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Swedish equipment manufacturer Atlas Copco plans to split into two companies next year, with its mining and construction tools division shaping as the basis of a new entity.

NewCo, the working name for the spin-off company, will focus on mining and civil engineering customers and include the mining and rock excavation technique business area and the constriction tools division, according to Atlas Copco.

The business has about 12,000 employees and annual revenues of 28 billion krona ($4.2 billion). Atlas Copco will propose the split at its 2018 annual general meeting.

If a split does occur, the remaining Atlas Copco business would focus on industrial customers and include the compressor technique, vacuum technique and industrial technique business area, plus the portable energy division and speciality rental division.

Atlas Copco president and chief executive officer Ronnie Leten said the two businesses have different demand drivers and demand characteristics.

“A split will increase their respective abilities to add value to customers, grow the business and attract talent,” Leten said.

If approved by shareholders, the split would take place through a share distribution, whereby Atlas Copco shareholders receive shares in NewCo in proportion to their existing stake.

Meanwhile, Atlas Copco has appointed Mats Rahmström as its new president and CEO, effective April 27. Rahmström will replace Leten, who has resigned after eight years in the position.

Rio Tinto has announced it will invest $338 million to complete development of its existing Silvergrass iron ore mine.

The miner first announced plans for an investment decision in its half yearly reports earlier this year.

“The brownfield expansion of the high-grade Silvergrass mine offers attractive returns, with an expected internal rate of return for this investment will in excess of 100 per cent and a payback of less than three years,” Rio Tinto said.

The project is key for the miner to maintain its higher grade iron ore blend, whilst also adding ten million tonnes of capacity.

“We are committed to disciplined capital allocation and the approval of the final phase of the Silvergrass development, which is one of the most value-accretive projects across the mining industry, delivers high-quality, low-cost growth that will underpin future returns to shareholders,” Rio Tinto CEO J-S Jacques said.

He reiterated the importance of the project in maintaining Rio’s Pilbara blend grades.

“The additional low-phosphorous tonnes that Silvergrass delivers will sustain the long-term viability of our Pilbara blend, ensuring continued premium pricing, whilst also lowering our operating costs through infrastructure improvements,” Jacques said.

These improvements include replacing road haulage with an overland conveyor system linking Silvergrass to its existing processing plant at Nammuldi.

The age of the customer has well and truly arrived and it will be the companies that recognise this that will get ahead in 2016.

That’s the key takeaway from a recent report from US-based Forrester Research, which has named the 10 critical success factors that will determine “who wins and who fails in the age of the customer” in 2016, reports B&T.

While Forrester says many companies are developing and executing strategies that centre on customers, “the problem is one of magnitude and speed”.

“Many companies have underestimated the magnitude of change needed to operate a customer-obsessed business and the speed required to catch up to dynamic customers and disruptive competitors,” Forrester says.

And the gap between the “customer-obsessed leaders” and the laggards will only widen in the new year, the research firm says.

“Leaders will take on the hard work of shifting to a customer-obsessed operating model; laggards will aimlessly push forward with flawed digital priorities and disjointed operations,” the report says.

Here are Forrester’s 10 critical success factors that will help your business get ahead in 2016.

1. “Personalisation is the new bar”.

In 2016, the companies that will get ahead are the ones that deliver a high level of quality, personalised experiences, says Forrester.

“Customers expect to be treated as individuals in their moment of need,” the company says.

“They expect that each encounter will be informed and enriched by current and accurate information about their accounts, history and preferences. They will reward companies that can anticipate their personal needs and wants – and punish those that clumsily have to relearn basic customer details at each encounter.”

2. “Small CX thinking will destroy financial results”

Delivering high-value, personalised experiences means thinking big when it comes to customer experience (CX), says Forrester.

Rather than focusing CX work on only “constructing customer journeys”, Forrester says successful companies will focus on “driving change above and below the visibility line: from aligning the brand promise to transforming operations”.

3. “Who leads matters more in 2016”

Traditional leadership structures need to be broken down in 2016, according to Forrester.

“Leading companies will have CEOs who drive change and can put the right person in the right role to take on a rapidly changing market,” Forrester says.

“Laggards will try to maintain old leadership structures while compensating for gaps with titles that have little real authority and unworkable governance structures.”

4. “Culture is a critical path to business success”

Having the right culture is no longer just a luxury, says Forrester.

“Culture fuels change; it is not a by-product of change,” the company says.

“Culture drives speeds and efficiency, creating instincts, norms and new muscle memory to shift to a customer-obsessed operation and work at the speed of dynamic customers and disruptive competitors.”

5. “Traditional companies stand up to disruptors”

Disruption is now the norm for many businesses and leaders will need to fight back against the disruptors in 2016, according to Forrester.

“Laggards will hold on to legacy business practices, respond poorly to market threats, and witness a dangerous gap form between themselves and their customers,” the company says.

6. “Loyalty programs focus on participation”

Gone are the days of loyalty programs that simply offer coupons or discounts, Forrester says. Customers now want to participate and share a purpose with a brand, such as helping to design the pair of shoes they want to buy.

“In 2016, loyalty programs will increasingly do things with their customers, not simply for their customers,” Forrester says.

7. “Analytics becomes a key competitive weapon”

In 2016, it won’t be enough to just access big data, businesses will increasingly need to use algorithms and analytics to anticipate and deliver value to their customers.

8. “Digital dabbling is a fatal strategy”

Leading companies will “embed digital into all parts of the business” in 2016, while laggards won’t look deeper than “shiny, front-end digital objects”.

9. “Privacy is moving from niche to value prop”

Customers care about their privacy and are willing to act to protect their privacy more than ever, according to Forrester.

In turn, leading companies are now starting to think about protecting their customers’ privacy as more than just a legal or risk factor and instead as a marketing goal.

10. “Operations becomes the nucleus of value”

The final factor that will be critical to success in 2016 is developing a “customer-obsessed operating model”, says Forrester.

This involves four core principles: “obsessing” about the value and personalisation of customer experiences; using analytics instead of big data to deliver those experiences; moving at the same pace as customers and disruptors; and applying this logic across all the functions of a business.

Deloitte has compiled a new report outlining the top 10 problems miners will face next year.

Ongoing commodity weakness with little sign of respite, and a negative investment environment ahead, has created a continued poor market for mining yet tax burdens and stakeholder expectations remains just as high as during the boom.

This has created an extremely negative market as mining struggles through the bottom of the cycle.

“It’s an interesting time in the mining industry, just as during the super cycle, people imagined prices would go up forever, people now imagine the market will never recover,” Philip Hopwood, Deloitte’s Canadian and Global Mining leader said.

“Neither extreme is true, but cycle times are lengthening, which means it could take years to adjust to current market forces — but it’s still a cycle.”

As such miners are continuing to look ahead, building the foundations for the next upswing.

So what are the 10 major issues they are expecting next year?

Going lean: Operational excellence remains front and centre

According to Deloitte, miners are looking outside the industry to adopt best practices, a move that has been regularly advocate3d by BHP chairman Jac Nasser, who recommended looking to the automotive industry for best operational practice.

“In an effort to achieve true operational excellence, industry leaders are leveraging best practices from other industries and tackling difficult issues, including labour relations,” Deloitte stated.

Innovation: Preparing for exponential change

The mining industry is in one of its greatest eras of technological change since the Industrial Revolution. The integration of automated and remote operations, as well as the rise of the Industrial Internet of Everything is changing how miners do business.

“Innovation is a critical theme for miners,” Deloitte explained. “However, many mining companies remain at the early stage of the adoption curve — placing most of their innovation focus on technological optimisation of old techniques rather than looking for new ways to configure and engage externally.

Deloitte laid out how miners can prepare for this evolution, stating, “short-term strategies miners should consider adopting include: enhanced innovation, collaborative ecosystems, digital workforce engagement, and improved asset management, aligning work processes with energy availability, 3D printing and modularisation.”

China’s transition: Looking for the silver lining

Of course, the driver of the last great boom is one of the major concerns is still an issue in 2016, despite its rapidly shrinking demand levels and a shift from a heavy production into a services and consumer economy.

“Given China’s influence on the global economy, miners should take steps to understand the global impact of the country’s domestic market trends — particularly as the Chinese Government follows an increasingly interventionist path,” Deloitte said in its report. “Concerns over currency weakness may spur Chinese enterprises to buy overseas assets over the short-term — including natural resources.

“To prepare for these incipient shifts, it would be worth miners considering extreme scenarios, developing plans relative to China’s investment initiatives and leveraging Chinese expertise in areas such as design, construction and financing.”

Adjusting to the new normal

The days of the boom are gone, and will never be reached again, and as the market goes through a period of readjustment it will eventually find its level. Speaking at the Stockbrokers Association of Australia Conference, China Metallurgical Industry Planning & Research Institute’s president Xinchuang Li told Australian Mining that the bottom was reached, and there would be a plateau ahead.

“The economic slowdown in the country is the new normal,” Li stated

“Commodity demand — particularly out of China — is down,” Deloitte explained, “but production is not falling. In fact, some producers have ramped up output to reduce unit costs, consolidate market share or avoid the costs associated with shutting down older mines.”

Preparing for inevitable change

The mining industry is undergoing a period of somewhat forceful transition, as the old ways of doing business no longer suffice as the importance of social licences to operate become higher and sustainable business practices and energy development becomes prevalent.

The global move towards renewables has threatened the outlook for thermal coal. Although fossil fuels are likely to continue playing a critical role in the global energy mix, the move to alternative power sources is inevitable.

Changing the nature of stakeholder dialogues

Earlier this month Rio Tinto chief exec for coal and copper, Jean-Sébastien Jacques, called for greater transparency in mining, and a change in the way miners work with communities.

Speaking at a Bloomberg Address in Sydney, Jacques said “licence to operate issues make or break mining companies in the future”.

“The weight of increasing stakeholder expectations can cost a company like ours time and money if not managed well.

“Society demands more and more transparency, openness and rigour in environmental performance and impacts.

“There is no doubt it is getting harder to bring new projects to life, brown or green field, and the winning mining company of the future will manage licence to operate issues with excellence,” he said.

Deloitte agreed, listing this as one of the major issues for 2016. “Old tactics no longer work. Instead, a new form of stakeholder engagement is needed — one that can demonstrably meet the demands of multiple groups,” it said.

“Miners should align their investments with the underlying needs of their disparate stakeholders to fully maximise opportunities.”

Starved of finance, miners struggle to survive

The mining investment market is set to implode over the next three years.

Mining investment in Australia is set to decline sharply over the next three years, resulting in 20,000 job losses.

A new report by BIS Shrapnel – Mining in Australia 2015 to 2030 – predicts the current state of contraction to continue in mining, falling a further 58 per cent over the next three years.

“Attracting capital has become harder than ever, as segments of the industry continue running at a loss. In response, companies will likely continue to seek out alternative sources of financing — even when the terms aren’t entirely in their favour,” Deloitte explained.

Tax challenges will impact yesterday’s management

To keep pace with the evolving tax environment, companies should take steps to understand the financial implications of these new tax rules, assess their operational and corporate structures, take a fresh look at their management and engage with government stakeholders — especially where tax rules related to stability or production agreements threaten to change, Deloitte stated.

The M&A paradox: To buy or not to buy

Mergers and acquisitions always occur at the top and the bottom of the cycle, and currently mining sits in the trough of the market variation.

However despite predictions of a pick-up in mining M&A, deal values and volumes continue to run lower than expected. “In fact, the most active deal flow in recent years has come from divestments and rescue-type deals; to take advantage of these opportunities, miners may want to consider buying counter-cyclically and thinking twice before divesting,” Deloitte said.

An expanded view of corporate and personal welfare

Safety is always key on any mine site, and this will not change

“Industry risks related to both safety and security continue to grow, to enhance their safety records and security postures miners may want to strengthen their safety procedures,” it said.

From small to large parts, simple to complex, iron to magnesium – 3D printing continues to revolutionise the way things are being made across industries on a global scale.

Regardless of the industry you’re in, 3D printing complements conventional fabrication methods by reducing production lead time and costs while bringing better products to market faster. Incorporating systems that streamline the production of these items can result in greater productivity and ergonomics for businesses.

Sand casting patterns are commonly produced by using computer numerical control (CNC) machining, but problems like incorrect shrink compensation and design flaws can occur which in turn require the pattern be reworked – creating additional costs and lead time that Australian manufacturers cannot afford to outlay while under increasing pressure to improve time, cost and production efficiencies.

To combat these issues, sand casting patterns can be 3D printed with Fused Deposition Modelling (FDM) Technology™ – creating substantial savings in cost, labour and time which ultimately speeds up new product development, design, manufacture and deployment.

FDM is an Additive Manufacturing process that builds plastic parts layer by layer, using data from computer-aided design (CAD) files. FDM parts have the compressive strength needed for use as a sand casting pattern.

FDM & sand casting – The surface finish of FDM created parts meets all the requirements of sand casting patterns when post-processed. Post processing also seals the molding surface which prevents release agents from penetrating and sand from sticking. FDM Technology is also being used in both green and no-bake operations for pattern and core box production.

How it works – Sand casting is the process of metal casting using sand as the mold material. When creating a sand cast mold, sand is packed around the pattern and the resulting mold cavity is then used to create finished metal parts. If voids are required within the mold cavity, core boxes are used to create sand cores.

Applications – It is a cost-effective, efficient process for small-lot production or high-volume manufacturing when used in conjunction with automated equipment.

Enhanced productivity – Manufacturers can achieve a lead time reduction up to 70%, are able to make faster design revisions and an interchangeable gate and runner system.

Reduced Cost – Manufacturers can gain a pattern cost reduction up to 70%.

Customer Story – Melron Corporation – With the use of FDM Technology, Melron Corporation, a manufacturer of window and door hardware, can print 3D patterns, core boxes, gates and runners with greater production efficiency – they have reduced the cost of producing matchplates by 60% and lead times by 50%.

For more information on how FDM technology is helping speed products to market, improve production efficiency and reduce operational costs, click here. Alternatively, you can watch this video.

Canberra tech company Seeing Machines is set to introduce hands-free cruise control for regular cars, after gaining global recognition for vastly improving operations for mining truck drivers.

Mining companies such as BHP Billiton and Rio Tinto began employing automated drills and driverless trucks to assist with production and preserve profit margins against a volatile market.

New technologies such these driverless trucks and drones have greatly assisted Rio Tinto in its mining efforts –monitoring stockpile inventories and inspecting geological formations within mines.

According to Seeing Machines CEO Ken Kroeger, the first mass-produced semi-autonomous vehicles will be available to the public next year.

“After using just 10 driverless trucks in 2012, Rio has now expanded to 66. These vehicles can run all day without a driver who needs to lunch or bathroom breaks.”

Kroeger believes the latest innovation from Seeing Machines will include live tracking of road conditions, traffic density and lane markings.

Autonomous drills in underground mines are even more profitable, as employees using normal equipment not only take significant time walking from the opening to the work site, but are operating in dangerous working conditions as well.

According to a survey by International Data Corp, about 69 per cent of 190 mining companies are considering remote-control equipment, while 29 per cent are considering an increased use of robotics.

Caterpillar recently reached a $23 million deal with Seeing Machines for the rights to the mining and rugged industry systems.

The outermost reaches of available mineral resources will be the topic of discussion at the 3rd International Future Mining Conference, which begins today in Sydney.

The conference will showcase innovations and technological developments in the minerals industry, such as autonomous mining, emerging exploration technologies, new commodities for high-tech equipment, and asteroid capture.

Senior executives speaking at the event include Rio Tinto chief growth and innovation officer Craig Stegman, Caterpillar Global Mining Division’s James D. Humphrey, Gold Fields CEO Nick Holland, and NASA Jet Propulsion Lab (Engineering & Science Directorate) deputy director René Fradet.

Topics to be discussed will include the types of new minerals that will bring wealth in the future; how global warming and climate change will affect the industry; renewable and alternative energies; mining in environmentally sensitive areas; advances in water treatment and reuse and a site of novel mining systems; and technologies that are revolutionising the industry.

The second Off-Earth Mining Forum will be held concurrently on Thursday 4 and Friday 5 November, which will hear speakers from space agencies NASA (US) and JAXA (Japan), as well as space mining companies Deep Space Industries and Shackleton Energy.

Engineers and scientists will join the forum in discussing the work being done to prepare for the coming age of asteroid mining in space; issues such as resources, technologies, robotics, automation, instrumentation and business risks.

The Off-Earth Mining Forum was organised by Professor Andrew Dempster, director of the Australian Centre for Space Engineering Research at UNSW, and professor in Space Systems Engineering

Conference chair and geotechnical engineer Serkan Saydam is an associate professor at UNSW, who is currently working on to develop financial and technical models to evaluate various off-Earth mining scenarios, including mining on Mars.

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