Australia’s rock-solid drilling industry

Australia’s resources industry is a pillar of the country’s economy with Australia being one of the largest exporters of coal, iron ore and bauxite. As the demand for materials grows, Australia’s drilling industry will play a key role in ensuring supply can keep up with demand.

The Australian Mining Review sat down with Australian Drilling Industry Association (ADIA) chief executive Jeff Miller who provided some insight into Australia’s drilling industry and its future.

AMR: Can you tell us about the current situation within Australia’s drilling industry?

JM: Drilling is a bit of a mixed bag at the moment. There are some sectors that are doing really well and there are other areas that are struggling. It would be no surprise to anyone that those that are exposed heavily to say nickel or lithium are struggling now, whereas companies involved in iron ore or gold, commodities which are both enjoying stable prices, their fortunes are brighter. The water well and geotech sectors tend to be much more perennial and, we’re hearing that there is much less volatility and conditions across those sectors. It could even be described as buoyant. Underground drilling seems to be holding up too, although there are reports that margins are being squeezed in that sector.

AMR: What are the current challenges facing the Australian drilling industry, and how will these be mitigated?

JM: A lot of drillers are exposed to commodity prices and the fortunes in mining, so for the drillers that have that exposure the biggest challenges they will face is having enough capacity when things are going really well. The tougher question they’ll have during quieter times is what to with idle equipment and of course, idle people, when conditions aren’t there to support their drill rig fleets and their staff. Diversification is one way drilling companies deal with fluctuations in commodity prices. Larger companies make sure they are hedged against various mineral types and even repurposing their fleets into different drilling types.

The other key challenge is how do we keep the people we engage safe? How do drillers make sure that they have productive and profitable businesses at all stages of the economic cycle? That will be an ongoing challenge, because the consequences for not keeping people safe can be severe.

AMR: How is training keeping up with innovation and evolving industry regulations?

JM: One of the things that keeps drilling businesses safe, productive and profitable is a commitment to making sure that all of our teams are well trained and well skilled for the tasks that they need to undertake. One of the challenges around training is how do we make sure it keeps up with safety demands. We have to step back and ask are we genuinely training people and equipping them to be safer and more productive in what they do and not just ticking boxes. It is not good enough for us to do something just because it has the appearance of being the right thing to do.

Training has to be responsive, and we have to be honest when ADIA offers training that it is actually going to help make businesses safer, more productive and more profitable. Are the training methods we’re using driving the right level of engagement in the people who are being trained? Is it meeting their needs? Is it meeting the needs of the company? We have to step back and ask are we serving Gen Y and Gen Z who are entering the industry with old styles of training or should we be thinking about more online based training and learning that adapts to particular people’s learning styles.

AMR: How is sustainability and the transition to renewables influencing mining projects across Australia, and what is the impact for drilling operators?

JM: Australia follows very rigorous and high standards for its mining operations and ESG obligations are taken very seriously. There are other markets in the world that perhaps don’t mine to those levels of environmental safety and governance that are observed in Australia. One of the many reasons why some other markets can get their minerals to market cheaper is because they don’t have the same standards that they adhere to, whereas Australia does.

One of the interesting challenges Australia faces is how does it become competitive on a global stage where it has some of the highest standards for mining but at the same time the product has to be competitive in a world market. It’s a balancing act because no one wants to see the environment degraded unnecessarily in the pursuit of finding renewables.

If there is no market for the commodities that we have in the ground because our cost structures are so high and our minerals are not competitive, then those minerals are going to stay in the ground. The issue is how do we find that right balance? How do we make sure that everybody globally adheres to the standard? They are really tough questions, and none of these issues are going to be easily resolved.

AMR: With continued technological advancements, including smart drilling, 3D modelling and automation, what do you see the future trends of drilling in the mining industry?

JM: The interesting thing about technology and the future trend in mining is that nothing stays still for long. Drillers are always trying to find a competitive advantage. They’re always trying to find new ways to make sure that the metres drilled can be done safely, cost effectively and profitably, in other words, how can they drill more metres for the same inputs.

I don’t think it’ll ever get to that stage where there’s not people involved; I think drilling is far too complex for that. But the idea that people are further away from the equipment, their control panel is further away from the operational part of the drill rig so should something go wrong they’re out of harms way. The spirit of innovation is definitely alive and well in the drilling industry and if you couple it with 3D modelling, automation, and other technologies and it is inevitable that great things are going to continue happening.

For us to transform to a renewable green future, Australia and the world needs more drilling, not less. But what will that drilling look like? We hope it’ll be far safer, far less of an impact on the environment, far more sustainable and profitable for the drillers because that will underpin our transition to the green future that we all look forward to.