Driverless trucks to drive Rio Tinto's profits

Rio Tinto accelerates the rollout of its mine of the future.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Mining giant Rio Tinto Limited (ASX: RIO) announced that it will become the owner of the world's largest fleet of driverless trucks.

The company already has a handful of such vehicles in operation, but has signed a deal with Japanese firm Komatsu to buy at least 150 Autonomous Haulage System trucks over the next four years.

Mines of the future
The deal with Komatsu is part of Rio Tinto's 'Mine of the Future' programme, which aims to increase productivity, reduce costs, and improve health, safety and environmental performance.

The trucks will be used in Rio's iron ore mines in the remote Pilbara region of Western Australia. Packages to draw mine workers to the region — attractive salaries, food and accommodation, and weekly return flights home — have contributed to a 40% rise in operating costs in the past five years.

The new driverless trucks will be remotely-controlled from Rio's operations centre at Perth — almost 1,000 miles from the mines.

Rio isn't the only miner looking to slash costs in the Pilbara region. Fortesque Metals Group (ASX: FMG) has recently announced that Caterpillar (NYSE: CAT) will supply it with 12 driverless trucks by the end of the year, and is aiming to increase the fleet to 45 by 2015.

Meanwhile, in the neighbouring state of South Australia, the world's largest miner, BHP Billiton Limited (ASX: BHP), is reportedly planning to run automated haulage trucks 24/7 for five to six years in the $30 billion expansion of its Olympic Dam mine.

Good for shareholders
Driverless vehicles have come a long way since the US Defense Advanced Research Projects Agency inaugurated an annual automated vehicle challenge in 2003.

In 2005, only five of 23 prototype vehicles completed a 132-mile course in the desert. Technology has advanced so rapidly as to prove the viability of driving through an urban area without a driver.

Demand for driverless vehicles should be good news for shareholders of manufacturers and suppliers, such as Komatsu, Caterpillar, and Oshkosh, whose TerraMax military truck was developed to meet the US Congress goal of having one in three ground combat vehicles self-driving by 2015.

Shareholders in the big miners, such as BHP Billiton and Rio Tinto, should also be beneficiaries from the increased production and margins that driverless trucks will deliver.

Rio's announcement today signals a 15-fold expansion of its automated fleet from its previous plan to double the number of trucks from five to ten. That's a significant acceleration of the rollout, and the Mine of the Future could be closer than analysts had hitherto been anticipating.

If you are looking for investing ideas, request our free report, The Motley Fool's Top Stock For 2011-12. Click here, whilst it's still free and available.

This article, written by G A Chester, was originally published on It has been updated. Authorised by Bruce Jackson.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »