Mining industry needs to build a new pipeline of talent for the long term, says Komatsu CEO

MINING.com sat down with Jeff Dawes, of CEO Komatsu, one of the world’s biggest suppliers of industrial equipment to several industries to get his take on how OEMs are getting on the sustainability track, and why fossil fuels aren’t easy to walk away from.

MDC: What is the biggest obstacle in your clients’ way?

Dawes: I’d have to say sustainability if I had to put one word on it, and the concept. One of the ways our customers are looking to achieve sustainability goals is to reduce carbon emissions in the use of their equipment. That’s our Scope 2 emissions and their Scope 1.

We’re helping our customers accomplish their goals by working hard to develop more power options and introducing new technologies into our machinery. Fossil fuels are still a really important power source.  Our equipment – in our current, near term road map we’ll be looking at alternative power, from hybrid sources, batteries, trolleys, hydrogen fuel cells, whatever’s available. We’ve formed an alliance with some of our major partners called the Greenhouse Gas Alliance. We’re working specifically on developing a zero-emission truck within this decade.

Building on our commitment to reduce our carbon emissions by 50% by 2030, based on the 2015 carbon emission levels, we’ve also recently announced we’ll pursue carbon neutrality by 2050. A lot of our mining clients have made very specific commitments by 2030, so the need for solutions to combat climate change – the pressure is increasing, year by year.

MDC:  Like you say, everybody’s got a target now – fairly ambitious. On the ground, how do you see this progressing? Is there enough lithium in the world to power all the mining trucks out there? 

Dawes: I think it’s a process. We have absolutely no doubt in our minds that we can produce a zero-emission truck, but whether that truck will function in a mining environment is more of a question of the mining companies’ infrastructure rather than the truck technology itself.

That’s one of the basic reasons behind our Greenhouse Gas Alliance, was to work together with the customers right now. We’re inviting them into the development process much, much earlier than some of the products that we develop so they are aware of what they need to do to be ready for a zero emissions truck. For example, you’ve got a mine with 70 300-400 tonne trucks running, just to electrify those trucks, they’re going to need 50 megawatts of grain power, just to keep up the purpose of taking the digital engines out and a mine of that size probably uses 35 megawatts – so its more than doubling their current power permits. That’s not going to happen overnight, so they need to start thinking about that right now.

Trolley options [are] a significant infrastructure development, and hydrogen fuel cells. [Miners] need to be thinking about hydrogen tracking plants and storage tanks. It’s a parallel development – we can develop the truck, they need to work on infrastructure onsite to be able to use that technology.

MDC: So the truck is almost the last piece of the puzzle – where the rubber hits the road?

Dawes: I think that technology is clearer – the roadmap towards that technology is clearer for us than it is on the infrastructure side.

MDC: Technology is also changing rather quickly – do you have parallel R&D?

Dawes: We built  the truck platform that will be power-agnostic.  You can run it on a digital engine, you can put a battery in it – you can run it off a trolley, put a hydrogen cell in it- or a combination of all of those. The idea is to not limit ourselves to a particular power source, but to be able to take advantage of whatever [is] the best technology available at any given time, and also the option to retrofit. When the [technology] comes out, we can upgrade without having to change the whole truck.

MDC: Investments in these trucks can be quite huge, especially for smaller players- are you lining them up for retrofitting?

Dawes: [Yes}, from our dash-5 series, the trucks we are building right now, we have a roadmap to transform them to a power-agnostic truck.   It’s not going to be cheap, but it can be done. The first part is you work on the technology on how to do it more efficiently and cost effectively. We can do it, yes.

MDC: Are we in a supercycle, or not? There is talk from all corners – a sentiment, in the industry, of sorts.

Dawes: Mining is cyclical by nature, and we are riding a high at the moment – there’s no doubt about it. Despite the challenges of covid and everything else, it’s a pretty exciting time to be working in the industry.

Global demand for Komatsu products increased by 19% on a global basis in Q1, compared to last year. In North America, that increase was more than 40%. From our point of view – net sales, operating income and profit ratio are all on the right on the rise as we said in our last earnings call.  However, I’ve noticed miners are far more conservative in this upcycle than they were in the last one.

The drop from that supercycle was almost cataclysmic. We’re expecting this to be a much smoother cycle. But we’re not seeing it going down, we’re seeing it going up.

MDC: With a link to sustainability, technology is changing, you see ‘for hire’ signs everywhere…are you finding, in your business, with your clients, a labour shake-up? 

Dawes: Sure. There’s a big need in our industry to build a new pipeline of talent for the long term. The best way to do that is to increase interest both in our industry, and the skill sets needed for new types of jobs that will be available in the future – the industry is changing. We need to increase that – and maintain interest in the fact that mining provides really good, family-sustaining jobs, but we also have to recruit new types of talent for the high tech skills needed in areas like automation, robotics, computer programming, that hasn’t been traditionally important, but is becoming more so.

MDC: So someone who’s just finished his BSE in computer science – Komatsu might not be the first place he looks, do you feel you’re competing more and more with outside the industry for talent?

Dawes: Absolutely. Our industry has been a leader in automation for many years. We pioneered our autonomous haulage system in 2004 and our first commercial deployment was in 2008 at Codelco’s Mistrel mine in Chile. The industry has been in automation for a long time, and we have spearheaded a lot of the technologies necessary for automated vehicles. As an industry we’ve been recruiting talent for automation jobs for more than a decade now. People want to come to an industry where people have been working in this area for a long time. Mining is a great place to be.

It is true, however, that we have had to modify our recruiting strategies to include non-traditional competitors in the labour recruitment space. Covid’s helped us a little bit in that regard – it’s not only us, but other companies that are getting pushed down the road to remote work, which was something that we had in the pipeline.

 We had pilot-type tests with it and now we’ve leaped in with both feet, and particularly in this area of technology it’s given us a leg up, because now we don’t have to get these people to go work in Tucson, where we have our technology headquarters.  They can live wherever they want and jump on a plane once a month and go down to Tucson for a few to get together and that’s enough. That group of people is perfectly equipped to work remotely. 

MDC: Do you have a feeling that is where lots of people will end up?

Dawes: That’s one scenario and that’s mostly the technology area. We’re a manufacturing facility. There’s a portion of our workforce that needs to work every day because we have to build stuff.

 Here at our offices people come in usually 2-3 days a week. That’s on a business unit basis – they decide which days.  It’s pointless going into the office to spend all day on a Teams call. That doesn’t make sense- so we design it as collaboration days and when everybody comes in they are collaborating.  When they have their assignments, they go and work from home. It’s been working out pretty well for us.

MDC: At a time when there’s never been a great demand for metals and minerals [but] it seems like there has been a turn against the mining industry. How big is the disconnect between the broader public, or the environmental lobby versus the industry itself?

Dawes:  In mining there’s always been a need for a social license to operate.  Social license to operate is a very inherent part of the mining principle. By building community programs we can ensure that the wealth generated by mining will directly benefit the community surrounding the mine has always been a part of developing any mine site.

Any mining operation not only has a responsibility to share the wealth generated during the life of that mine, it also has the responsibility to ensure the benefits are lasting and sustainable even after the mine closes. We’re pretty familiar with public scrutiny and a public approach to new projects. At the same time, what we are seeing now is a new level of openness and transparency that I haven’t seen before.

Mining can’t be carried out in secret. Mining is one of the most heavily regulated industries in the world, so the process of opening or closing a mine is a very public thing. I think that’s a good thing. Mining is a very fundamental part of our lives – gathering a consensus on the development of new projects or significant expansions is the way forward.

There’s still a lot of work to be done to connect the dots from mining operations to consumer products and people’s everyday conveniences but there’s still a big gap between people’s expectations and what is practically feasible. Everyone wants to see the day when the world stops using fossil fuels, nobody disagrees with that – the only disagreement we have is on timing.

MDC: How do those messages get out there?

Dawes:  It’s an easy win for politicians to take a swipe at the environment and mining. There are very few politicians who are courageous enough to tell the truth and face reality. All mining companies want to be sustainable. There’s nobody out there  that deliberately wants to damage the environment.

 It’s just a question of – how can we do that in a sustainable manner? We can’t stop mining tomorrow – most people don’t understand the consequences, and I hope very much that we don’t see the consequences of it. The negative attitude by the public and the politicians towards coal mining have meant that the percentage of the base load power here in the US that has onsite storage, which is essentially coal power stations or nuclear power stations, have dropped to a dangerously low level. If we have a nasty winter here in the northeast…people are going to die. 

Sustainability. We’ll get there, but we’ve got to do it in a sustainable manner. But we can’t do that without the general public understanding that this is a process that we have to go through. It has to be a controlled process, or there’ll be some pretty big bumps in the road ahead.

There’s this gap between expectations and reality. What we need are politicians to be courageous enough. That can say; this is the end game, this is where we want to get and here’s a road map to get there – not just react to public opinion, irrespective of what the reality is and whether it can be complied with or not.

I think that mining companies do have a longer view of things. These investments are very, very long term. If you invest 7-8 billion dollars, you’re looking ten years ahead. Politicians just don’t look out that far.