seven major prospective projects - Cairn Hill, Commonwealth Hill, Giffen Well, Mt Woods, Tarcoola Iron, Gawler Iron Project and Hicks Hill. South Gawler Craton Four development projects Central Eyre Iron Project (operated by Iron Road), Fusion (operated by Centrex Metals), Gum Flat (operated by Lincoln Minerals) and Hercules (operated by IronClad Mining) Five major prospective projects Bungalow, Carrow, Greenpatch, Minbrie and Bald Hill & Charleton Gully Braemar Four development projects (Maldorky (operated by Havilah Resources), Mutooroo (operated by Minotaur Exploration), Red Dragon Venture (operated by Royal Resources) and Lilydale (operated by Havilah Resources) One major prospective project Grants

Copper Projects in South Australia Major copper mines and resources in South Australia are (DMITRE, 2013b): Olympic Dam (operated by BHP Billiton) 9576 Mt at 0.82% Cu, with an annual production in 2011-12 of 192,600 t Cu (cathode) Prominent Hill [Malu Open Cut] (operated by OZ Minerals Ltd Malu (open pit): 44.1 Mt at 1.51% Cu; P.Hill Copper Resource: 214.Mt at 1.23% Cu; P.Hill Gold Resource: 57.8 Mt at 0.07% Cu. Total annual production in 2011-12 of contained metal in concentrate was 106,722 t Cu Prominent Hill [Ankata] (operated by OZ Minerals Ltd) P.Hill total resource: 264.8 Mt at 0.99% Cu; P.Hill Copper Resource: 210.4 Mt at 1.22% Cu; P.Hill Gold Resource: 24.4Mt at 0.08% Cu. Total annual production in 2012 of 101,737t Cu. Kanmantoo (operated by Hillgrove Resources NL) 32.8Mt at 0.08% Cu, with an annual production of 7,635t Cu.

According to BREE in their Resources and Energy Major Project Listing (Barber et al., 2012), there were three major Copper projects in the investment pipeline for South Australia as at October 2012, with the Olympic Dam expansion by far the largest:

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Publicly Announced

Committed

Completed

Feasibility Stage

Project Hillside

Company Rex Minerals Havilah Resources

State SA

Location 81 km NW of Adelaide 91 km WNW of Broken Hill 560 km north of Adelaide

Type New project New project

Estimated Start Up 2015

Estimated New Capacity 70, 50000

Capacity Unit kt, oz

Resource Copper, Gold Copper, Gold

Indicative Cost Estimate $m 800

Kalkaroo

SA

2015

44, 90000

kt, oz

447

Olympic Dam project

BHP Billiton

SA

Expansion

2017 +

570, 14.5, 700000

kt, kt, oz

Copper, Gold

5000+

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Scenarios for ICT in Minerals and Energy in 2025 | 83

Appendix C Acronyms for Research Institutes

Acronym For institute / unit IMER IPAS TRC ACVT DASI ITMS

Full name

Home organisation

Institute for Minerals and Energy Resources Institute for Photonics & Advanced Sensing Teletraffic Research Centre Australian Centre for Visual Technologies Defence and Systems Institute School of Information Technologies and Mathematical Sciences Advanced Computing Research Centre Centre for Industrial and Applied Mathematics Phenomics and Bioinformatics Research Centre Institute for Telecommunications Research Ian Wark Research Institute

UA UA UA UA UniSA UniSA

ACRC CIAM PBRC ITR The Wark

UniSA UniSA UniSA UniSA UniSA

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CNST CSEM MDRI DSIC DET CRC DSTO

Centre for NanoScale Science and Technology School of Computer Science, Engineering and Mathematics Medical Device Research Institute Defence Systems Innovation Centre Deep Exploration Technologies Cooperative Research Centre Defence Science and Technology Organisation

Flinders Flinders Flinders Inter-university Multiple partners

Scenarios for ICT in Minerals and Energy in 2025 | 85

CONTACT US t 1300 363 400 +61 3 9545 2176 e enquiries@csiro.au w www.csiro.au YOUR CSIRO Australia is founding its future on science and innovation. Its national science agency, CSIRO, is a powerhouse of ideas, technologies and skills for building prosperity, growth, health and sustainability. It serves governments, industries, business and communities across the nation.

FOR FURTHER INFORMATION Minerals Down Under National Research Flagship Anna Littleboy t +61 7 3327 4180 e Anna.littleboy@csiro.au w www.csiro.au/mineralsdownunder CSIRO Futures James Deverell t +61 46724824 e James.deverell@csiro.au w www.csiro.au/futures CSIRO Futures Stefan Hajkowicz t +61 7 3833 5540 e Stefan.hajkowicz@csiro.au w www.csiro.au/futures

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