Speaker Spotlight: Rod Smith

26 August 2019

In the build up to the International Mining Geology Conference 2019 we will be interviewing the keynote speakers on some key issues related to the conference theme, Mining Geology: 2020 and Beyond.

This month we interviewed Rod Smith, Chief Advisor – Planning and Scheduling, Rio Tinto and Dr Angel Abbud-Madrid, Director, Center for Space Resources Colorado School of Mines.

Rod joined Rio Tinto in 1986 as a geologist, working on coal mine operations, exploration and projects in Australia, India, Colombia and Indonesia. Since 2013 he has worked with senior technical and operational leaders across Rio Tinto’s product groups in areas of strategic decision making, orebody productivity, mine planning process effectiveness, business transformations, supply chain optimisation and competency development.

Q. In your area, where are the biggest technological advances being implemented and how is this influencing key metrics such as safety, productivity, all in sustaining costs?

A. Planning & Scheduling is an internal advisory function, covering a broad spectrum of support to Rio Tinto’s production value chains. Our technology focus is on applying industrial-strength mathematics to all business horizons from near-real time to strategic and life-of-asset planning. Although linear programming techniques have long and successfully been applied to the economic evaluation of mineral deposits, they’ve tended to be used in more of an abstract, assumptions-driven, options-analysis decision space. Our focus is on bringing these methodologies into our nearer-term, operational decision horizons, where real conditions – actual weather, price / exchange rate, equipment performance, grade control data, competitor behaviour and so on – fluctuate and interact dynamically with our base assumptions. But it’s still the case that many planning and scheduling processes and skills – and the organisational structures that are familiar and second nature to old guys like me –  are anchored to deterministic tools and techniques. While familiar and (mostly) dependable, we know that these heuristic processes at times lead us to miss opportunities to capture fresh value, or to defend against adverse events.

In other words, instead of throwing more capital and people at our production constraints and bottlenecks, we’re throwing mathematics and decision analytics.

As well as helping us contain costs and squeeze more cash through infrastructure bottlenecks, these approaches also help us better understand and manage risk and uncertainty, with clear benefits for safety. We’ve trialed vehicle conflict analysis tools that can simulate complex interactions on mine area roads. And we’ve engaged our 300-strong Operations Research community of practice in looking at ways we can apply their advanced skills to the challenge of fatal risk elimination across the Group.

Q. What message would you like to provide to the delegates – what do you hope will be the main message they will take away from your keynote presentation?

A. In a productivity-focused mining business the voice of our foundational asset – the mineral endowment – needs to be heard above that of the equipment, processes, infrastructure and organisation that assist in its extraction, processing and delivery. How well, and how often, is that voice heard and understood? How do we maintain a responsible balance between operational productivity drivers and mineral resource management?

At Rio Tinto we’ve found that a better way to listen to orebodies begins by getting everyone talking in a common language. I’ve found many mine geologists aren’t familiar with the language of equipment performance, availability and utilisation. In return, the eyes of many production leaders and business managers glaze over when we talk geospeak about reconciliation or other orebody knowledge technical factors. And so, with productivity in mind, we asked ourselves what might happen if we measure the performance of our mineral orebodies in the same way we measure the performance of a haul truck or a fixed plant.  What’s the Availability of this orebody?  What is the Effective Utilisation of this Mineral Inventory?

We’ve developed a new approach that brings fresh insight to the way we plan, prepare and produce. It’s brought together all of the people whose roles and departments have a stake in making decisions about how much of these irreplaceable mineral assets we are able to convert to value. And it has helped us find and unlock hidden value.

The result is an amalgam of metrics and measures, drawing on a manufacturing model of equipment effectiveness and a loss accounting mindset adapted from Rio Tinto’s Asset Management standard. We call it Overall Orebody Effectiveness, OOE for short. It may not be the traditional way the mining industry approaches ore reconciliation but this fresh approach appeals to and engages a much wider audience. And that’s been the key to its success.

Q. Where did the idea of Overall Orebody Effectiveness come from?

A. Like many inventions and innovations, OOE was born out of need, during a time when our former coal business in eastern Australia was challenged to reduce costs and improve productivity. We started with some new diagnostic tools to leverage greater insight from each site’s annual reconciliation data. This highlighted some areas of opportunity to reduce production losses and improve the value margin of the products. As we started to catalogue the various losses and opportunities, a pattern emerged. The result was a hierarchical loss accounting model that spanned all the decisions from the resource geologist at one end of the value chain to marketers and logisticians at the other. It has been adopted as a global technical process by Rio Tinto’s Orebody Knowledge Leadership Forum and has been applied across every one of our operating sites and most of our development projects.

Q. How well has the OOE methodology been received in a company as large and diverse as Rio Tinto?

In a word, enthusiastically. Since being adopted as a Group technical process, a comprehensive training program has been developed and is being rolled out across all of our businesses. This allows each of our technical teams to conduct an initial self-assessment of their mineral assets.

In the past much of the business improvement focus at operating sites was directed to processes and physical systems, often with costs as the primary driver.  Sometimes our Orebody Knowledge teams felt they were cost targets rather than value creators. OOE gives them a framework to explain and measure the performance of the mineral asset, which opens the way for multi-disciplinary teams to work with them on improvement initiatives to drive additional value.

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