Picture this. A 3 kilometre long train carrying 36,000 tonnes of iron ore is hurtling towards Port Hedland port in Western Australia's Pilbara region.
Meanwhile, about 1800 kilometres away in Perth, a Fortescue Metals Group operator decides another one of the 13 trains chugging around the miner's 620 kilometres of track needs to arrive at the port first. A customer's ship is on its way and the ore on the second train is needed for the product blend it has ordered.
From the company's Integrated Operations Centre (IOC) on the third floor of its Perth office, a rail operator remotely sends instructions to a screen on the dashboard of the first train, the driver slows or stops and the second train is allowed to go ahead.
Meanwhile, the port operator coordinates the logistics for the incoming ship now assured of receiving the right product and moving quickly on its way.
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Fortescue Metals Group chief executive Nev Power in front of autonomous trucks at the company's Solomon mine. Matt Reed - Photography Project
An "integrated scheduler", tasked with ensuring the entire supply chains runs efficiently, oversees the manoeuvre and arranges for employees at the train unloader to perform extra maintenance work while they wait for the first train.
For the Pilbara, after decades of iron ore production, this process represents the next frontier as more trucks and drills are operated autonomously and the power of remote operating systems improve.
But it also represents a new frontier for Fortescue, which is facing the difficult task of continuing to lower its operating costs after pushing them down 65 per cent over the past three financial years.
Fortescue chief executive Nev Power admits the larger, easier cost reductions have been achieved and the next reductions are likely to be characterised by a longer list of smaller gains but there is no question autonomous technology and the remote management of Fortescue's operations will play a key role. 'An environment where we can continuously improve'
While Power says it is too early to outline the savings from the IOC, it is expected to play into the company's $US12 to $US13 per tonne cost target for fiscal 2017, down from $US15.43 in 2016.
"Immediately the big cost saving is we do not have to fly people to site and accommodate them on site and that is quite a significant cost," Mr Power said.
"The other thing we are finding is because everyone is sitting side by side in Perth, there is this great interaction it encourages. Instead of them having to ring up and try and find out what is going on, the port operator can lean over and chat to the rail operator and they have immediate collaboration. I think over time that is going to drive a huge amount of benefit for us.
"And it creates an environment where we can continuously improve through that centralised control area. Engineers can review the operations, and it provides greater comparison of data so the knock on benefits just keep going and going."
Power says the IOC is also extremely valuable from a safety perspective, in coordinating a response to the Pilbara's cyclones and for diversity – Fortescue says it will favour women for roles in the IOC and is planning on building a crèche there.
After visiting the company's Pilbara operations this week, Morgan Stanley analyst Brendan Fitzpatrick said while the trend toward lower costs was "slowing", Fortescue could find "further benefits from autonomous technology and remote management of operations".
Fortescue's larger rivals Rio Tinto and BHP Billiton largely moved control of their massive iron ore operations to Perth in 2010 and 2013 respectively and Gina Rinehart's $10 billion Roy Hill iron ore mine, which began exports in December, has the benefits of brand new technology at its centre near Perth airport.
Fortescue has been slower to perform the shift over the past four years but it now controls its port, rail, Christmas Creek mine and processing plant and Cloudbreak mine from Perth. The Cloudbreak plant is likely to follow shortly and its Solomon mining hub within the next few years.
New technology
Each hub in the IOC is well labelled and has its own identity – supervisors welcome you to the "mine" – but there is a sense of camaraderie between the individual hubs, who work with each other and with the central integrated scheduler and his team, described as the "conductors" of Fortescue's 170 million tonne operation.
Cloudbreak only joined the IOC one week ago and it won't be long before the space looks different again.
New autonomous or semi-autonomous technology is being rolled out across Fortescue's mines, rail and port and it recently hired Rio's former head of innovation and technology Greg Lilleyman to accelerate that push.
It has started trialling a radar system on its shiploaders to reduce positioning error when pouring ore through a ship's hatch, and is mulling a cruise-control technology for its trains to help reduce the variability between drivers.
It has 54 autonomous haul trucks at its Solomon hub, differentiated from the identical manned trucks only by the lack of an operator in the driver's seat and flashing blue lights near the wing mirrors.
Because they don't get fatigued or need to break for meals, the autonomous trucks deliver about 20 per greater utilisation.
This has allowed Fortescue to use 20 trucks fewer than it originally planned at that site, equivalent to about $100 million in capital spend.
Having excess trucks on site has meant Fortescue hasn't had to replace its fleet so soon, allowing it to defer that expenditure and instead spend that cash paying down its debt.
Fortescue's market-beating debt reduction and cost improvements in turn have helped restore investor confidence in the company, pushing its share price up about 157 per cent over the past 12 months to $5.51, its highest since early 2014.
"There will be lots of smaller initiatives," Power says. "But they will stack up."
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