Comment by jacques_chester | Hacker News Reader

Comment by jacques_chester | Hacker News Reader

jacques_chester

My Dad worked on this tangentially for a while, helping set up and maintaining the communications systems.

Rio is also automating their trains, and minesite operations (a kind of "flight tower" for a minesite) have all been done remote for years. It looks a lot like an NOC, actually.

Finding people to drive trucks for 100k+ is actually not that hard. You basically advertise a job: "drive trucks. Make big bucks" and people flock to it.

But getting 2 or 3 different people to drive the same truck in shifts, and accommodating them, and flying them in and out, and feeding them ... it adds up. To an overhead that could run past a million dollars per year, per truck. And if you have an idle truck, that's lost money.

But it's not even the money. Rio, like BHP Billiton, enjoys insane free cashflow right now.

It's about protecting production from union activity.

In the 80s the Western Australian mining industry was repeatedly crippled by huge fights between the mining giants and the unions, particularly the quite-militant CFMEU. A mix of legislative changes by a long-serving conservative government beginning in the mid 90s, plus generous individual contracts, broke the unions' grip on mining. And just in time for the mining boom.

In 2007 a Labor government was elected and dramatically tilted the legislative tables back in favour of the unions. Then the GFC struck with full force and it so happened that Rio had just prior to it borrowed heavily to buy assets at the top of the market. So any prolonged interruption to production would be death.

And so Rio have moved to make their mining operations as union-proof as possible. Automatic trucks is part of it. The ore trains too, parts of their port systems ... everything that can be made autonomous and/or remote is being made autonomous and remote.

And for the Australians reading you can realize that Australia is toast if it doesn't get its act together and put in a real mining resource tax. You can't just rely on employment from mining. The country's resources need to enrich its people, not just foreign investors. Otherwise you're just being robbed right before your eyes.

If Norway can do it why can't Australia?

And the worst part of that stupid discussion is we already have a higher petroleum resource rent tax applied the same way as the MRRT is meant to be.

True, but there are some differences. The PRRT only applies offshore, where the resources are owned by the Commonwealth, not states. So there's no need to dance around state royalties.

The second difference is that Hawke and Keating didn't just drop it like a bombshell. They took their time to talk it through with the industry, over I think it was about 18 months of consultation and negotiation.

That's what I was thinking as well. If Australia doesn't have proper taxation of "insanely profitable" mining companies (paraphrasing), worrying about unions seems like misdirected effort. Norway has a 78% tax on profits from the petroleum industry, and the oil companies are thriving quite well. You can't exactly outsource the mining industry.

In fact, extremely heavy taxation will help with the "problem" of unions because with heavy taxation, the mining companies wouldn't have an incentive to penny-pinch on salaries. And with higher salaries, a greater amount of the mining wealth would be evenly distributed and enter the economy where a larger number of people can spend it. This is what happens in the North Sea. As a bonus, the unions will to a greater degree spend their efforts of safety measures instead of a game of tug-rope when it comes to salaries. The Norwegian model works.

Of course, you can't just tack on a 70+% tax regimen in retrospect without confiscating enormous shareholder value. So I think Australia is more or less screwed on this front. The best you could do would be to progressively tax new minesites. But of course this screws up the incentives unless it was done from the start.

Finding qualified people to drive these trucks are actually quite hard. There's a lot of misconception that you can apply for these jobs and start making $150k+ immediately (and somewhat the media helped fuel that perception). The applicants need to show both qualifications, and more importantly, experience. And the vetting process is very rigorous.

Disclaimer: I work at Rio Tinto.

Thanks for correcting me.

I have a friend who drove mining trucks in a Copper Mine in British Columbia when he was a student. He told me it was the most mind blowing boring job except for the time he almost fell asleep and drove it over a cliff. From his description, it didn't sound like a particularly high skilled job - but perhaps the type of Mine he was in had a different type of truck system.

'Vehicle and driving' are actually one of the major risks in mine operations, for the reason you just described. Fatigue, overconfidence, complacency, or simply momentary lapse in focus can lead to dire consequences.

There are controls put in to ensure safety (e.g. cabin sensors to detect signs of driver fatigue, in-vehicle monitoring, vehicle blackbox, etc.), but at the end of the day, it can only help so much.

Driving the trucks in a sane way and not flipping them over while turning is actually so boring that it is hard to find people who can and will do it and still get good productivity, at any pay rate.

Source: Brother in law was a foreman at a strip mine.

I asked my old man about taking up truck driving. He said that I'd go insane with boredom.

It wouldn't all be unions, there are other factors. Not least of which being the autonomous trucks will produce more tonnes more quickly, with less costs and better safety performance.

The OH&S benefits alone would have justified the project in the long term, and not parking the truck up justifies it in the short term - even without any existential threat from the unions.

As an aside, was there any threat of union activity? I haven't followed WA industrial relations in the last 5 years, but I though the operators have been too busy wallowing in cash to worry about pay.

The big pay has helped a lot, but unions now have much greater powers to stop a site for various reasons. Including OH&S.

I agree that there is more than one reason why Rio is doing this. But from a business perspective they are more vulnerable to production interruptions than BHP -- who aren't carrying such a heavy debt burden.

Is it a problem that unions have the power to stop the work for safety reasons? On the contrary, I believe that this is a necessity if you want to preserve the value of human life under dangerous work.

I am currently reading about the history of the North Sea subsea workers during the great petroleum expansion from 1960-2000, and the safety culture which followed from American drilling companies was just atrocious. Divers would be forced into lethal working conditions in situations where it was completely out of proportion to the importance of the work. 16-hour shifts under water, aggressive decompression tables which frequently led to both acute diving sickness and long-term delibitating injury, in addition to frequent accidents. (An "accident" under water usually means death). One time they sent down a guy who had been picked up from a pub three hours prior, who started the dive by puking in front of the whole crew. He died.

So tl;dr, giving unions the power to temporarily stop the work for safety concerns is vital if you want to make sure that the workers mostly get home safely.

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I'm not saying that it's good or bad. I'm saying that from the POV of production, a stoppage is a stoppage, regardless of what caused it.

If you improve safety by removing humans from dangerous situations, you reduce interruptions to operations. For a company at the scale of Rio, that's millions of dollars per day.

No question that it's a good idea to get people out of harms' way. But on principle, I think that the "ethics-neutral" view of "a stoppage is a stoppage" has caused a lot of injury and death over the years. You can say that this view isn't good or bad, but if it is applied to human workers the result will definitely be bad.

What causes injury and death is defective safety systems and poor safety culture. This is true of any dangerous enterprise, whether operated for profit or not.

You'll see defective safety systems and poor safety culture a lot more often in unregulated, for-profit businesses than in union- or government-regulated businesses. I don't think you'd need a scientific study to verify this claim. I mean, the whole point of regulation is usually to improve safety.

I heard they were still at the remote driver stage, not quite fully autonomous - is that not the case?

As I understand, they're controlled, but not driven. Basically a controller lays a path and the truck drives it autonomously; stopping for hazards, unexpected situations and so on.

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