A White Paper on the Integration of Autonomous Equipment an In-Depth Report on Productivity and Safety in the Mining Industry and the Advantages of Autonomous Mining

February 2019

The Future of Mining: A White Paper on the Integration of Autonomous Equipment An in-depth report on productivity and safety in the mining industry and the advantages of autonomous mining

By: Herman Krause, implementations manager, automation at Epiroc

Background As long as there have been people on this planet, there has been some form of mining. Early humans dug for stone and metals to create tools. Ancient Egyptians mined for malachite to make pottery, 1 and later, they opened mines for turquoise and copper for large-scale building projects. Mining in the Middle Ages in Europe focused on copper, iron and other precious metals through open-pit mining where ore was extracted. In the mid 1800s in America, mining — and the promise of gold and other precious metals in the west — was a key factor in the Westward Expansion to the Pacific Ocean, solidifying the modern mining as both profitable and necessary to a society.

The mining industry has been, and continues to be a major part of many economies across the globe. As our desire to build more and bigger structures has grown, so too has the need for mining. That said, modern mining technology really hasn’t changed or evolved that much for many years — that is, until the concept of autonomous mining became a reality. Simply put, autonomous mining is the first real game changer for the mining industry in years.

Miners 6,000, 300 or even 20 years ago would find it a challenge to comprehend that mining equipment would one day be able to operate independently with a pre-calibrated set of instructions, completely autonomous from their human counterparts. Yet now, here we stand in a world where fully autonomous mining is not only a possibility, it’s a practical, productive and safe alternative to traditional mining practices.

Current State The modern mining industry has been primarily driven by two main factors — maximizing production while keeping costs down and keeping their workers safe. These factors have never been more important for mine management teams than right now.

When it comes to safety, across the globe, different standards and sets of regulations form the business practices that we in the mining industry adhere to on a regular basis. Organizations like the Global Mining Guidelines Group (GMG) and the Initiative for Responsible Mining Assurance (IRMA) help educate and communicate industry guidelines and their effects throughout across the globe for both open pit and underground mining operations.

Currently, mine operations are held accountable only by the laws in the countries in which they are located, and the organizational standards that the mine owner puts in place. In most countries and mine operations within those countries, there is more value put on human life now than ever before, and companies that own the mines are going to great lengths to keep their workers safe. This is a major bright spot in the mining industry today when compared to centuries or even decades ago, when

1 Shaw, I. (2000). The Oxford History of Ancient Egypt . New York: Oxford University Press, pp. 57–59.

accidents were more frequent. For example, from 1880 to 1910, mine explosions and other accidents claimed thousands of victims in the United States. While metal and non-metal mining was less deadly than coal mining, available records show that it, too, was highly hazardous. 2

It’s still not perfect, but the safety Non-Coal Mining Fatalities (U.S.) record in the mining industry is trending in the right direction. In 35 the United States this year, there 30 have been three recorded deaths so far at metal and non-metal 25 mine operations. In 2015 and 2016, 17 miners were killed each 20 year as a result of accidents in the 15 same segment of the industry. In the year prior, 2014, the industry 10 saw 30 deaths. 3 5 The numbers are encouraging, 0 and there have been a few factors 2014 2015 2016 2017 2018 that help contribute to the reduction in mine site fatalities, including increased mine safety regulations across the board, better tools and equipment at the operator’s disposal, and a movement among mine production companies to keep operational costs down, and keep their workers safe, comfortable and productive.

Productivity is another primary driver of the mining industry, in general. Typically, when we’re working with mine production companies at their mine sites, the hierarchy quickly becomes very clear — production, moreover, safe and predictable production is king, and the support services all contribute to the production team’s success. Everything revolves around how much ore these operations can bring up from the earth for processing at the lowest cost, while still keeping a focus on safety. Without the lifeblood that is the production team pumping through the mine site, everything else stands still. This is why safe, predictable production rules the roost and will continue to do so as long as there are still metals and minerals in the earth to mine.

At the end of the day, production managers of mine sites have one thing in mind, and that’s how to increase their margins in a safe, productive way. One way to do this is to invest in the latest equipment solutions. Manufacturers invest millions each year in product research and development, and throughout the entire R&D process, engineers are focused on making sure the right features are being integrated into the latest equipment designs. There are two primary ways that manufacturers like Epiroc have been able to stay ahead of the curve when it comes to advancements in technology. The first way: listening to the pain points of production teams at our customers’ operations, and designing solutions based on their specific needs. Because of the long-standing partnerships we have with many of these production teams, a mutual trust and respect has been developed and these teams rely on

2 United States Department of Labor, Mine Safety and Health Administration (MSHA Injury Trends in Mining, https://bit.ly/2FqQOh2 3 United States Department of Labor, Mine Safety and Health Administration (MSHA) Fatality Reports, https://bit.ly/2r9hhdU

manufacturers like Epiroc to continue to innovate when it comes to equipment solutions to address specific issues. Production managers, by and large, have embraced new mine equipment technology as a way to help achieve their aggressive production goals. The second way Epiroc is able to provide game-changing technology solutions is by investing in the industry’s best engineers and researchers to help discover trends, address the needs of the industry, and develop equipment solutions around those needs before mine operations even realize there’s a challenge to address.

Apart from investing in the latest equipment solutions, another way production managers of mine sites can maximize their productivity is through training and developing the mine equipment operators themselves. Retention of veteran operators working together who know the equipment and the goals of the mine operation is something mine management should be seeking to accomplish at every turn.

When looking around at where this industry has been and where it is going, one thing is certain — everything in a mine operation is centered around maximizing safety and production. Luis Canepari, VP of Technology for Goldcorp, a key partner for Epiroc, summed it up perfectly when talking about making the switch to autonomous mining technology. Canepari states: “We made the decision to start automating our drills as a safety initiative. We thought it was a good opportunity to remove workers from the face of the mine and take them from the open pit and have them operate drills from a safe location. When we started partnering with Epiroc, we took a look at the financial benefits of the project and realized what a great financial value this project was providing in terms of productivity. “

Benefits of Autonomous Mining With these two driving factors in mind — productivity and Luis Canepari, Vice President, Technology at safety — there are tremendous benefits of incorporating Goldcorp autonomous mining equipment into a mine operation. And, these two factors, along with quality and predictability are incredibly important in the decision making processes of mine management teams.

In terms of safety, autonomous mining has been a key way to remove the operator from hazards of the mine. Where operators once had to worry about a number of things like falling debris, heat, cold and sound stresses, operation of the machine near the high-wall edge, unstable terrain or other accidents, equipment operators can now control their machinery from thousands of miles away, if required. It has completely changed the role of the operator in a very positive way. What was once a physically- demanding, nerve-wracking position is now one that can be done from a comfortable operator station in a climate-controlled room with access to facilities and resources that would not be available from an operator’s station in a mine.

This has also opened occupational doors for operators themselves, with additional training and educational opportunities and the ability to broaden their horizons with these new skills.

When discussing the inherent productivity benefits of autonomous equipment, a large part of it comes down to logistics. If an operator is on the drill pattern bench of an open-pit mine, it takes valuable time to ascend from that mine for the daily blasting, and descend back into that mine after the dust settles. A Pit Viper Operator, Miguel Briones, at the Peñasquito mine in Zacatecas, Mexico. That’s easily an hour of wasted time in ascent and descent, when a blast takes typically only around 15-20 minutes. Add to that bathroom breaks, lunch breaks, or other physical emergencies, and out of a typical 12-hour shift, the operator may only actually be in the cab operating for around three-quarters of that total shift.

Many of the production teams that have adopted Epiroc autonomous mining practices into their operations, like Goldcorp, knew that there were tangential quality benefits, but autonomous drills were initially considered primarily as a way to keep people safe. Upon implementation, many operations easily saw the increase in quality, and has since become a main selling point for the integration of autonomous mining equipment.

A third, very important benefit is precision. With the technology available today, autonomous drills take human error completely out of the equation. Programmed drill patterns can be checked, double- checked and triple-checked, and the machine will do exactly as outlined in the pattern — nothing more, nothing less.

To steal an example from another industry, let’s examine robotic welding. Thirty years ago, robotic welding was billed as a novelty and fad technology. Claims were made that no robot could ever do the work of a seasoned, professional welder. Some innovative manufacturers began to incorporate the new technology, and used robotic welding machines primarily for repeated spot welding. This continued until things really took off in the early 1990s, when these same manufacturers realized that the robotic welders produced more consistent, higher quality welds than their human counterparts. From there, robotic welding machines could be found in most major manufacturing facilities. In 2005, more than 120,000 robots were in use in North American industries.

When human error is no longer a part of the equation, production teams can easily meet or exceed their goals because they can be confident that whatever activity the autonomous equipment is carrying out, like blast hole drilling, will be completed efficiently and correctly. The control system will not deviate from how it was trained to perform. While even the most masterful driller varies slightly in performance from one repetition to the next due to fatigue, distraction or simple error, Rig Control System (RCS)

performs each repetition with reliable precision. A manually operated Pit Viper might beat its time in a single repetition, but for most tasks, the automated Pit Viper system will outpace the driller by the end of a shift. It also means automated operating performance can be replicated shift after shift, no matter which human operator is monitoring the automation.

Making The Switch to Autonomous Epiroc saw a major opportunity to become the undisputed innovation leader in the autonomous mining space, and has introduced a number of products that have embraced this new technology. For example, the Pit Viper drill enables operators to accomplish more goals safely. Not only does it provide operator-assist functions like AutoLevel, AutoDrill, Auto Rod Changer, and multi-rig tele-remote control, but it can be put into full autonomous mode for streamlining operations. These are just a few of the features being used to gain consistent, sustainable productivity, shift after shift.

Since Atlas Copco, the company from which Epiroc originated, first introduced its electronic RCS in 1998, innovative features based on RCS have come steadily, one after another. Automating the control of various rig functions replaces human experience and multiple inputs from joysticks and switches with computerized inputs based on sensors and software.

Two decades and four RCS generations later, automation packages are available for any Epiroc Pit Viper drill. Epiroc’s suite of office-based software tools, such as Surface Manager, complements automation packages with easy-to-use reporting interfaces. Surface Manager displays Pit Viper data in a sensible layout to map drill usage, evaluate production statistics, track consumables and compare planned outcomes against actual results. Portrayed on charts and graphs, such active management tools help with driller training and provide decision-making support for all stakeholders. More than anything, Epiroc tools were built to streamline the process of executing a mine’s manufacturing process, closing the value chain.

Additionally, to protect the equipment investment and the workers in the mine, Epiroc Pit Vipers are contained by a predetermined geofence, that stops the machine as soon as the geofence threshold is crossed. This helps reduce the potential for a machine to tram off the high-wall, or interfere with mine trucks on haul roads or blasting personnel working in different areas of the mine. Once a machine reaches a geofence edge, the machine will stop and is not allowed to exit outside of a geofence. This is essentially a simple engineering control to help keep the machine within the drilling area. By coupling this safeguard with operator controls and Epiroc’s world-class, robust safety systems, the equipment is able to help reduce the occurrence of accidents in the mine.

Peñasquito: A Case Study One of the most recent examples of successful integration of Epiroc’s autonomous mining technology is Goldcorp’s Peñasquito mine, near Mazapíl in Zacatecas, Mexico. The operation is a large-scale polymetallic open-pit mine, and a major contributor to Goldcorp’s revenue. The mine produces gold, silver, lead and zinc, primarily. In 2017 alone, the mine produced approximately 476,000 ounces of gold. Ore is extracted using standard shovel mining techniques and is trucked to a heap leach facility, which processes oxide ore and has an average gold recovery of 57%. The ore can also be trucked to a plant that processes sulphide ore using a high-pressure grinding roll circuit with an average gold recovery of 66%. The mine moves more than 500,000 tons of ore per day, and houses anywhere from 3,500 – 5,000 workers at any given time.

Blasting takes place on a daily basis, and to accomplish that task, the Peñasquito team relies on its fleet of Epiroc Pit Viper blast hole drills. When it comes to controlling the Pit Vipers in the mine, the operations station next to the Peñasquito pit is just about a kilometer away from where the Pit Vipers are working — a line-of- sight operation. That said, there’s really no limit on how far away the operator’s station can be from the pit. If the mine’s network, radio network, and communications infrastructure is in good shape, Pit Viper operators could be several Goldcorp’s Peñasquito Mine in Zacatecas, Mexico hundred kilometers away from the drills themselves, if needed.

From the point of view of the mine personnel, when discussing the specific benefits that Epiroc’s autonomous Pit Vipers have brought to the Peñasquito operation, Oscar Sandoval, mine production manager, claims that they are now able to remove crewmembers from hazardous areas between phases 6D and 5D. “These are high-risk zones, and we don’t want to put our staff in danger in that area,” says Sandoval. Other benefits have been realized by the team at Peñasquito, as well — most notably, productivity. According to Sandoval, “the other key benefit is the increase in productivity; we can now carry on working during shift changeovers, meal breaks and when blasting. This means we can increase our use of the equipment and gain greater results.”

Goldcorp has personnel that create the drill plans that get loaded into the Surface Manager software and sent out to the machines. Each machine will have a designated area in which it will work, that is defined in the drill planning process. The work areas for the two autonomous Pit Vipers have a GPS geofence around them, and within the geofence we have two separate work areas to accommodate the two fully autonomous Pit Viper drills. That allows the operation to have two autonomous machines working together on the same pattern without one drill being able to enter the other machine’s area.

Owen Parsons, mining technology specialist at the Peñasquito mine also comments on the two main drivers behind the decision to integrate autonomous machines into their operation — productivity and safety. “It all comes down to reducing our operational costs and improving upon our production and we have the ability with automation to enable ourselves to do more with those same machines that we already have. We’re essentially maximizing the value of our assets,” explains Parsons. He continues to

discuss the additional benefits as it pertains to safety. “In terms of safety, that’s a huge thing. We’re able to put the operators in a situation where they’re in a control room instead of in an area with higher risks such as ground stability or other mobile equipment in the area, effectively reducing the risk to the operator.”

Goldcorp’s Peñasquito mine has also been able to realize improvements in drilling rates as well as a significant improvement in precision accuracy of their holes. “With our switch to autonomous drilling, we’ve been able to improve upon the accuracy of the holes, the fragmentation, leading to downstream improvements in our processes as well as improving upon our safety and productivity,” adds Parsons.

The production management team at Peñasquito also compares and benchmarks the efficiency of autonomous drills with their non-autonomous counterparts. With the first two autonomous drills in Peñasquito, the production management team realized that the increased efficiency allowed them to invest in fewer drill rigs. “We are now more precise in the targets. So when comparing, the precision is approximately one-third more efficient. The first two drills that we automated in Peñasquito achieved a 30 percent improvement in precision,” claims VP of Technology, Canepari. “Our fleet of Pit Viper drills in Peñasquito is made up of a total of nine drills. We believe that we can achieve the same production with probably 20-30 percent fewer drills. This will obviously result in a reduction of maintenance and operational costs.”

A common criticism with autonomous mining has been in regards to the elimination of good- paying, stable operator jobs. This has simply not been the case, and in Owen Parsons, mining technology specialist fact, the preliminary at Goldcorp research has shown the exact opposite. Ivan Mullany, senior vice president of technical services alludes to the fact that this is an opportunity for operators to enhance their skill set and engage the next generation of drill operators. “A major positive aspect of autonomous mining is in regards to how we think about the jobs of the future. What we’re seeing is the workforce, and especially the younger workforce, is very excited about working around new technologies that they can directly relate to,” he claims. Ivan Mullany, senior VP of technical services at Goldcorp

Moreover, the jobs will still exist and the demand for drill operators is currently there and will continue to be. It’s more of a conversation of framing up the position in a different way and autonomous equipment is helping that specific job function evolve. According to Mullany, “Autonomous will become the norm going forward, and really the goal of the industry is to become more and more autonomous so that the new mines in the future can be more productive, can be safer, and achieve better quality.”

Overall, the Peñasquito mine has seen an approximate overall boost in productivity of 10 to 15 percent in their blast hole drilling operations thanks to the incorporation of autonomous equipment.

A Pattern of Success There are a number of other clear-cut success stories using Epiroc’s autonomous drilling technology. Take, for example, the Australian surface mining market. Dustin Penn, Business Line Manager for Epiroc Drilling Solutions in Australia, serves several iron ore mines with the RCS-based PV-271 blasthole rigs. Some have pushed forward from AutoLevel and AutoDrill to more advanced systems to continue to conquer operational and strategic goals. “The issue in Australia,” says Penn, “is the limited workforce and the extraordinary expense of personnel logistics for our customers — everything from employee housing and food service to transportation. It’s a two-hour flight for them to get in and out of the mine.”

The goal for these Australian mines is to expand their capabilities by growing a fleet with the drillers they have, and that points to one solution; automation. Penn says: “With automation, the driller can become a supervisor of a drill fleet, not just a single driller operating one machine. Automation will not just lower production costs but will also streamline servicing. Multiple services such as water, fuel and visual inspection will be performed at once, more efficiently. Combined with the decreased downtime at shift changes, automation promotes greater Pit Viper utilization. ”

Penn emphasizes that transitioning to automation requires unified dedication from all management groups at a mine, from senior management to IT and human resources departments, to drilling, planning and blasting. Then the mine has to integrate with the supplier. Penn’s customers set up cross- functional teams to work with Epiroc as they incorporate automation into the mine’s operations.

The rewards make the integration process worth it, he says, resulting in predictable productivity that will help the mine accurately calculate capital from its drilling and blasting plans. Penn adds that automation also brings a greater level of equipment reliability, making fewer mistakes than human operators, and that everyone is happy from management to investors.

In Chile, Paulyn Espíndola, Product Manager for Epiroc tells a similar story. He says one of his copper mining customers is increasing rig utilization by expanding where it can use its drills. The Epiroc Pit Viper 351 diesel rig that joined a fleet of five PV-351 rigs in April is the first teleremote rig for open pit mining operations in Chile. Complete wireless control of the rig allows the operator to now drill anywhere he’d like on the bench since the operator is well away from the drilling operation. Espíndola says the copper mine had a unique challenge that only automation could overcome, and the Pit Viper automation package allowed the mine to choose features and upgrade packages that precisely matched its operational needs.

Jon Torpy, Epiroc’s Vice President Marketing, describes the development and release of Epiroc technology systems. “Having grown up in the mining industry and spending a lot of time in surface mines, I feel very strongly that we need to release mining-ready technology and the technology needs to fit into the existing processes as much as possible. The technology we are designing into the Pit Viper drills needs to be as tough as the drill itself and we have now demonstrated, on multiple occasions, that we can do that. We have now drilled almost 6 million meters and have accumulated over 7 million hours drilling autonomously. That adds up to a lot of holes and we have done it in several different mining environments around the world. Developing the technology to be efficient is just one

piece of making it successful. Designing it to be robust and fit within the existing maintenance infrastructure of our customers is the other. We put a lot of effort into both areas to deliver the best automation solutions to our customers.”

Epiroc emphasizes that the technology was subjected to the most extreme conditions it could find. This was to ensure that the automation products would be at least as robust as the operating platforms of the Pit Viper family. Pit Viper drills have been subjected to years of use in the dust and extreme heat of the USA’s desert copper mines in Arizona, as well as in the extreme subarctic cold of interior Canada and Northern Europe. Teleremote operation of a PV-235 in the Canada mine, for instance, was unaffected during the winters even in temperatures that fell below -40°C (-40°F). Furthermore, the Chilean copper and molybdenum mine’s PV-351 rigs have no trouble operating at an elevation of over 3,500 m (11,400 ft).

Conclusion For Epiroc specifically, the company is focused on providing equipment solutions that can do three things that are all extremely important to mining companies — the equipment Jon Torpy, Vice President Marketing increases safety, boosts productivity and providers higher quality results. Simply put, the company is leading the pack in terms of autonomy and autonomous drilling.

This, however, is not the pinnacle of mining automation. Epiroc engineers and research and development teams are pushing hard for new technologies, and we’re testing new systems and theories all the time. The engineering team is dedicated to making autonomy even better, faster and more precise.

One can ask any mining production team, and they will say that autonomous mining is the future of the industry. It’s not hard to imagine that in the coming years, a typical snapshot of a mine site may look much different than it does today. People will still be an incredibly vital part of the equation, and autonomous mines will not be eliminating human job functions, as maintenance teams and engineers will need to be on site to maintain the machines, for example. That said, when it comes to personnel in the pit, we might only be years away from being able to keep team members completely above ground, away from the inherent hazards in the mine.

Manufacturers, producers, and operators all understand that the future of the industry is autonomous, and by embracing this technology, together we’re making a stronger, safer and more productive industry.

Epiroc is a leading global productivity partner for the mining and infrastructure industries. With cutting-edge technology, Epiroc develops and produces innovative, safe and sustainable drill rigs, rock excavation and construction equipment and tools. The company also provides world-class service and solutions for automation and interoperability. Epiroc is based in Stockholm, Sweden, had revenues of SEK 38 billion in 2018, and has more than 14,000 passionate employees supporting and

collaborating with customers in more than 150 countries. Learn more at www.epiroc.com