AI Helps Chinese Coal Mines Generate Super Profits

The mine, operated by China National Coal Corporation, has not only maintained growth amid falling coal prices but also achieved impressive returns, outpacing the world's top investment banks.

Despite an 18% drop in coal prices by 2024, Dahaize has continued to thrive, achieving a net profit margin of 40% for the year. The mine recorded revenue of 9.1 billion yuan ($1.25 billion) and net profit of 3.8 billion yuan, with profit margins comparable to luxury brands. By comparison, Wall Street giant Morgan Stanley achieved a profit margin of just over 20% last year.

Liang Yunfeng inspects intelligent machinery at a Dahaize underground coal mine. Photo: JIM

Dahaize's success is the result of a "comprehensive bet" on automation, said Liang Yunfeng, the mine's chief executive. It's a revolution so technically challenging that many once thought it was impossible.

The Dahaize mine is considered the world's smartest coal mine, using artificial intelligence (AI) and 5G technology to monitor and coordinate the entire mining process. With an area of ​​266 km² and coal reserves of up to 3.2 billion tons, Dahaize far surpasses other underground coal mines with an annual output of 20 million tons.

Since starting production in 2023, with just 980 workers, the mine has deployed an automated system that includes 5G-controlled robots, an autonomous tunneling system, and AI algorithms that coordinate everything from mining to loading railcars. Each worker here now generates nearly $1 million worth of output per year.

Underground, coal cutters use AI and inertial navigation technology and lidar to cut coal seams with millimeter precision, adjusting their cutting paths in real time. Drones scan tunnels and fix problems in eight minutes, instead of hours with traditional methods. Autonomous trucks, guided by underground positioning systems, transport coal from underground to washing plants, all controlled by AI.

Although the Dahaize mine has reduced the number of direct workers, productivity and profits have grown strongly. The combination of government funding, 5G infrastructure and AI technology has made the mine a model for other industries in China.

The mine’s success also reflects the differences between China and the West in the adoption of automation. While some politicians in the US worry that automation could hurt jobs, the Dahaize mine demonstrates that smart technology can help maintain productivity and profitability, even as coal prices fall.

Despite many difficulties, especially resistance from workers unfamiliar with AI technology, Liang shared that many people have gradually changed their views and realized that automation not only makes work safer but also completely upgrades the mine's operating system and value chain.

Ngoc Anh (according to Dahaize, SCMP, Journal of Intelligent Mine)

Source: https://www.congluan.vn/ai-giup-mo-than-trung-quoc-tao-ra-sieu-loi-nhuan-post340971.html