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Experts shrug off fears on job losses from automation

Deloitte partner Steve Walsh and former Fortescue Metals Group Ltd. CEO Neville Power have backed automation as beneficial for jobs and productivity, amid existing fears exacerbated by recent revelations competitor Rio Tinto cut hundreds of jobs as it seeks to automate mines and railways.

The Australian recently cited an internal Rio company briefing that said about 600 full-time jobs would be impacted as it boosts its driverless truck fleet from 77 to 325 over four years from 2017, during which time about 100 jobs will also be affected by the growth of its autonomous drill rigs, with about 140 jobs cut due to the AutoHaul autonomous train operations.

However, a Rio statement to S&P Global Market Intelligence said the miner had underestimated the success of its retraining, re-skilling and redeployment efforts as well as the number of new jobs that have been created to integrate automation into its Iron Ore business.

"We continue to redeploy and retrain our people. We started the Silvergrass mine last year, resulting in 250 ongoing jobs. We have got a feasibility study underway at our Koodaideri project that could see 600 ongoing jobs created and 1,600 jobs during construction," a spokesperson said in the statement. "Our knowledge of automation and the benefits it brings has matured considerably over the last 18 months."

Walsh told S&P Global Market Intelligence that things may not be as black and white as they seem when companies are planning future operations regarding jobs being lost, deployed or replaced by automation.

"Normally the way these things play out is they're not even individuals [being specifically impacted by automation in company's forecasts]," Walsh said. "It's about seeing where a role might have been if things had grown, but that role ends up being somewhere different ... [perhaps] it's sitting in a control room or in the office [rather] than driving a truck."

Rio's iron ore business currently employs almost 12,000 people across 16 mines, four port terminals and rail network.

"Automation and technology have delivered significant improvements in terms of the safety of our employees, which is our top priority, by reducing their exposure to hazards and risks associated with operating heavy equipment," the Rio spokesperson said. "Automation and technology are clearly changing the way we work, including reducing the number of future roles for truck drivers, train drivers and drillers."

Precedents in other industries

Walsh said that while it was not uncommon in resources or other industries for workers to be worried about losing jobs to automation, the reality is that it creates more opportunity.

"Overall as an industry there will be more jobs in Australia because we'll be able to be more competitive than we were, whereas otherwise supply might have kicked in from somewhere else once [commodity] prices hit the point where they can start up their operations and be as efficient as us," he said.

Walsh said the roles impacted by automation are the more "straightforward and repetitive," but then someone "still has to instruct those trucks and tell them where to go."

"So the decisions about where and how to drive are still made by a human, it's just the actual driving part that is autonomous; then there are a bunch of roles created around that to support those systems, the technology that goes behind them, and optimizing it," he added.

Power said June 13 in his Sir Arvi Parbo Oration at the Association of Mining and Exploration Companies convention in Perth that the automation of day-to-day activities in households and businesses has enabled rapid gains in productivity over the past 50 years.

"New jobs have been created and the clear majority of manual lower-paid roles being replaced are higher-skilled jobs that are higher-paid and deliver increased standards of living," he told delegates. "In our industry, automation of haul trucks in the Pilbara is creating new opportunities for operations roles in clean, quiet, safe office environments."