Forget Autonomous Cars - Mining Rocks and Telcos Should Care

July 20, 2017, 9:43 a.m.
Lian Jye Su, Senior Analyst

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"We were doing V2V ten years ago, before V2V became cool!"

This is what a CEO of a Wi-Fi mesh vendor told us, whose client portfolio includes 120 mines across the world.

That's right, V2V, or vehicle-to-vehicle communications, one of the hottest use cases in 5G, has existed in mines for decades. We recently published a research report, Private Networks for the Mining Industry, a market we consider to be innovating rapidly. Mining will likely be the first vertical market where private networks will create an opportunity for telcos and infrastructure vendors, and our forecasts indicate that this will be a US$2.9 billion market by 2022. Small in absolute amount you may argue, as the global wireless CAPEX is easily 100 times larger, but believe that this US$2.9 billion market is very significant. 

Akin to a Gold Mine for LTE Vendors and Operators

Let’s imagine an iron ore mine in Pilbara, Western Australia, where hard taconite is drilled and blasted into small pieces. Scooped up by electric shovels, these taconite pieces are loaded into giant dump trucks, which can easily hold up to 240 tonnes of materials. These taconite pieces are then carried by a train to a centralized processing plant, where iron ore gets extracted and formed into taconite pallets before being shipped out to steel mills.

These are all known processes, but the interesting part is that all of these processes can be automated or even controlled remotely.

These monster haulage trucks are, in fact, remotely controlled (or even self-driving) and connected by private networks that have long been deployed in the mining sector. Supplied by Caterpillar and Komatsu, they carry mineral deposits to designated dumping sites without a human ever driving. These trucks navigate through the mine by relying on radar, lidar, GPS, and Wi-Fi/LTE communication systems. In the case of the Rio Tinto, the command center of the Pilbara mine is in an air-conditioned room in Perth, some 12,000 km away from the mining site. The control room communicates with the mining site through a broadband connection and LTE micro-,r small cells, or custom Wi-Fi mesh nodes. LTE vendors are starting to address this market, including Huawei and Nokia, and a handful of established Wi-Fi mesh specialists, namely Rajant and FluidMesh. 

These are cutting-edge technology indeed.

No doubt the autonomous truck use case in a mining site is much simpler than road traffic, as there are no traffic lights, jaywalking pedestrians, road signs, or speed limits to be observed. It is a conveyor belt-like environment for automatic hauling trucks that operate in vast, open iron ore mines. Nonetheless, these automatic haulage systems are complex, and any connection loss results in operational disruption and financial losses. In a way, these autonomous trucks are operating in a similar way to the 5G automotive use case, which is currently considered as the most popular application of the new cellular standard. 

The Market of Tele-Mining Is No Fool’s Gold

Not surprisingly, these autonomous systems and private networks have made the mining sector more cost efficient, less labour intensive, and an overall safer place to work. The mining industry weathered through three years of poor commodity and mineral prices, and the forecast for the next two years continues in the same bearish trend. The industry is committed to adopt analytics and automation to make better business decisions and simplify operations.

Tele-mining, which utilizes autonomous drills, drones, and trains, is already demanding additional connectivity and reliability, pushing current mining communication technologies to their limit. Private wireless broadband networks, including LTE and Wi-Fi mesh, allow high data speeds, large data throughput, low latency, and give the mining industry access to chipsets and devices that achieved economies of scale under 3GPP standardization. This gives both technology and cost advantages to future autonomous machinery deployment in mines, as more components of the mining operations are becoming remotely controlled or autonomous. 

Future Opportunities are Enormous, Especially for Telcos

Interestingly, while Wi-Fi mesh network vendors have become key players in the mining industry, LTE vendors, including the enterprise arms of telcos, are oblivious to this business opportunity. Instead of solely focusing on the consumer automotive market, telcos should learn from the mining sector where private networks are enabling a fully automated environment. The connectivity expertise of telcos and vendors is undisputed, and this can be a serious advantage in this fledgling market.

As such, the telecoms market should look at the mining sector, not only as a potential business opportunity, but also as a pioneer that has solved many of the technical challenges the telcoms market will need to solve for 5G. The mining industry has been developing cutting-edge solutions in geochemistry, mapping, radar and lidar sensors, underground ventilation, and extraction techniques. With the deployment of an automatic haulage system, they are also the pioneer in autonomous vehicles and private LTE networks.

Aside from providing licensed spectrum, which a lot of mining companies do covet due to the extensive coverage and low interference properties, telcos can also provide consultancy around KPIs, QoS, and management of a private network. Upcoming wireless telecommunication technologies are also very applicable in the mining sector: edge computing, security, and business analytics are some of the key concerns in the industry - solutions that facilitate better decision making and investment strategies.

At a time where the consumer market is stagnant and 5G is still premature, telcos should double-down on private network deployment, reminding themselves that connectivity is the core of their identity. Instead of focusing on 5G use cases that are nowhere near being commercial, telcos should look at the mining sector to understand how a vertical deployed cellular technology and improve profitability while reducing operational costs. Telcos should embrace this learning and aim to apply them in multiple verticals. We believe that there are many more verticals that have yet to experience the advantages of from private LTE networks, that are also keen to explore standardized hardware and software, and eager to adopt and capitalize on the benefits of IoT and big data, which telcos can readily tap into.