Hello listeners. This is the risky planner podcast. Thanks for tuning in. Hi everybody. Welcome to the risky planner. I'm Nate and I'm Albert, and today we're going to talk about all the problems splitting in your capital projects and how you can fix them. Today's episode, we're going to talk about mine Expo and all the massive, massive, advanced technology and equipment that we saw there. Yeah, so big. They were so, so big, so big. Yeah, it was so cool. I think the most interesting was the shovels, the bulldozer shovels and the tires for me, yeah, just the fact that, like, I mean, that's like, two stories tall, yeah, they're crazy, like, the tires, the shovel size, and the Yeah, I mean, okay, so before I get into agreeing with you, which I don't, yeah, I'm, I would like to point out that we just went to an expo that had, as one of its features, a room full of the most technologically advanced mining equipment on the planet, some of which is, like, over three stories tall, and Nate's like, the tires were cool. Yeah, tires and the treads. The treads are cool. The treads are cool. I thought they were made of rubber, but they're all metal. Anyways, it's it's build a summer home, and some of those shovels too. Like you really could, actually, my house is probably small enough to fit in one of those shovels. I mean square footage wise, yeah, I mean Mine, mine too, probably all things considered, like, if you just, you know, I remember when I found my house, it's like, close to downtown Toronto. And I was like, Hey dad, you know, I found this house, and he lives in this old suburb outside of Milwaukee. He's like, Oh, yeah, what's, what's the lot size and old suburb remember, like, huge frontage and whatnot. And I'm like, oh, it's 20 by, like, 140 and he's like, is that yards? No, Dad, no. Dad, no, but, but I was gonna say, like, going to mine Expo and seeing those gigantic earth movers and bulldozers reminds me of growing up and going to see my dad submarine in dry dock. And you know you would go. So these military bases, there's security, and then there's like, security, security. So you have to go to, like the inner base, and so you'd pass through, you know, the outer gates. If you work at a power plant, if you work at like Bruce Power, for instance, they have security outside of their facility, but there's always layers of security. So there's always layers, Yeah, same with OPG, like, layers of security. You know, if you're, in power generation, security is important so but the dry dock, so we go in, we'd pass through the second layer of security, and then there's a third layer of security before we get to the dry dock. And then you get into dry dock, and the sub is like it's sitting on railroad ties, or these giant metal frames with railroad ties to provide the sub sort of a cushion to rest. And in the sub is, like, I don't know, 10 stories tall. I mean, it is huge. Yeah, they're a floating city Adam. You're, yeah, you're, I was at the bottom of the dry dock, like, looking up at this thing, and it's just massive, and the screw is there, and I'm like, and these are all top secret stuff, because, uh, you know, they don't want anybody knowing what the screw looks like. No, they don't want anybody knowing what the screw looks like, except for 10 year old Nate Habermeyer, who they would later allow to steer and command this particular submarine. Yeah. So like, security is very tight unless your name is Nate, yeah. And next week on risky planner is more stories about Nate and top secret more daring confessions of illegal activity by our host, Nate Habermeyer, I think I'm gonna have the Feds knocking at my door at some point. Anyways, I it was so you're absolutely right. I mean, the most technologically advanced mine equipment ever was. It was fascinating. And like, so big and, I mean, these are autonomous, remote, operated, you know, massive. I mean, they're the size of houses, like suburb like these are, you know, 303 3000 square foot houses. They are just enormous. Yeah, they have more so interesting apartment complex than they do with a house, you know, unless you Yeah, fortunate in life story. I mean, we saw, we saw trucks from, I say trucks, but like, I'm kind of generalizing equipment from Caterpillar Komatsu libre and a handful of others. Remember that battery electric truck that Lieber brought? Yep, so fully, fully automated. Fully automated. Yeah, they're partnering with Fortescue to deploy that thing already. So. I think that was the the T, 264, yeah, that's, it was fascinating to see a fully automated, I mean, it is, like, the biggest RC, yeah, totally right. Like, open that up at Christmas. It's gonna be a pretty exciting week. But, you know, yeah. And I think that was the funny, like, when we were around, I think you commented that, like, the the mine Expo, really is a playground for, you know, kids, and it should cater to kids, because those massive vehicles, like every kid would love to climb on it. So let's, let's talk about mine Expo. Let's talk about some of the cool quote, unquote trucks. You know, the equipment that we saw, Caterpillar, Komatsu, liber, fully automated vehicles, fully electric. You know, what? What do you? What did you? What got you excited? Albert, well, we have a couple of mining clients, and one of the things that they have in common, and this was a common theme also running through the show, was electrification. So I was walking, there were a lot of electrification and power distribution, and like, you know, peak shaving and just generally energy and energy transfer related technologies on display at mine Expo. That was really cool to see. And it was kind of neat to put a, you know, not exactly a face, but a face to the name. When you hear about electrifying mine sites going to a trade show, like this one, and that's what it is, trade show. So you can really see what's on offer there, like, what that's going to look like in real life once it starts to get going. Like there were, you know, a good example of this is we mentioned caterpillar and Komatsu and libre. They have three different ways of electrifying their trucks, right? So Komatsu has what you might consider like a trolley system, like an overhead electrical power system with a with a big old rail that connects with a truck. So their trucks are what they call fuel agnostic, where they can be configured for diesel, full, electric or hybrid. They can also all be configured for autonomous and remote operations. So there's, there's all kinds of configurability stuff that was going on at the expo as well. I mean, it's like drones, when you talk about that remote stuff. I mean, you sit in, yeah, exactly, an office with a whole system surrounding you and controlling, you know, this giant piece of machinery remotely. It's fascinating. It is, it is. It's also, you know, goes back to the theme I've been telling everybody that where I went last week was mining Disneyland. Yes, it really was. Mining Disneyland is a good way to describe it for somebody who doesn't know what to expect from a mining Conference, which is most people. But yeah, it was, it was pretty cool. And also, we weren't there alone. We had our Director of Program Management, Diego abroad. Diego, yeah, he may, if he's a very good boy, he may one day be a guest on this here podcast, you know, but it's so as fascinating as all of these giant machines are, there is an inherent risk, safety risk. There is, you know, maintenance risks. There's maintenance and upkeep. There's supply chain risks in producing these, these giant pieces of machinery. When we did our work with with, you know, mining clients in the past, and the work that we're doing now, you know, there's a lot of discussion about risk and in the mining operation. So, you know, one might say that when you start to introduce more innovation and more technology, there's more risk of breaking down, and it's not as resilient or easy to fix. So it's one of those things. It's like, Yeah, it's cool, but there's always risk. So I guess that you know that brings us to our topic is Albert, what is risk in a mining operation, even based on our, you know, current and former clients like, what is mining what is risk in a mining operation look like? Well, you know, you've covered off a few interesting ways to approach this, because you mentioned kind of like, a handful of risks, some of which I think would be beneficial a little bit to talk about what we mean when we when we talk about risk. Okay, because we were kind of taking it for granted that, you know, we've got a lot of project professionals in the audience, and they're listening to this and knowing exactly what they think of when they think of risk. But the truth is that there's lots of different ways to categorize it, and lots of different ways to estimate for it, manage it, etc. So the three that I want to talk about are like, global and systemic risk. Okay, okay, so things that no individual enterprise has any given, you know, responsibility for, you know, except for the shadowy cabal of rich people that runs everything you know behind the scenes, like they're in charge of systemic do you mean like when. You say global and systemic, like, what's an example of a global or systemic risk that you're referring to? Well, the classic example, and this is the answer every risk professional is going to give right now, is the pandemic, right, right? Okay, so the the COVID, 19 pandemic, yeah, yeah. The Yeah, exactly. Okay. But, like, even if you, if you take that stuff out, okay, something as simple as foreign exchange impacts is also a good example of a systemic risk, the war and the impact on Yep, okay, yeah. And that's another good topic, which we could probably spin off into its whole own episode of like, how many of these are risks, and how many of these are contributing factors to risks, right? Because the world is a an interesting place these days, putting interesting and big fat air quotes. But you know, with, with the continuation of several wars from the past few years that has created pressure on markets and things like the grain supply chain. In the case of Ukraine, you know it's really made and like with with Russia being kind of sort of boycotted as a result of their invasion of Ukraine, the energy market in Europe looked an awful lot different. So if you were a buyer looking to get some natural gas or oil in on the European continent a few years ago, you would have had Russian oil and gas to buy from at a relatively cheap price. And now you don't right one early on in the war, the Nord Stream pipeline was bombed. And so there's all kinds of things, and like this ultimately creates just a supply chain impact, which, which is kind of a great segue into the second type of risk, which is Enterprise Risk. Okay, so enterprise risks are those that affect a whole organization and every project or operation that it runs. So you supply chain is a classic example of that. So if you are having a difficult time sourcing natural gas, then you're probably having a difficult time sourcing it for everything that you do, you know, be it powering your facilities, or whatever enterprise risk is. It's not like, where I think, when I think of mining, I think of project risk. Let me just jump straight into that. So, like, project risk is, like, if you're running a specific project, yeah, exactly what is going to happen on this project that's going to, you know, and by the way, definition of risk doesn't necessarily mean bad, okay, a lot of folks, including myself, will lump opportunities into risk. So you've got, like, threats and opportunities, and those are your two kinds of risks. So, and you mentioned electrification, or we did this is a good example of a risk that is actually both. It is. It represents both threats and opportunities. So when you're talking about risk on mining, you're talking about all three of those things. And because mining has such deep ties into the global financial marketplace, project risks look an awful lot like enterprise and systemic risks in in a mining interest project. Yeah, all right, so enterprise risk, so we're talking about project risk and Enterprise Risk. What's another example of an enterprise risk, or maybe a story that you have about, you know, addressing an enterprise risk? What is that? You know, to be honest, most of the enterprise risks that I've worked, especially in regulatory are sorry, especially in mining, are regulatory in nature. And again, this is a good example of the blending between regulatory or sorry, enterprise and project risk, because those show up on projects all the time. Okay, regulatory risks are huge in mining, so especially in Canada, where a lot of the mine sites are on indigenous lands, so the needs of the indigenous communities need to be taken into consideration. Their leadership needs to be consulted. There are legal frameworks around that, but there's also just a moral and ethical obligation to make sure that the most direct stakeholders are consulted, so that can often take a very long time, and mining project directors and planning managers have a tendency to underestimate how much time that can take. What are what are you talking about when you say time, like, how years? Yeah, like, we have a client who's been sitting on a mine site that is ready to rock and roll, except that their consultation has not been completed to the satisfaction of so no permit, yeah? So effectively, that's a permitting exercise, yeah? So you there's no ability for them to go forward. Now, this particular mine site has some, I won't mention what they are, but there's some interesting assets on the mine site that need to be managed during the transition. So this is a mining company that's now in a totally different like agribusiness space, because that's what happens to be there right now. So you know you could this is another good example of how enterprise and project risks kind of blend together, because now the enterprise has an agribusiness to manage, and the project is nominally responsible for doing it. So you've got. Mining, people who are managing an agribusiness, and that's a very unusual situation, but it's anyway, what is there? What So with all these risks in mind and the technology we saw like, what kinds of technology innovation could be used to manage, I guess the risks that you can control Well, before I get into that, I'd like to talk about how some of these new technologies present both an opportunity and a risk, and then we can talk about how to manage them. Okay, so you mentioned the libre t2 64 in addition to being fully automatic or fully automated, it's fully electric, right? Anybody who's been in the car market in the last five years has noted the many, many electric vehicle options that they have. And if they live in Western Canada, like I do, they've looked around and looked around and wondered where all the charging stations are. Okay, right? So it's a little different. If you're building your own mine site from the ground up. You get to put the charging stations in. You get to make sure that there's enough of them. But you do have to do that. Okay, so a good you know, if you electrify your fleet, whether it's battery electric or something like the the the Komatsu solution, where it's like a tram line, by the way, Caterpillar is doing it differently. They have like a little roller coaster track that sits off to the side of all the haul roads. Yeah? They announced that at mine Expo. They did and fascinate, it's very cool, huge. Yeah, it really did look like a roller coaster track, two, by the way. Like, speaking of this being, yeah, Disneyland. You know, I spoke to a couple people who were like, they really should have put, like, a train car on there and just run people, yeah, yeah. That would have been, that would have won Best, Best in Show. I think the remote control dump trucks, the at the MMDS booth were the winners. Hey, now that was fun. Clear. That was fun, yeah, but that was the clear winner booth. You know that for you sure, I respect your opinion again, I disagree with it, because you're welcome. Yeah, you're welcome to be Thank you, yeah, well, you too, buddy. But I mentioned our pal, Diego. I have a great picture of him sitting in one of those remote control rigs that we were talking about, and he was piloting a little scale model of a rope shoveler that was sitting right next to it that was the booth to beat, in my opinion, yeah, because that was, that was real stuff. That was all actual control stuff. And, you know, Diego was basically learning how to to do rope shovel, which was neat. But anyway, back to electrification. Electrification is clearly an opportunity for mine sites to conserve on diesel fuel and clean up their mine sites. From an environmental perspective, there are clear benefits to not having building sized haul trucks spewing diesel fumes into the air at all times. So that's and that there's also knock on benefits to the mine itself, because in as much as those diesel machines have to go down deep mine shafts, which they frequently do, those fumes have to be exhausted out lest you suffocate all the workers who are doing the mining down there. So if you don't have those fumes, you have a less of a need for exhaust shafts and ventilation shafts, so that that makes those, those pieces of infrastructure just a little bit smaller, cheaper, easier to afford. However, it does bring, you, know, it tacks on a threat of, well, okay, for all these opportunities, I got to pay for that. So like, I'm going to be really early to market for relatively unproven technologies. Now, there are electric and automated haul trucks and mining equipment out and remotely operated. Is pretty common, actually, on mine sites these days. So a lot of those, like threats of being first, you know, first past the post, so to speak, like first to the to the party, because nobody wants to be first to a party, right? Like, that's a bad look, but how? But so electrification, great, but how do you get the electricity to the mine site? You said, Build Your Own like, these are not, you know, your Teslas or your your Chevy's like, they're not the you know, cars, or you plug them into the side of your wall when a supercharger overnight, or whatever, these are like, you know, they're eating up megawatts. You want to hear a statistic about that? Yeah, so, yes, I was so we spoke to a caterpillar rep who told us that their 798, hybrid hauler when it's configured for photoelectric, so huge. Okay, it's their biggest offering right now. It just, it, just it, just it, just barely edges out the 797, which I've actually tires. We're back to the tires. Okay, got it, yeah. So what's the stat? So the stat is that that thing, when it's configured for full electric, uses about the same amount of power as 1000 average Canadian homes. Yeah. Okay, yeah. So we're not a day or an hour, well, in terms of kilowatt hours. So okay, got it so, sorry, no, not kilowatt hours. In that case, it was megawatts. Like that rail, that rail would, I mean, if you touched it, you'd explode. There's a lot of energy. So how do you get, how do you get that energy to the mining site? We're talking about really remote sites, like, you know, you mentioned one of our clients that's, you know, ready to rock, but, you know, waiting on permits and consulting, you know, local stakeholders, but that's a remote site. What do we do? What are they doing to get electricity there? Well, you know, building anything requires you to power it. These days. I mean, there's very there's very few things that have no electrical power demand. So the most common way to create that supply is to tie into the grid, right? So that means building new substations and hanging a bunch of poles and doing transformer work and all that stuff. Generally speaking, that's done in partnership with the local power utilities, but also, generally speaking, we're talking about a relatively lightweight amount of power demand for a site that's configured for running a bunch of diesel trucks around and diesel equipment around, that your main issue is actually fuel and getting, like, the fuel infrastructure put in place so that the logistics network doesn't break down, And you can fuel everything every day, plus maintenance, like you've got to get spare parts and and, you know, the all the toys that the mechanics use and all that stuff. But on an electric site, all of a sudden that demand goes up by many, many factors of 10, in some cases. So you're talking about a huge amount of additional power draw, and that may not be something that the local grid can handle, because, as you pointed out, you're talking about very remote mine sites. So one of the way, and this didn't come up very much at mine Expo specifically, but it gets talked about online somewhat. You hear people like, you know, giving keynotes, talking about it, co generation is going to become a bigger deal. So we talked a little bit about that in the last episode, generation? Yeah, sure. So it's, it is basically when your site generates electricity for itself to make up whatever demand is, is not present or like, if the grid can supply x and you need x plus y, then you need co generation. That's minimum Y, right? So the the technologies for CO generation mirror the technologies for power generation more generally. So in places where you have and they're at a smaller scale than your average power station, okay, so the cheaper and easier to implement, the more likely it will be used as a co generation so right now, that means that it's mostly natural gas, okay, and oil fired plants, things like, sounds like a perfect opportunity for SMRs, yes, absolutely. And that's where in the future, yep. So insights could definitely benefit from that. And then they also need steam, you know, which is another thing that you get from your co generation facility. So, yeah, I'm reading it like you just a you know, as an aside, you read about all of the companies that are looking for energy to meet AI needs, and the amount of energy that's that's used by like chat, GDP and like other, you know, AIS to train their model to serve up queries they're looking for and having trouble finding supplies. So, you know, mining and it's going to be, it's going to struggle as well. It is. It's an interesting point. It's absolutely going to struggle. And we have, you know, all of these other industries that are competing for the same electricity. When provincial power authorities here in Canada are doing the math. They're realizing that they can't rely on just new builds to get there. They're standing up old reactors, and you've seen some of that same stuff start to happen in the US, like there's talk now of restarting Three Mile Island, which should scare people a lot less than it maybe does, considering that that was, you know, a jillion years ago, and relatively well contained even at the time. But like, the point is, just like, it's an old reactor that's just sitting there, mothballed, if you unmoth ball it, that's a relative shortcut to producing some extra energy. But all of that energy is in the same marketplace where things like AI and, you know, big compute more generally, in cloud computing and the internet are all competing for the same electricity as as our friends in the mining world. Hence, cogen and all of that you were asking about risk earlier, all of this on boards. Risk, okay, all of it does because, you know, I talked earlier about one of our mining clients who is currently in the agribusiness world, because they have to be. All of our mining clients are about to be in the power generation and distribution world too, because they have to be. So, you know, a lot of that looks like peak shaving and energy savings type stuff as well. So to try to minimize how much you're spending on energy. Caterpillar has some cool technology that they're showing off at mine Expo, like their dynamic energy transfer system they were showing off, you know, battery banks and switch gears and transformers that were the size of Mack Trucks that they intend to roll out to mine sites in place yet. So cool, very cool, not as big as the tires. So I want to just switch gears a little bit. So the other thing that was really cool was the remote operations, right? Because some of the clients that we talk to, they have remote minds. They have an impossible task of finding highly skilled qualified professionals to go to these sites and and, and so they're having trouble staffing them. And so some of the innovation, like the the autonomous, like quote, unquote vehicles, because these are, you know, giant, giant pieces of machinery. And then the odd, the remote, you know, drone type. It's not new, but you have to think about the risk that's involved trying to find labor, and the risks that come from labor being, you know, talented individuals, being on site that the some of the advances in, you know, current technology has to be, you Know, addressing that for sure labor short and like even talking about it as a shortage, is interesting, because it's true that there is going to be as mine sites ramp up, and there are more of them, like more projects being approved and going through the permitting process now than there have been in a good long time. So Canadian and American mine sites are standing up a lot of new capacity in the next, you know, 10 to 20 years, which is exciting, but it is going to create kind of a it's going to put some stress on like the heavy equipment operator world. Okay? And you do still need a heavy equipment operator to run your fancy remote vehicle. You even need one for your fancy autonomous vehicle. So I've worked at a at a mine site that was in the process of moving over to they were piloting an autonomous vehicle program, and they were already, at the same time piloting a remote operations Vehicle program. All of their autonomous vehicles had drivers in them. They were just sitting there waiting for the autonomous system to screw up so that they could hit the brakes or turn the wheel or whatever. And I don't know if there was, I mean, they would have kept this pretty close to the vest if there was, you know, any failures of the autonomous system, but, you know, they still felt the need to keep those people there. But what happens when they don't feel that need anymore? So, you know, speaking again, of risk, if you put autonomous systems in trucks or whatever other equipment and you trust those systems to operate without a human backup, then all of a sudden you've got a lot of Hull truck drivers who are looking for work. So that's going to put downward pressure on salaries, and it's going to encourage fewer people to enter the workforce in that heavy equipment operations space. And if you look at what happened in, say, the military, like the US military, makes extensive use of drones, right? They do so most of those drones are a great analog for these haul trucks that are semi autonomous in nature. So the drones can make some decisions by themselves, but they are piloted, ultimately, by somebody, you know, sitting in a trailer in Nebraska or whatever. Okay, yeah. I'm like, Yeah, you know, on this, on this mine site that I was talking about before that was experimenting with remote operation. This was 10 years ago, okay, okay, what kind of remote operation they had a It was basically, it was a lot like the rope shovel station that Diego was using, where they had, or that there was another vendor we saw that just that just does remote operations, so you have, like, a, it almost was, like a flight simulator set up, yeah, the remote, one of the vendors that had the remote, you know, operation, the technology was The Brazilian company asked for E that we saw that was really cool. That was really yeah, those offerings are exclusively for remote operation. Yeah, the the latency that they were claiming to be able to achieve there was was measured in just a few milliseconds, like 10 years ago, 10 years ago, that system I was talking about, that my client at the time was was using was measured in seconds. It was multiple seconds. So they're literally 1000 times faster than they used to be just a few years ago. Okay, let's wrap it up. We're gonna move to our piece of advice segment. I like to end with, you know, Albert, what's one piece of advice for companies? You know that we've worked with companies that we want to work with, companies that we are working with about risk and technology, that you think you'd you'd want to give them? Well, I think the the biggest piece of advice is to to make sure that they've accounted for all of these risks when they're due. Their planning, and not to paint too rosy a picture for the board. You know, no matter what they may say, because all of these technologies are inherently risky because they're new, right? And even the ones that are old, like remote operation, are new because they're being done in a different way, using different technologies applied to different things. So you know, it's about taking a holistic view of those risks, so that you can see it from the systemic marketplace all the way down into the individual impacts of individual Hall truck drivers on your mine site. Taking that holistic view of risk will allow you to brainstorm a lot more risks than you might do if you just focus in on what the mine project actually has to do itself. Because it's worth noting that a lot of these costs will be shared between the organization and the mining project, if they're trying to put so it's easy to think about those risks as not affecting your project, but anything that affects the company is going to affect the project. So take a holistic view, make sure that all of those things are on the table and make sure that you've got a really solid data set for measuring how much those risks might actually cost you, not just in terms of dollars, but in terms of time. We've seen a couple or three clients actually, though they were there, look like they're pretty solid on cost based on their risk profile, but their schedules are at severe risk, and for all of the reasons that we just mentioned, like the amount of time it takes to make a decision to electrify, the amount of time it takes to do the consultation, the amount of time it takes to design new technologies into existing proven ones, like putting all those electric infrastructure pieces into a mine shaft is a combination of like 17th century technology and 21st century technology, and it does take a lot of doing to integrate those ideas together, right? Yep, yeah, excellent. All right, thanks, Albert, thank you. Nate. All right, we'll see you. See you all next time on the risky planner, thanks for listening. Hey everybody. It's Albert here. Thanks for tuning in to the risky planner podcast. We hope today's conversation was informative and above all else, inspires you to excellence in what you do. If you liked today's episode, don't forget to rate subscribe and leave a review. It helps us reach more listeners just like you. I'd also like to thank Thompson, Igbo, egbo, for letting us use his excellent music on our show. If you like what you hear, check him out@igbomusic.com that's E, G, B, O music.com talk at you later you.