AusBiz Magazine - April/May 2018

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NEWS+VIEWS

ArgiBusiness

mining

infrastructure

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P.2 Agribusiness: growth of organic foods P.8 Mining: renewed optimism in mining sector P.12 Mining simulators P.22 Cybersecurity: The internet of things P.26 Infrastructure: sustainability

Agribusiness

Agribusiness

The organic rush WHILE THE JURY IS OUT AS TO THE MEDICINAL BENEFITS OF ORGANIC FOOD, CONSUMERS ARE INCREASINGLY PREPARED TO PAY A PREMIUM FOR THIS PRODUCE. On a lush subtropical ridge overlooking Currumbin Valley in the Gold Coast hinterland, fourth-generation farmer David Freeman sells organic bananas, mangos, avocados and other fruits to motorists at prices up to 50 per cent more than the cost of regular supermarket fruit. Freeman says the markup is justified by his fruits’ superior flavour, texture, high nutrient value and healing properties. “In 2014 when I was in the army, doctors discovered a malignant tumour. I was supposed to have 12 months of chemotherapy but the oncologist told me to go back to my farm and eat some healthy vegetables before I started the treatment,” he says. “When I got back 12 months later, I was in the clear. That’s why I believe in growing this nutrient-dense produce on this beautiful soil to help the community eat healthily.”

There is no scientific evidence of the medicinal value of organic food, while evidence about its allegedly superior nutrient value also remains slim. After compiling the results of 250 different studies that compared the nutrients in organic versus regular foods, researchers at Stanford University in the US found very little difference between the two. Organic produce was found to have 30 per cent lower pesticide residues, but pesticide levels in regular foods tested also fell within allowable safety limits.

Nevertheless, a significant minority of consumers in the developed world are willing to pay extra for organic food that addresses not 

Ian Lloyd Neubauer With nearly 20 years’ journalism experience, Ian is abreast of global news as it happens.

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Agribusiness

only health but ethical and environmental concerns. Australia’s organic farming sector grew 17 per cent over the past five years, according to market research firm IBISWorld, with 2,300 certified organic businesses generating $742 million in farmgate value in 2017. And with hundreds of new organic producers now graduating from the lengthy certification process, IBISWorld believes the sector’s farmgate value could leapfrog to $1.2 billion in less than five years.

But how difficult is it for producers to become organically certified in Australia?

What kinds of organic foods will see stronger demand? And what challenges or threats will organic farmers face in the future?

A tale of two farmers

We spoke with two organic farmers on different sides of the country who have seen very different results. The first, grazier Rob Lennon, is a soil-health fanatic and owner of Gundooee, a 1,000-hectare cattle station in Leadville in Central West NSW. “I like the passive approach to organics,” he says.

“It’s about trying to understand natural processes rather than controlling them and creating more problems.”

As Australia’s only certified organic grass-fed Wagyu farm, Gundooee cannot meet demand. Its mince retails for $30 a kilo while T-bones sell for $60 a kilo — about twice the price of regular Wagyu — and is sold via high-end butchers in Sydney and on suburbanpaddock.com.au, the online store of a small collective of non-competing organic farmers in the region.

“The reason organic beef is more expensive is because we don’t feed animals a high-energy diet so we have to graze them for longer,” Lennon says. “It’s a more sustainable method of production and the result is meat with a higher amount of unsaturated fats and Omega 3s, which is where all the flavours and nutrients are.”

Ian James is a farmer from Western Australia’s Wheatbelt who has been preaching the benefits of organics for 30 years. Five years ago, he ran as a political candidate for the Greens on a no-GM (genetically modified) seed platform in the seat of Durack. James didn’t win the election, while his experience with organic wheat farming has been hit and miss. 

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Are GM foods bad for you?

Genetically modified (GM) foods are those with ingredients made by inserting foreign genetic material into the genetic material of an existing organism to give them a new characteristic, such as insect resistance. Currently, there’s only one genetically modified-approved food crop in Australia: GM canola.

However, a wide array of GM foods, ranging from potatoes and rice to soybeans and corn, are certified for consumption. The GM Free Australia Alliance estimates genetically modified organisms are found in 60 per cent of processed foods. So one way or another, the majority of us are consuming GM foods daily. Are they safe? The truth is we really won’t know until long-term studies are published in coming decades.

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Agribusiness

“We are a fairly large grower; we grow about 300 tonnes of grain per harvest,” he says. “But organic wheat processors in our area can only handle 25 tonnes at a time, so we have to bear the cost of storing it in our silos. Processors say they need more organic growers to justify more infrastructure for larger volumes of grain. But it’s a case of which comes first, the chicken or the egg?”

Getting certified

When Lennon bought Gundooee 20 years ago, it was a conventional cattle farm with straight Angus cattle. The idea of raising Wagyu evolved after a barbecue at a Wagyu ranch next door. “I thought, ’These steaks are good! They have a superior flavour,’” he says. “I wondered if could make them even better by raising the cattle organically.”

Lennon ran Gundooee as an organic farm since day one but only became certified in 2006, two years after he sold his first organic Wagyu carcass to Sydney’s TJ’s Quality Meats. He used his resume to sell Wagyu to TJ, who used his resume to on-sell to customers. But when Lennon’s business grew, he needed a way to share his organic credentials with the mass market.

It took Lennon the usual three years to gain certification with Australian Certified Organics (ACO) — one of seven groups accredited by the Department of Agriculture, Fisheries and Forestry to dispense organic trademarks. These trademarks assure consumers products are free of synthetic pesticides, herbicides, hormones and antibiotics, that livestock is pasture-fed, seeds are non-GM and farming processes are water efficient and biodiversity friendly.

“The process is pretty straightforward so long as your soil samples come back OK,” Lennon says. James agrees: “There’s a lot of misunderstanding among farmers about the accreditation process. But it’s not that difficult to get your head around it. The real problem is that organic food is not being marketed well in Australia. We can grow it well, but reliable demand doesn’t exist.”

Premium price-point

ACO chairman Andrew Monk says organic farming has strengths and weaknesses.

“There’s great demand for anything organic in dairy, especially with China in

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our backyard,” he says. “There’s also been significant movement with dried fruits; thousands of hectares are about to be harvested. And the price for red meat, well, that goes through its own cycles, though I believe it’s doing rather well right now.

“But grain is a real challenging one because of the high cost of production and problems meeting consumer price points.”

It’s not only the price of organic bread that leaves most Australian consumers baffled.

“We estimate total organic food retail sales in Australia will reach $2 billion this year,” says Monk. “But that’s just 1 or 1.5 per cent of total food sales in the country. In Europe and the US, market share for organic food varies from 2.5 per cent to 5 per cent.”

Organic food prices in Australia may drop marginally this year as next-generation producers come online. But organic farmers like James say consumers shouldn’t hold their breath. “There are big advantages using chemicals and fertilisers for farmers.

They get a bigger yield,” he explains. “And we cop a yield penalty for not using them.

So the cost differential is here to stay.”

Lennon agrees, saying the solution lies not in charging consumers less but educating them more. “If I had time I’d write a blog about why food quality has gone downhill and why it costs more to produce organically so consumers can understand why they should pay more,” he says.

“Right now, I don’t think they know.”

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Green shoots of a mining recovery Darren Baguley An agriculture, tech, mining, energy and business specialist.

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AS COMMODITY PRICES STABILISE OR IMPROVE, THERE IS RENEWED OPTIMISM IN THE AUSTRALIAN MINING SECTOR. A RECENT HAYS RECRUITMENT REPORT SHOWS THAT DEMAND FOR MINING JOBS IS GROWING AGAIN.

Mining The Australian mining and energy construction boom that peaked in 2012–13 was a once-in-a-generation event. But as with all booms, it was followed by a bust.

As the mines and liquefied natural gas (LNG) projects were completed, the mining and energy industry transitioned abruptly from the construction phase to the production phase. At the same time, coal and iron ore prices tanked due to a perfect storm of oversupply coupled with reduced demand out of China.

For more than five years, mining in particular and the resources sector in general were in survival mode, with gold and lithium being the only bright stars in an otherwise dark firmament. The green shoots of a recovery, however, are finally apparent. According to BIS Oxford Economics’ report ‘Mining in Australia 2017 to 2032’, Australia's mining industry is expected to more than double this financial year.

The report predicts that mining production growth will more than double from 2.5 per cent in the 2016–17 financial year to 5.5 per cent in 2017–18­­. This growth is expected to continue for the rest of the decade; even without Adani’s controversial Carmichael mine in central Queensland’s Galilee Basin, which, the report suggests, is unlikely to proceed.

Nevertheless, Deloitte Access Economics is circumspect about any marked lifts in mining investment. In its December quarter ‘Investment Monitor’, Deloitte Access Economics lead partner Stephen Smith says that despite more than 18 months of broadly better news on commodity prices and a lift in exploration expenditure, mining investment isn’t expected to increase substantially.

“Miners appear focused on controlling costs, so recent strong profit results are more likely to be returned as dividends than laid out on new investments,” Smith said.

In contrast, recruiting experts Hays’ January 2018 ’Jobs in Demand’ report has flagged a decided uptick in several key areas of employment within the mining industry. Hays Australian Director for Resources & Mining, Chris Kent, says that renewed optimism is driving increased demand across Australia’s mining industry to the point where skills shortages are starting to emerge again.

“But it is a very different workforce now to then,” said Kent. "When a mine is in the construction phase, we’re talking construction trades, construction engineering and

construction know-how, which draws on a very multicultural, international workforce. Many of the people who [built the mines during the boom] work on a project-specific basis all over the world and move to where those new projects are.”

According to Kent, once a mine transitions into the production phase, the workforce is more like the construction or manufacturing industries, whereby there are permanent positions that are there for the life of the mine. “Once a mine is in production there are different sorts of rosters, because it’s not all about how fast you can get something done, it’s actually how efficient and productive something can be. So just as we struggled to find construction engineers in 2012, now we’re struggling to [fill roles] such as mechanical fitters that can keep trucks on the road to carry the ore from pit to port.”

Not only are different jobs and workers more in demand than at the height of the boom, but the dynamic between employee and employer has changed. During the dizzy heights of 2011–12 there was a real war for talent, and talent won. Today, says Kent, “A fair bit more power and influence is in the hands of employers than in the heady days of the mining boom. In the past three to six months, skills shortages have started to emerge again, but it’s no longer ’hire at all costs’ because mining companies are still running tight. Commodity prices have returned to solid levels but are not at all-time highs or anything like we saw back then.”

One of the notable trends, says Kent, is the push for more diverse workforces. “Mining companies are trying to get more female workers into the mining sector and more indigenous participation. They’re also trying to add more value to communities where the mines are operating to improve the mining companies’ social licence to operate.”

Kent named underground engineers and maintenance planners as areas of high demand and quipped that exploration geologists — one of the hardest-hit areas during the downturn — “are finally getting out of their Ubers and getting a job in exploration again”.

He attributes that trend to miners having a renewed appetite for exploration. “Exploration is the first stage of the life cycle for a mine, which bodes well for sustainable job creation over the next few years. If a company is exploring and it finds something, obviously it will take it to market. Gold and lithium are the 

Fast Facts

5.5%

The predicted mining production growth in Australia for 2017–2018, up from 2.5% in 2016.

$56.5

The 2017 value of Australian coal exports, in billions of dollars. It's a new peak, according to the Australian Bureau of Statistics.

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Mining

main areas of demand but increasingly for copper and even nickel and zinc as well. That is exciting because we’re not completely reliant on iron ore and coal, which are obviously two of our bigger exports.”

Demand for blue-collar jobs such as dump truck drivers, mechanical fitters and excavator operators is starting to ramp up again. “These are pretty straightforward roles,” says Kent, “but during the downturn, wages got cut and working underground especially is still a pretty difficult job, what with the rosters and being away from family.”

With the reduction in wages, mining has had to compete with other industries to retain those people. “Take, for example, someone working in an underground coal mine in regional Queensland. There is the threat of black lung and all sorts of health risks but they’re only earning a few bucks an hour more than in a factory just outside Brisbane, where they go home to their family every night.”

As a result, Kent says wages for low-level blue-collar roles are starting to go up as mining companies realise they can’t attract people to the sector. For that reason, he expects the first stage of wage inflation will be in the blue-collar space in the coming year.

Even with wages destined to go up, Kent believes it will be difficult to entice people back into the sector. “Workers

weren’t treated brilliantly when there was that quick reduction in commodity prices, there was a bit of panic, rosters were cut, wages were cut, conditions were cut and there were years of negative press about the mining sector.

The challenge for the industry is to bring some of those workers back and bring new workers into the industry.

“There is a marketing piece to be done about the career opportunities in the mining sector. Mining companies need to reassure people who doubt that there are opportunities that it’s possible to make some competitive money but there are also opportunities for career advancement, that mining is a cutting-edge industry that embraces a diverse culture.”

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Mining Simulators

Virtual mine management and training SIMULATORS HAVE BEEN USED IN MINING FOR A COUPLE OF DECADES, BUT WITH THE ADVENT OF OFF-THE-SHELF VIRTUAL REALITY HEADSETS, THE TECHNOLOGY IS SET TO SOAR. In recent years, the mining industry has figured out what those in aviation have known since World War II: using simulators saves time, money and lives. Whether it’s for the passage of trucks on a haul road, driving a haul truck itself, or for drilling and blasting, simulation technology is becoming more widely used. In one of its more unusual applications, it’s wound up being a valuable training tool for crane drivers. While we don’t normally associate cranes with mining equipment, the reality is that many mine sites use them for construction, and for relocating equipment and overhead cranes in processing areas.

According to Keith Bishop, General Manager – Marketing at crane hardware specialist Nobles, the advent of relatively inexpensive virtual reality (VR) headsets — such as the Oculus Rift — has made the technology even more appealing. “The first generation of crane simulators were like flight simulators, with lots of screens and

Darren Baguley An agriculture, tech, mining, energy and business specialist.

controls mocked up like a crane cabin,” explains Bishop. “But they weren’t very well received since they were large, immobile and expensive because they had all that gear associated with them. And they still didn’t provide a very realistic experience of operating a crane.

“This VR technology takes simulation to a whole new level: you put a headset on and you’re immersed in a crane cockpit, with a 360-degree view of everything that’s going on, as if you were sitting in a crane,” says Bishop. “And the controls you operate are OEM specified crane controls, which are exactly the same as the major levers you’d use in that crane model, in real life.

This combination makes for a very realistic simulation, and training experience.”

Not surprisingly, registered training organisations (RTOs) make up one of Nobles’ main consumers of their simulation product. Since cranes cost millions of dollars and often only one vehicle is 

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Mining Simulators

ADAM PRICE, RPMGLOBAL

Mining Simulators

allocated per 10 or more students, training to a baseline of skill on a simulator means RTOs can maximise crane time for their students.

Elsewhere in training, simulators can be used to improve the competency of existing operators. Just as air forces, airlines and navies do, companies with large fleets of cranes can use simulators to expose their drivers to hazards they wouldn’t normally encounter in an operational environment.

By practising in the simulator, operators are better equipped to know what to do if something should go wrong, and at the same time valuable machinery is not being tied up or put at risk of damage.

In addition to RTOs, Bishop says large construction, mining, oil and gas companies with strong site safety compliance and control policies are interested in the VR system as a competency tool. “They need to be able to verify that all employees or subcontractors are compliant and capable of using heavy machinery like a crane, before letting them onto their sites,” explains Bishop.

By using off-the-shelf technology, such as the Oculus Rift VR headset and a high-end gaming laptop, Bishop believes companies such as ITI are democratising VR technology.

“One of the benefits of this type of system is that it uses existing off-the-shelf technology that can then be applied [to meet a variety of needs, whatever they may be]. As the technology improves and the price decreases, the cost of providing it as a service will also decrease, and the benefit of higher resolution, et cetera, will be passed on to users,” says Bishop. “The system is incredibly simple and easy to operate — as simple as pressing a button to turn on a PlayStation, and it loads up straight away. There’s no complex set-up routine; the most complex part is plugging in all the cables.”

A similar trend is evident in mine management simulation programs such as RPMGlobal’s HAULSIM, says Adam Price, the company’s Simulation Product Manager. “In the past, any simulation undertaken at a mine site has been done by a simulation expert — not a haulage expert — and the simulation model was not for a specific project,” he explains.

“This is an expensive way to run simulations, and you’re left with a static model that isn’t kept up to date.”

HAULSIM uses a gaming-inspired 3D model based on the user’s unique mine site, providing an accurate visual representation of their scenarios. According to Price, this approach gives users a more holistic view compared to traditional models. In addition, HAULSIM’s Discrete Event Simulation (DES) software models mine haulage systems by simulating equipment interactions and infrastructure, allowing users to navigate current operations and future mine plans.

“Using HAULSIM and its powerful DES, a gold mine in Canada was able to reduce the time taken to create scenarios from over a month to under a week,” says Price. “This allows mining engineers to move away from

programming and instead focus on adding real operational improvements that will have an impact on the bottom line.”

While safety is the highest priority on a mine site and products such as HAULSIM help to identify high-risk situations, simulation technology — such as Nobles’ crane simulator — also saves mining companies big bucks.

However, RPMGlobal’s Price contends that many mining operations are making decisions worth several thousand dollars without a model to support the decision — and simulation can provide that data.

“Often decisions are based on a gut feeling rather than data,” says Price. “We’ve found the answer after running a simulation is obvious after we’ve done the analysis, but the simulation often produces a different result to what we were expecting. Customers who use simulation have a much deeper understanding of their haulage systems, as they are able to test all possible scenarios, such as widening a road, decreasing the maximum queue lengths or adding a stop sign to a particularly congested route. They save money since they’ve investigated all other viable alternatives, and have only spent when their return on investment is proven.”

With new technology comes fresh challenges, and VR and 3D simulation are no exception. “There’s been a bit of suspicion from some of the more experienced crane operators, who question whether the technology will actually be able to simulate a real crane operating environment,” says Bishop. “But as soon as they get on the gear, they quickly realise it’s very close to the real-world experience of driving a crane. So, one of the main ways to get over some of the challenges is to just get people to drive it and see for themselves that it’s not a toy, but a sophisticated education and training tool.”

For RPMGlobal, Price says it’s the mine sites themselves that provide the greatest challenge, since they are all so dynamic. “If you’re simulating haulage, the road network is constantly changing, and the movement of equipment around that network depends on the demands of the day,” explains Price. “That’s why RPMGlobal has developed the largest public equipment library available in HAULSIM, to provide accurate load and travel calculations that keep up with the demands of an ever-changing environment. The network can be updated so that the model is always current and precise.”

Despite fluctuations in commodity prices, the use of simulation technology by mining companies appears to be on the up and up. Price attributes this to the fact that simulations such as HAULSIM play a significant role in identifying areas for improvement and opportunities for increases in production. “Although commodity prices have risen, the same cost-cutting mentality exists and will continue even as the commodity prices rise further,” he says.

“This means the use of simulation will continue to grow as mining companies search to lower their costs.”

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Parkes - Centre of Australia's Transport Future The Melbourne to Brisbane Inland Rail line will transform freight movement in Australia – and Parkes will be central to this opportunity In one of the biggest investments ever seen in regional Australia, the Federal Government will fund the Melbourne to Brisbane Inland Rail project with $8.4 billion in equity to be provided to the Australian Rail Track Corporation (ARTC).

Inland Rail will complete the spine of the national freight network, delivering freight from Melbourne to Brisbane in less than 24 hours with competitive pricing and extremely high reliability.

Parkes is central to Inland Rail and to Australia’s transport future. Parkes is the only place in Australia where the north-south Newell Highway, the eastwest rail-line and the Inland Rail line ALL INTERSECT. Parkes is capitalising on its potential to become a major national transport node. Already, more than 80 per cent of Australia’s population can be reached in less than 12 hours from Parkes, creating a valuable competitive advantage for companies looking to develop logistics, distribution and manufacturing operations.

"The Parkes National Logistics Hub has been designed to operate 24/7 as a multi-modal transport facility with buffer zones and has been in the planning

for decades. Parkes is geographically located in the centre of NSW and at the epicentre of the national's transport and logistics network. Inland Rail will be a catalyst to change freight movement in Australia,” says Parkes Shire Council Mayor Ken Keith, OAM. The announcement by the Federal Government to start construction on Inland Rail has led directly to investment in Parkes, with Pacific National in October 2017 committing an initial $35 million to commence development of the company’s Parkes Logistics Terminal, which is set to be one of the largest private sector investments in freight infrastructure in regional Australia.

Once fully operational, Pacific National’s Parkes Logistics Terminal will have the capacity to process approximately 450,000 cargo containers each year, including the ability to haul

double-stacked containers from Parkes to Perth.

SCT Logistics has been operating in Parkes for over 10 years and they are now in the process of planning for the development of a ‘Logistics City’.

SCT Logistics CEO Glenn Smith says “When the Inland Rail is completed one of the great aspects of Parkes will be the ability to receive trains from Brisbane, Sydney and Melbourne Ports and even Adelaide ports - they are all overnight by rail (to Parkes). SCT sees great opportunities for importers, exporters and manufacturers, who have a requirement to move freight efficiently."

The Parkes National Logistic Hub consists of nearly 600 hectares of land, and can offer a diverse range of investment opportunities for companies looking to leverage from Parkes’ key strategic advantages.

APRIL/MAY 2018

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Finance

How can financial wellbeing help us ‘live the dream’?

Historically, the Great Australian Dream was the belief that home ownership led to a better life and was seen a symbol of both prosperity and success.

Over time, our understanding of happiness and ‘living the dream’ has changed. A report by the Financial Planning Association (FPA) of Australia (‘Live the Dream’, 2017) found that only 41 per cent of Australians see home ownership as living the dream. To most of us, this now means having the lifestyle of our choice (57 per cent) and having financial freedom and independence (54 per cent).

Rather than objects such as a house, we are now placing more value on experiences and the freedom to forge our own path.

However, even with these changes, only one in four Australians describe themselves as ‘mostly’ or ‘definitely’ living the dream.

About 48 per cent of us admit that having a low bank balance is holding us back from living the dream. Many of us also admit to having regrets about not saving enough and making poor decisions (37 per cent and 30 per cent, respectively). Some 73 per cent of Australians find it hard to plan their lives, with 36 per cent attributing this to not knowing what we want. It’s clear both money and the self-awareness to see we want from life play a huge role in living the dream.

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With so many of us confused about our goals, how do we realise what we want out of life? The answer lies in financial wellbeing.

The best part about improving financial wellbeing is that it’s unique to everyone and attainable to all — regardless of your bank balance. There are two key aspects to financial wellbeing that come into play: selfawareness and planning.

Becoming self-aware by recognising your relationship with money is crucial to financial wellbeing. This way you begin to understand your life goals and what truly motivates you.

The next step is to create a plan to help you reach your good life.

With 29 per cent of Australians too time poor to map out a plan for their future, many have turned to financial advisers. In fact, those who report they are living the dream are three times less stressed about money and three times more likely to see a financial adviser, compared to those who do not see themselves as living the dream. Of those who received financial advice, 79 per cent claimed their financial wellbeing had improved since seeing an adviser.

The ability to plan for and reach our goals is undeniably linked to our happiness, making financial wellbeing a major determinant in whether we’ll ever see ourselves living the dream.

Ryan Watson Tribeca Financial's CEO knows all about money management.

Financial Wellbeing in Australia

60%

Would invest in building a better future for their families if they had the money.

40%

Are scared that they won’t have enough money to retire.

1 in 4

Have not mapped out a plan for their financial future at all.

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Securing the Internet of Things Darren Baguley An agriculture, tech, mining, energy and business specialist.

WITH TECHNOLOGY MOVING AT A RATE OF KNOTS AND THE IOT ENABLING ALL MANNER OF DEVICES TO BE CONNECTED OR AUTONOMOUS, IT’S IMPORTANT TO PRE-EMPT FUTURE RISKS.

It’s lunchtime on a bright, sunny day at a primary school in the Australian wheat belt.

Right on the edge of town, the school’s playground overlooks crop fields and many of the children watch a harvester at work as they eat their lunch. Twenty minutes into lunch, the sound of the harvester changes.

Instead of working up and down the field as it has all morning, it is moving towards the school fence at top speed. A quick-thinking student realises it's heading straight for the playground and notifies the duty teacher before calling a warning to his schoolmates.

The teacher dashes into the school building to sound the alarm minutes before the harvester crashes through the fence, across the playing fields and into a toilet block before coming to a stop.

Three young children are injured, one of whom later dies in hospital. The subsequent police investigation discovers the automated harvester had been hacked into by a terrorist organisation that turned it against the school to cause mass casualties.

In 2018, this scenario may seem unlikely, fanciful even. But high-end harvesters and

tractors built in the past few years by major manufacturers such as Case New Holland, John Deere, Deutz-Fahr and Fendt are capable of autonomous operation, straight off the showroom floor. So while this equipment, currently in use on many large Australian crop farms, is capable of autonomous operation, every piece always has a human ‘machine minder’ in the cabin.

According to David Lamb, University of New England’s McClymont Distinguished Professor (Research) Precision Agriculture Research Group, the legal framework to allow this to happen — put simply, who would be liable if something went wrong? — is not yet in place. Nevertheless, with the capability being widespread, it’s only a matter of time 

Cybersecurity

“In the security space we've known security comes at a cost, and that's just the way things go.”

—

James Turner, IBRS security advisor and founder of CISO Lens.

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Cybersecurity before tractors and combines are working their way up and down Australian broadacre crop fields without a human in sight.

In the case of the transport industry, much of the publicity has been generated

by Google’s driverless car experiments.

However, driverless trucks are likely to start appearing on our roads long before we all have our own robotic chauffeur. A convoy of automated trucks has already platooned across Europe and reports by organisations as diverse as consultancy PWC and merchant bank Morgan Stanley suggest that at least the long-haul part of long-distance truck and train drivers’ jobs may be a thing of the past within two decades.

Future present

Science fiction writer William Gibson once said, “The future is here, it’s just not evenly distributed,” and there is no truer example of this than in the mining industry.

Because a mine is a closed, contained environment compared to a farm or a highway, automation has been an easier task for engineers and the technology is well developed. As a result, the mining sites of the big three miners in Western Australia’s Pilbara — BHP, Rio Tinto and Fortescue Metals — have all deployed automated

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trucks and drill and blast rigs with trains due to be rolled out later this year.

Mining companies are not just looking to automate vehicles; crushing plants, conveyor belts, coal and ore loaders have all been automated and all mines, both open cast and underground, are increasingly being covered with internet connected sensors.

This tendency toward automation is being collectively known as the Internet of Things (IoT), and it represents both an opportunity to make our lives better by eliminating dangerous, mundane, repetitive tasks and a threat to human life.

Economic fallout

While some people may consider the threat to human life an exaggeration, others believe it’s only a matter of time before there’s some sort of catastrophic event involving the IoT. While attacking a school with a harvester or crashing a truck into a school bus could involve heavy loss of human life, there is also the possibility of economic loss.

In 2002/3, Venezuelan oil workers used a virus to shut down the country’s oil terminals for eight hours as part of a bitter and protracted strike. In 2010, the Stuxnet virus — widely believed to have been developed by US and Israeli intelligence — was used to attack key supervisory control and data acquisition (SCADA) systems in Iran’s nuclear program. It’s quite possible to conceive that an unscrupulous company may seek to gain commercial advantage over a competitor by unleashing a stream of cyber attacks that disrupts its supply chain and causes it to default on a high value contract.

Industry analyst, cyber security advisor with IBRS and founder of CISO Lens, James Turner, doesn’t discount the possibility of any of these sorts of things happening.

“A few years back … Australian banks were being attacked by a botnet made of webcams and the Mirai botnet attack was made up of millions of devices, including personal digital recorders. Given that it’s absolutely predictable that anything electronic or mechanical will get connected to the internet, we have to plan for what happens when these devices are either targeted themselves or become collateral in an attack against something else.”

If we accept the risk that automated

devices could be compromised, then this begs the question whether it is possible to secure the IoT? Turner believes that it is, but he doesn’t downplay the difficulty of doing so. “[When] we come to the Internet of Things, there are several challenges.

There is the sheer scale of the problem and the cost that comes with that. Whose job is it to ensure that instead of the 20-cent microprocessor, the 40-cent one with inbuilt security is used?

“When it comes to an organisation deploying 20 million sensors, the ones with inbuilt security double the cost. That can be a tough pill to swallow for people who don’t appreciate what’s at stake. In the security space, we’ve known that security comes at a cost, and that’s just the way things go.”

A further issue is the sheer number of devices already out there. Turner explains that when looking at people’s home computers, the security industry recommends keeping operating systems up to date, using current security software and using two-factor authentication and a password that is unique for any website that matters — such as your bank. For most people who regularly use computers, these measures are common sense.

The issue with the IoT, however, is that “these IoT devices are being deployed with a basic level of capability,” says Turner.

“That means often a default username and password, which also means when you know the default password for one device, you know it for them all. And unless someone changes them all away from the default, then a hacker can write a script and take control of all of them.”

Risk versus cost

Whether it’s a mine site that may have thousands of devices ranging from trucks to sensors on the haul road or individual harvesters, tractors or prime movers, Turner poses the question, “When making any decision we balance risk versus reward versus cost. Security is a moving target because the risk may be worth it to one person, but not to another. [Nevertheless], whose job is it to make sure that each of these devices is running the latest software, and that the password is changed from the default?”

Turner believes that organisations know securing the IoT space is important,

but he questions whether “we’ve yet to experience sufficient pain to drive a change in behaviour. We still want all the reward with low cost and to ignore the risk.”

While that may be true in some industries, it is perhaps not the case in the mining industry. According to Hays Regional Director for Resources & Mining, Chris Kent, mining companies definitely recognise the risks inherent in the IoT. “If you look at all the big miners — Rio, BHP, FMG — they’ve got their control centres in Perth. [But the result of this automation is that] cybersecurity is obviously an issue. A lot of the new SCADA equipment is essentially at risk of hack if the appropriate security is not in place and as a result, the heads of technology of these big companies now have cybersecurity teams.”

There’s an old Chinese curse, “May you live in interesting times!” While the IoT offers a myriad of benefits to industries, there are also risks and only time will tell whether these are outweighed by the benefits.

APRIL/MAY 2018

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Infrastructure

Sustainability gets the green light AUSTRALIA IS NATION-BUILDING ON A SIGNIFICANT SCALE. HERE, FIVE DEVELOPMENTS THAT HIGHLIGHT THE LONG-TERM SUSTAINABILITY OF OUR INFRASTRUCTURE, COMMUNITIES AND CITIES.

Riley Palmer A writer and editor, Riley loves sinking her teeth into juicy news and sharing tales of the land.

images: the Green Building Council of Australia With population growth and climate change on the top of people’s minds the world over, sustainable living and infrastructure are becoming both an expectation and a necessity. In a nation like Australia, which is prone to extreme weather conditions, conserving energy, water and resources is a must. As a result, the adoption of green building practices has skyrocketed, especially since 2002 when the Green Building Council of Australia (GBCA) was established to assess the design, construction and performance of buildings, and subsequently grant them a one- to six-star rating — six demonstrating global leadership.

Since then, sustainable buildings have become far more commonplace, with the Global Real Estate Sustainability Benchmark consistently ranking the Australian real estate market as the world’s greenest.

While the environmental benefits of creating sustainable buildings are clear, as many individuals and organisations advocate for best practice, the social and financial advantages are becoming increasingly obvious, too. Green buildings routinely improve the health and productivity of occupants, increase building values and reduce operating costs.

We speak with Romilly Madew, CEO of the GBCA, who shares insights into five of the nation’s greenest buildings, and the features that set them apart.

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Ingkarni Wardli

Location: Adelaide, South Australia Year: 2010 Architect: DesignInc Rating: 6 Star Green Star, Education Design & As Built v1 The University of Adelaide’s Ingkarni Wardli was the first education building in Australia to attain a 6 Star Green Star rating. The eight-storey building provides contemporary teaching facilities and honours the Indigenous land it stands on — its Kaurna name means ’ place of learning or enquiry’.

What differentiates it from other teaching facilities are the environmental strategies incorporated into design.

“This was undoubtedly a test case for a range of sustainability innovations,” says Madew, “from the geothermal energy storage system to the underfloor air distribution system, which provides 100 per cent fresh air.”

There are also sun-shading louvres, thermal chimneys, hydronic cooling loops, a rooftop tri-generation plant that powers the building and rainwater-harvesting into underground tanks.

Madew believes that the most interesting legacy is Wardli's status as a ‘living laboratory’ for engineering students, giving them real-world experience without impacting operations.

Infrastructure

IMAGE: DIANNA SNAPE

Council House 2

Location: Melbourne, Victoria Year: 2006 Architect: DesignInc Rating: 6 Star Green Star, Office Design & As Built v1 When Council House 2 (CH2) was built, it was at the cutting edge of sustainable infrastructure. “The most important thing to emphasise about CH2 is its significant role as a beacon of sustainability,” says Madew. “The building’s energy efficiency and energy-production features, including solar photovoltaic cells and integrated wind-turbines ... were revolutionary, and delivered an 87 per cent reduction in greenhouse gas emissions compared to buildings of similar size. This alone helped to establish the business case for green building. When coupled with the productivity improvement, which saves Council an estimated $2 million a year, it’s easy to see why this building remains a green icon.”

A CSIRO report a year after CH2 had been built showed staff productivity had increased by 10.9 per cent. “Indoor Environmental Quality matters,” says Madew. “Our thermal environment and air quality, our visual environment and acoustics ... affect our health and ability to perform daily tasks.”

One Central Park

Location: Sydney, New South Wales Year: 2013 Architect: Foster and Partners, Ateliers Jean Nouvel and PTW Architects Rating: 5 Star Green Star, Multi-Unit Residential Design & As Built v1 One Central Park has been recognised on an international level, winning the Council on Tall Buildings and Urban Habitat’s award for the best tall building in the world in 2014. This accolade was largely due to its vertical garden, which, at 150 metres, is the world’s tallest.

“External green walls have a lot of benefits,” explains Madew. “Aside from being attractive, they clean the air of pollutants, can reduce the surface temperature of walls, limit solar gains and with it, the need for artificial cooling. Green walls have also been found to boost health and wellbeing, and biodiversity.”

One Central Park’s commitment to sustainability is further evident in its tri-generation power plant, a water recycling and blackwater treatment plant. Each apartment is also fitted with smart metering screens, which provide real-time monitoring of electricity, gas and water consumption.

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I M A G E : F I L I P P O D A L L' O S S O

Infrastructure

“The Sydney Opera House dispels the myth that it’s ‘too hard’ to improve the sustainability of older buildings.”

— Romilly Madew, GBCA

Sydney Opera House

Location: Sydney, New South Wales Year: 1973 Architect: Jørn Utzon Rating: 4 Star Green Star, Performance V1 When reflecting on how green a building is, it’s important to consider not just what the building takes, in terms of resources such as water and energy, but also what and for how long it gives — which is why the Opera House is one of Australia’s most sustainable buildings. Pioneering features implemented include a seawater cooling system, which powers the heating and air conditioning.

“An early interpretation of the ‘chilled ceiling’ remains in the Drama Theatre, to help control air temperature,” says Madew. “The building was designed with durable materials to meet a 250-year lifespan. Over the past decade, it has welcomed more visitors than ever, but has reduced energy usage by 10 per cent through a lighting retrofit.

For example, LED lighting in the Concert Hall has cut electricity consumption by 75 per cent.”

Furthermore, the building maintains its heritage while also meeting sustainability benchmarks through its ecofriendly cleaning methods.

“Baking soda is used for concrete cleaning and olive oil for bronze restoration,” says Madew. “The Opera House dispels the myth that it’s ‘too hard’ to improve the sustainability of older buildings.”

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Fast Facts

350

There are 23 green walls on One Central Park, spanning 1,200 square metres. There are 350 species of plants used in the green walls alone.

$1.85b The New Royal Adelaide Hospital is 258,000 square metres, and is valued at $1.85 billion.

New Royal Adelaide Hospital

Location: Adelaide, South Australia Year: 2017 Architect: DesignInc and Silver Thomas Hanley Rating: 4 Star Green Star, Healthcare Design v1 The New Royal Adelaide Hospital has 800 beds and 40 operating theatres, designed for the needs of the 80,000 patients it sees annually. Some of the building’s environmental innovations include water and power metering to track consumption, lowVOC paints, flooring and acoustic insulation, and a co-generation system that turns waste heat into energy. “It generates far fewer greenhouse gas emissions than standardpractice healthcare facilities,” says Romilly.

The design of the hospital, with more than 70 courtyards, terraces and sky gardens, is optimised for daylight, which has been proven to aid patient recovery and decrease the length of stay.

“It offers the best possible healing environment with greater levels of privacy, comfort and infection control,” says Madew.

The hospital is also one of the most technologically advanced facilities of its kind: it uses robots to deliver food and equipment, has a wireless patient–nurse call system, and — able to operate self-sufficiently for up to 48 hours and designed to prevent a structural collapse — it is earthquake proof.

“It’s one of the most cutting-edge and technically complex Green Star buildings in Australia,” says Madew.

Ben Smithurst A lifestyle, motoring and travel writer with a penchant for the humorous.

Look Ma, no hands!

DRIVERLESS CARS ARE COMING. JUST HOW QUICKLY MIGHT SURPRISE YOU…

This year, Audi will reveal its new fourth generation, rootand-branch overhaul of the A8 sedan, a giant luxo-barge of an executive (non-stretch) limo. This would normally be news only to motoring enthusiasts and businessmen who expect never to drive their car, as more than half of all day-to-day A8 drivers are ‘the help’. They work either for hire car companies or are private chauffeurs. The owners sit in the back, barking orders like any respectable corporate titan.

The Audi A8’s main rivals are similarly lavish, $200,000-plus German luxo-barges: the Mercedes-Benz S-Class, the BMW 7 Series, or an English Jaguar XJ or Lexus LS. This is the ultra-refined, ultra-high-tech end of the market, where companies’ shiniest, most impressive new gadgetry debuts. At this level, choices aren’t made on price but on whether you’ll fit in at the car park of the Australian Club.

That halo technology eventually filters down to more utilitarian everyman vehicles. Otherwise, though, the release of an all-new Audi A8 would be less than news to most of the motoring public, except for one thing — it drives itself. Or

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rather it can, up to a point. The new Audi A8 is the world’s first production car capable of Level 3 autonomous driving.

Which, to paraphrase Ron Burgundy, is kind if a big deal.

There are six ‘levels’ of autonomous driving. Established

by SAE International in 2014, the stages were defined to be used as common reference points to assist legislators, engineers and the public in understanding just how capable a particular vehicle is (see Level Up! box).

In the new A8, and its more stylish but mechanically identical A7 sibling, the driver needn’t pay much attention to the road — in some (very well defined) circumstances.

In traffic, for example, on well-marked roads or on the autobahn, the driver can read a book, use a laptop or eat cereal. Audi’s slick limo will steer itself, accelerate and brake, turn and cruise, and avoid other traffic, whether or not you’re paying attention. If it needs you to take over, it will give you 10 seconds warning before you need to take control.

It scans the road ahead, negotiating the world with a combination of GPS, cameras and sensors, including Lidar, a

Man & Machine

sort of radar-by-laser. One day the machines will rise up and destroy us all, and this will be considered a significant step.

But for now, we’re still in charge!

The self-driving car has long been a holy grail of automotive manufacturers. While public perception has recently caught up, Audi and its rivals have been building development cars that perform incredible feats sans driver for decades. In 2010, an autonomous Audi TT used precision GPS to complete Colorado’s Pikes Peak hill climb in just 27 minutes — about 10 minutes slower than a professional racing driver would have managed in the same car. But still, not bad.

This was considered a curiosity by most of the car-buying public, if they’d heard of it at all, and even by the automotive press. However, as US tech bible Wired noted in January, “in the past five years, autonomous driving has gone from ‘maybe possible’ to ‘definitely possible’ to ‘inevitable’ to ‘how did anyone ever think this wasn’t inevitable?’”

Every significant motoring marque is pursuing the tech,

keen to rebrand as a ‘mobility provider’ before the concept of car ownership goes kaput and 90 per cent of us Uber to work in driverless mobility boxes.

Google’s self-driving car project launched in 2009, but Intel and Apple, among others, are working on their own tech. Mercedes, BMW, Audi, Ford, Honda, Nissan, Tesla; basically everyone, really, has debuted concept cars that show where they’re going, mapping out a rough timeline to get there.

Last year, Elon Musk announced every Tesla would feature eight cameras, radar, a dozen ultrasonic sensors and a powerful super-computer, declaring (in trademark fashion, well ahead of his tech teams’ progress) that self-driving Teslas were soon to arrive. In January, Toyota demonstrated a Lexus LS 600L, an Audi A8 rival, that used Lidar to ‘see’ 200 metres in every direction.

Things are happening in Australia, too, regardless of, or sometimes as a challenge to, infrastructure and laws. Last year, the Mercedes-Benz autonomous driving program team took a development test S-Class from Sydney to Melbourne.

It showed similar abilities to the new A8: steering indefinitely on freeways, changing lanes when prompted, slowing for bends on winding roads.

It passed with close to flying colours — although, like anyone not familiar with Melbourne, was eventually baffled by hook turns. It was also not strictly street legal; Mercedes received special permission to conduct the test, within strict boundaries (someone was always in the driver’s seat).

Which points to the main roadblock to the progress of self-driving vehicles. Worldwide, tech is moving much faster than legislation. Road laws are even less in sync in Australia.

While autonomous test cars are already cruising roadways from California to London, there are issues. Foremost is infrastructure: cars must be able to read road signs and understand non-uniform road markings. In Australia, the A8’s full suite of capabilities will be disabled until legislators are convinced it is safe.

Second involves moral and ethical issues. Namely: if a car crashes, who is at fault? Audi got around that simply last year: by owning it. The brand’s boss of pre-development of automated driving, Dr Thorsten Leonhardt, told Australian journos that his company was confident in its technology and would accept the insurance liability risk. Leonhardt didn’t explain what a car’s AI would do when faced with a choice of, for example, either ploughing into a crowd to save the driver or driving off a cliff to save the crowd.

Level 3 capability is already here. Levels 4 and 5 are anywhere from a few years to a decade away. Audi, and the rest, have time to figure it out. For now, it’s the boss barking orders from the back seat. Eventually, it’ll be all of us.

APRIL/MAY 2018

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Puzzles

CROSSWORD

L N T I M P T A T A A E G

I A F S A A E N N F N R N

R I I N N N A L A T T T A

B D R T W C T D E T S N N

A A T N A C S E D N S A T

R R E V E U Q I T N A N P

E P O L E T N A O K O E I

C A N T E E N C H A N T I

SOLUTIONS:

L N T I M P T A T A A E G

I A F S A A E N N F N R N

R I I N N N A L A T T T A

B D R T W C T D E T S N N

A A T N A C S E D N S A T

R R E V E U Q I T N A N P

E P O L E T N A O K O E I

C A N T E E N C H A N T I

PANTS PREGNANT RADIANT RELIANT TENANT VACANT

L T G N H A I S I E P H E

I L N A A F N L N R N T R

A Y N D E H E T W O K N P

N T U D P R C L L U C A A

L T G N H A I S I E P H E

CHANT CONSTANT CURRANT DEFIANT DESCANT DISMANTLE

T T C U R R A N T E L P Q

I L N A A F N L N R N T R

ELEPHANT ENCHANT GIANT INSTANT PANTHER

Find all the words listed hidden in the grid of letters. They can be found in straight lines up, down, forwards, backwards or even diagonally. Theme: ANT WORDS

A Y N D E H E T W O K N P

AusBiz.

ANTELOPE ANTENNA ANTIQUE BRILLIANT CANTEEN

WORD SEARCH

N T U D P R C L L U C A A

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DOWN 1. Monotony 2. Become tattered 3. Unknown writer 4. Refreshments booth 5. Widening 6. Light-bulb inventor 9. Niggling worry 11. Documents fastener 13. ... sleeping dogs lie 15. NE US state 16. Personal money order 18. Dally 19. Director, Woody ...

21. Assignment 22. Prison

T T C U R R A N T E L P Q

ACROSS 1. Lovers’ squabbles 7. Undid (skirt) 8. Fear 10. Children 12. Rissole 14. Yemen port 16. Burlesque actress 17. Exerted (oneself) 20. Intensifying (of war) 23. Relieved 24. All of space, the ...

25. Situate