* Mining belatedly embraces digital innovation to boost efficiency
* Data, automation to benefit mining up to $373 bln by 2025
* Mining firms forging partnerships with tech companies
By Eric Onstad
GARPENBERG MINE, Sweden, Oct 4 (Reuters) - Hundreds of metres below the lush forests of rural Sweden, one of the world’s most ancient mines has been transformed into one of the most modern.
Sensors linked to robotic equipment in Boliden’s Garpenberg zinc mine – which has been in operation since the 13th century - feed data to operators above ground as screens blink and flash in a nearby control room.
Boliden is at the forefront of a global transformation in which mining companies are exploiting huge amounts of data being crunched by computers to dramatically boost productivity and cut costs.
The advances at Garpenberg, however, have only scratched the surface in exploiting the new technology. Fully automated mines are on the horizon.
"We have a way to go. There's a big possibility of working 24 hours a day with more automation," said Jenny Gotthardsson, general manager at Garpenberg.
To the north of Garpenberg, at other Boliden mines, Volvo is breaking new ground by testing self-driving trucks underground along with Ericsson which has installed cutting edge 5G mobile technology in a pilot.
Mining is one of the last sectors to use a surge in computer processing power, cloud data storage and complex algorithms to make sense of huge amounts of scattered information - routine in today’s retail and manufacturing businesses.
The change could benefit the industry and its stakeholders by up to $373 billion by 2025, according to consultancy McKinsey.
"That value is basically by improving the current processes with the current generation of equipment," said McKinsey partner Richard Sellschop.
The estimate includes higher output and lower costs to boost profits of mining companies, but also the knock-on impact for mining equipment makers, countries who collect tax from miners and consumers who will benefit from lower raw material costs.
But it also points to seismic change for mining jobs that could spark conflict in developing countries if low-skilled miners are no longer needed in automated operations.
Some workers will retrain for high-tech jobs but full automation will mean fewer jobs overall. There may be opposition from trade unions in places such as South Africa.
"Everywhere where mechanization has been implemented, even in Australia, it has led to massive retrenchments. We know what’s coming," said Livhuwani Mammburu, spokesman for the National Union of Mineworkers.
"Companies must start training workers in preparation for mechanization and other technologies."
Boliden was an early mover but other mining groups are also adopting the latest technology, in some cases cloaking their initiatives in secrecy to get ahead of rivals.
Los-Angeles-based technology firm DAQRI said mining groups using its new augmented reality helmet insisted on anonymity to guard their advantage.
DAQRI's futuristic Smart Helmet funnels data to workers, projecting instructions on repairing equipment, thermal images, map data or video conferences with experts anywhere in the world.
Rio Tinto, the world's second biggest iron ore producer, aims to deliver $5 billion of productivity improvements over five years, much of it through data and technology.
Chief Executive Jean-Sébastien Jacques told Reuters earlier this year that each of its global fleet of around 900 trucks has some 40 sensors.
"If we can analyse this data in real time and convert this data into insight, then we will be able to run those trucks even better," he said.
Rio already has a smartphone app with data on its fleet of trucks in the rich iron ore Pilbara area of Western Australia.
BHP, the world's biggest mining group, said recently it was trialling sensors to analyse properties of metal in real-time at its huge copper operation Escondida in Chile.
The recent move to exploit data and technology in mining has helped the sector recover from a long-term slump in productivity estimated by accountancy firm EY to be as much as 40 percent.
Since 2000 miners have been competing to feed China's huge appetite for metals and so paid less attention to costs and efficiency.
The fall in mining productivity hit bottom in about 2013 and has been clawing higher since then, with some companies seeing productivity rising by 15-20 percent, according to EY.
"This uptick coincides with the trend toward adoption of digital technology and innovation among many companies," said Paul Mitchell, EY's global advisory leader in mining.
The biggest gold producer Barrick Gold Corp plans to spend $100 million on technology in a partnership with Cisco Systems while Australia's South32 this year forged an alliance with General Electric.
In 2006, the Garpenberg mine, located about 180 km northwest of Stockholm in an area where mining has occurred since 375 B.C., was struggling to compete. But in 2013 Boliden started transforming its operations with automation and data. It is now one of the world's most productive zinc mines.
"We decided to become an early adopter," said Mikael Staffas, president of Boliden Mines. An expansion of output also helped lower costs through economies of scale.
By 2016, it had halved cash costs to 44 cents per lb, adjusted for inflation, according to consultancy Wood Mackenzie.
Thousands of sensors, including ones that track every worker, send data above ground at Garpenberg, boosting safety and allowing more efficient ventilation and ore loading.
Swedish companies Sandvik, Atlas Copco ABB and Volvo are among those to use Boliden as a testing ground for new products.
Kristofer Ruth, a miner who has worked there for 11 years, rarely ventures underground anymore. He manoeuvres a joystick that shovels ore into an automated truck about 800 metres below.
He no longer wastes time evacuating the mine during twice-daily blasting and can move the vehicle into areas that might be unsafe for workers.
"We can work at least six hours more a day," he said. (Additional reporting by Clara Denina and Barbara Lewis and Zandi Shabalala; Editing by Veronica Brown and Anna Willard)