May 17, 2020

Is it time for Adani Mining to raise the white flag on its Carmichael project?

Adani Mining
Australia
Coal
Report
Admin
3 min
Is it time for Adani Mining to raise the white flag on its Carmichael project?
The hits just keep coming for Adani Mining and its controversial Carmichael coal mine in Queensland, Australia.The Guardian reported yesterday the compa...

The hits just keep coming for Adani Mining and its controversial Carmichael coal mine in Queensland, Australia.

The Guardian reported yesterday the company has stopped engineering work on the $16.5 billion project, advising four major engineering contractors to stop work around the mine including the joint venture rail line and expansion of Abbot Point port.

According to the Guardian report, it makes no sense halting work at this stage even as a savings measure, raising speculation the company is preparing to scrap the massive project.

Tim Buckley of the Institute for Energy Economics and Financial Analysis said to stop work at this stage “just crucifies the project, it all goes out the window”.

“The minute Adani stops moving forward, the project is just dead, in my view,” Buckley said. “And the reason is you’ve got billions of dollars of debt in Australia and they’ve got this interest bill.

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“They’ve been drawing a line in the sand and that is that they need financial close by October 2015.”

Adani Mining released a statement supporting its commitment to the Carmichael project:

"For the past six to 12 months, Adani has maintained a level of investment, jobs and sub-contractor engagement for its mine, rail and port projects in anticipation of finalising approvals and decisions. The project budget was based, understandably, on these anticipated approvals timelines and milestones," the company said in a statement. 

"As a result of changes to a range of approvals over that time, it’s necessary to synchronise our budget, project timelines and spending to meet those changes. Adani has made a commitment to build a long term future with Queensland that will deliver 10,000 jobs and $22 billion in royalties and taxes that will be reinvested back into community services.

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"However, it is important to note we are now into the fifth year of development and approvals and therefore the need to finalise those approvals and timelines is critical."

To add insult to injury, a new report by the Climate Council says coal mining in the Galilee Basin – the Carmichael coal mine location -- is not environmentally or economically sustainable.

“If we’re to stay in within carbon budget and avoid dangerous climate change, we can't have any new coal developments anywhere around the planet,” said Professor Tim Flannery, chief councilor and co-author of the report.

“In fact we're going to have to close prematurely a quite a number of coal mines if we were to stay within that budget. 

“So economically it doesn't make sense, and analysts say they can't see a recovery in the coal price for years into the future, so economically the mine doesn't make sense and as I said environmentally it doesn't make sense either.”

Since its inception the Carmichael coal project has faced a wide array of criticism from environmentalists and Indigenous Landholders. Heightened pressure to protect the Great Barrier Reef has caused major roadblocks for the project as well as mounting lawsuits. 

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May 16, 2021

McKinsey: adopting a smart approach to big data

McKinsey
Big Data
AI
Machine Learning
4 min
Industrial companies are using AI to improve plant operations. To be successful, they will need to leverage big data with the help of domain experts

Industrial companies are embracing artificial intelligence (AI) as part of the fourth digital revolution. AI leverages big data; it promises new insights that derive from applying machine learning to datasets with more variables, longer timescales, and higher granularity than ever.

Big Data

According to a new McKinsey report, using months or even years’ worth of information, analytics models can tease out efficient operating regimes based on controllable variables, such as pump speed, or disturbance variables, such as weather. These insights can be embedded into existing control systems, bundled into a separate advisory tool, or used for performance management.

Artificial Intelligence

McKinsey recommends that to succeed with AI, companies should leverage historical data via automation. They will need to adapt their big data into a form amenable to AI. This ‘smart data’ can improves predictive accuracy and support root-cause analysis. Additionally, bolstering and upskilling expert staff to manage the process can result in an EBITDA increase of 5 to 15%.

Smart Data

A common failure mode for companies looking to leverage AI is poor integration of operational expertise into the data-science process. McKinsey advocates applying machine learning only after process data have been analysed, enriched, and transformed with expert-driven data engineering using the following steps:

Define the process

Outline the steps of the process with experts and plant engineers, sketching out physical changes (such as grinding and heating) and chemical changes (such as oxidation and polymerization). Identify critical sensors and instruments, along with their maintenance dates, limits, units of measure, and whether they can be controlled.

Enrich the data

Raw process data nearly always contain deficiencies. Thus, creating a high-quality dataset should be the focus, rather than striving for the maximum number of observables for training. Teams should be aggressive in removing nonsteady-state information, such as the ramping up and down of equipment, along with data from unrelated plant configurations or operating regimes. Generic methods to treat missing or anomalous data should be avoided, such as imputing using averages, “clipping” to a maximum, or fitting to an assumed normal distribution. Instead, teams should start with the critical sensors identified by process experts and carefully address data gaps using virtual sensors and physically correct imputations.

Reduce the dimensionality

AI algorithms build a model by matching outputs, known as observables, to a set of inputs, known as features, which consist of raw sensor data or derivations thereof. Generally, the number of observables must greatly exceed the number of features to yield a generalized model. A common data-science approach is to engineer input combinations to produce new features. When combined with the sheer number of sensors available in modern plants, this necessitates a massive number of observations. Instead, teams should pare the features list to include only those inputs that describe the physical process, then apply deterministic equations to create features that intelligently combine sensor information (such as combining mass and flow to yield density). Often, this is an excellent way to reduce the dimensionality of and introduce relationships in the data, which minimize the number of observables required to adequately train a model.

Apply machine learning

Industrial processes can be characterized by deterministic and stochastic components. In practice, first principle–based features should provide the deterministic portion, with machine-learning models capturing the statistical portion from ancillary sensors and data. Teams should evaluate features by inspecting their importance and therefore their explanatory power. Ideally, expert-engineered features that capture, for example, the physics of the process should rank among the most important. Overall, the focus should be on creating models that drive plant improvement, as opposed to tuning a model to achieve the highest predictive accuracy. Teams should bear in mind that process data naturally exhibit high correlations. In some cases, model performance can appear excellent, but it is more important to isolate the causal components and controllable variables than to solely rely on correlations. Finally, errors in the underlying sensor data should be evaluated with respect to the objective function. It is not uncommon for data scientists to strive for higher model accuracy only to find that it is limited by sensor accuracy.

Implement and validate the models

Impact can be achieved only if models (or their findings) are implemented. Taking action is critical. Teams should continuously review model results with experts by examining important features to ensure they match the physical process, reviewing partial dependence plots (PDPs) to understand causality, and confirming what can actually be controlled. Additional meetings should be set up with operations colleagues to gauge what can be implemented and to agree on baseline performance. It is not uncommon for teams to convey model results in real time to operators in a control room or to engage in on-off testing before investing in production-grade, automated solutions.

Conclusion

Industrial companies are looking to AI to boost their plant operations—to reduce downtime, proactively schedule maintenance, improve product quality, and so on. However, achieving operational impact from AI is not easy. To be successful, these companies will need to engineer their big data to include knowledge of the operations (such as mass-balance or thermodynamic relationships). They will also need to form cross-functional data-science teams that include employees who are capable of bridging the gap between machine-learning approaches and process knowledge. Once these elements are combined with an agile way of working that advocates iterative improvement and a bias to implement findings, a true transformation can be achieved.

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