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Linda Han, Huawei's Corporate Vice President, CEO of Oil, Gas & Mining BU
Today, top customers in resource-based industries agree that intelligence, low-carbon, and alternative options for critical infrastructure are vital for maintaining business continuity.
Governments worldwide consider AI a critical national capability, with 50% of countries having already released AI strategies. China's 2024 Report on the Work of the Government has emphasized the country's priority to modernize its industrial system and develop new productive forces at a faster pace. The government aims to spur industrial innovation by making advances in science and technology. It looks to establish a strong foundation for the real economy, strengthen advanced manufacturing, press ahead with new industrialization, and transform traditional industries on top of fostering emerging industries. The government will work to strengthen the position of enterprises as the main innovators. It has plans to build innovation consortium with close cooperation between upstream and downstream players, as well as promote integration and innovation across the industry, academia, and research institutions. Ultimately, the goal is to accelerate the transformation of scientific and technological achievements into real productivity. These efforts will inject new vitality into traditional industries, making them higher-end, smarter, and more eco-friendly.
Forty-four countries worldwide have committed to achieving carbon neutrality and are promoting policies and legislation to reach this goal. At the UN Climate Change Conference held on November 30, 2023, 130 nations jointly signed a significant pledge to triple the world's renewable energy generation capacity by 2030. China has also pledged to reach peak carbon emissions before 2030 and achieve carbon neutrality by 2060. Green development is key, and new productive forces should be inherently eco-friendly. However, China's energy consumption per unit of GDP is 1.4 times the world average and 2.1 times that of developed countries. The six traditional energy-intensive industries (thermal power, steel, non-metallic ore products, oil refining and coking, chemicals, and non-ferrous metals) consume over 50% of China's total energy, with CO2 emissions making up nearly 80%. In 2023, fossil energy consumption accounted for more than 82.5% of the total consumption in China, with coal consumption making up 55.3%. In addition, China depends on foreign supplies for 70% of its oil resources and 40% of its gas.
Due to the shifting global political and economic climate, a great number of countries are placing greater emphasis on infrastructure security. As a result, many customers are seeking alternative options for building critical infrastructure to maintain business continuity.
Intelligence, low-carbon, and business continuity objectives and results should greatly enhance the total factor productivity. As far as the digitalization of resource-based industries is concerned, developing new productive forces involves "Three Leaps":
1. Advancing means of labor from mechanical and automated to intelligent and low-carbon, with "Industry + AI" as typical new productive forces
The means of labor encompasses production tools, infrastructure, and energy facilities. The shift towards intelligent means of labor is the most important manifestation of new productive forces. In the past, although tools were mechanized and automated, human expertise played a significant role in production. Today, AI is being integrated into various industries, including mining, oil and gas, metallurgy, and chemicals, to achieve intelligent linkage and autonomous decision-making. This integration will lead to continuous improvements in production safety and efficiency, along with further benefits.
In the underground mining scenario, Shandong Energy Group utilizes the Pangu mine model to verify the pressure relief borehole system's construction quality. This reduces the manual review workload by over 80% and shortens the review from 3 days to just 10 minutes. The Group also employs the large model for intelligent medium density control in heavy-medium coal separation, increasing the yield of refined coal by more than 0.2%. In the open pit mining scenario, a great number of Chinese mining enterprises have implemented unattended methanol-powered mining trucks and pure electric mining trucks, leveraging cutting-edge technologies like fast charging and microgrid systems to reduce carbon emissions.
Hunan Iron & Steel Group, a major player in the steel industry, has adopted the Pangu steel large model to improve the accuracy of scrap steel grading to over 90%. Its subsidiary, Xiangtan Iron & Steel Group (Xiangtan Steel), also uses the model to analyze the compatibility and feature correlation between different raw coals, which reduces the coke cost by 5~20 CNY per ton. At Xiangtan Steel, the intelligent crane scheduling system, deployed by the large model team, can use algorithms to generate intelligent crane scheduling plans. It only needs one minute to "think" and issue a new scheduling plan that covers the next 30 minutes.
In the oil and gas industry, China National Petroleum Corporation (CNPC) used 7000 square kilometers of seismic data to train a large model, building a seismic interpretation model that boasts 1.5 billion parameters. The model significantly improves the accuracy of identifying major strike-slip faults and outperforms traditional methods in identifying weaker strike-slip faults with an efficiency increase of over 90%.
In the chemical industry, Huawei collaborates with top chemical companies to utilize AI in the real-time monitoring and analysis of sensor data. This approach increases fault prediction accuracy to over 95% and improves O&M efficiency by 20%.
2. Advancing subjects of labor to total factors of production that are represented by data highlights the importance of data as the foundation for intelligence. Information infrastructure can be built more efficiently when using “unified standards, architecture, and data specifications”.
Subjects of labor are fundamental to production, much like how land was crucial for the agricultural revolution and resources like coal, iron, and cotton were during the Industrial Revolution. Nowadays, data has become the fifth production factor and a crucial asset for businesses. As data is the foundation of intelligence, the key to developing intelligence lies in the ability to efficiently and rapidly collect, transmit, store, and maximize the value of data.
However, there are bottlenecks at every link, from data collection, transmission, storage, to application. With data as a new subject of labor, production tools focused on intelligent equipment and AI must be developed, and new information infrastructure that facilitates data collection, transmission, storage, and application must be established so as to build new productive forces in resource-based industries.
To address issues such as diverse device types, inconsistent standards, and challenges to interconnectivity, Huawei Mine Business Unit worked with CHN Energy to roll out the MineHarmony operating system. This system offers a common language for devices to communicate and collaborate seamlessly. At present, the State Key Laboratory of MineHarmony has certified 300+ types of devices.
To tackle the challenge of managing multiple networks, Huawei has developed an integrated bearer network solution known as "one network for all". This solution uses a single-slice network to support various types of services. It has been successfully tested for commercial use and implemented at over 400 coal mines, serving major customers including Shandong Energy Group, Jinneng Holding Group, Lu'an Chemical Group, and Shanxi Coking Coal Group.
To address issues such as siloed construction and low data quality, Huawei has built a cloud-based digital foundation that provides a secure, flexible, and efficient platform for data and capability sharing. This open, unified enterprise digital platform provides capabilities as services, with securely stored data that flows as needed.
To unlock the full value of data, enterprises can choose from different construction modes based on their business scale and digital capabilities during digital and intelligent transformation.
3. Advancing the labor force from technical workers to cross-disciplinary digital talent makes cross-industry understanding and integrated operations decisive forces.
We all know that having highly skilled workers is the most crucial factor in gaining the first-mover advantage and seizing strategic initiative. Talent can lead the world in technological advancement and create innovative production tools. They can truly comprehend industrial bottlenecks and pain points, and only they can develop problem-solving applications by combining their industry expertise with digitalization.
In terms of talent selection and development, our team has made some mistakes in the past. We aimed to cultivate the perfect "cross-disciplinary talent" who understands both AI and the industry, as well as equipment. However, perfection does not exist, and the most scientific approach is to abstract simplicity from complexity. Since the most stable geometric structure in the world is a triangle — stable, firm, and pressure-resistant — companies should create a similarly resilient structure in business. Resource-based enterprises, equipment providers, and service providers like Huawei, which provides information infrastructure and AI tools, should work closely together for joint innovation. By combining our strengths to form a steadfast triangle, we can achieve mutual development and create an intelligent industrial ecosystem.
With new fields emerging for innovation, we need strategic talent who can lead in technological advancements and produce innovative production tools, as well as application-oriented talent who can sort out and master new means of production. The aim of gaining cross-industry knowledge is to enhance our understanding and ability to develop effective strategies. We can establish platforms, teams, and mutually beneficial mechanisms to create value through integrated operations. This will help us grow together, achieve digital and intelligent transformation, and ultimately improve the total factor productivity.
In recent years, Huawei's industry-specific teams and R&D experts have immersed themselves in various scenarios within resource-based industries to understand their pain points. They have also collaborated closely with equipment vendors and design institutes, improving their professional skills and tools while integrating Huawei's digital, intelligent software and hardware into industry scenarios and equipment. Huawei has established close cooperation with leading enterprises like Shandong Energy, Shanxi Coke Coal, Huaneng Group, China Coal Energy, Shaanxi Coal and Chemical Industry Group, Shendong Coal Mine, Ningxia Coal Mine, China National Building Material Group, Conch Cement, CNPC, and Sinopec. Huawei's training programs for digital transformation have attracted over 15,000 from these leading enterprises, including their managers, business personnel, and technical personnel. These programs promote deep understanding and practical thinking through cross-disciplinary and cultural exchanges. As a result, digital, intelligent and low-carbon transformation has become a tool for achieving business strategies, improving efficiency and safety, reducing costs, and enhancing competitiveness.
Conclusion: Unleash new productive forces through innovation, cooperation, and development
The intelligent and low-carbon future is a shared future for all humanity. Countries and companies have the right and the need to participate in intelligent and low-carbon development. By jointly promoting the innovation and application of digital and intelligent technology, they can become the best version of themselves.
Huawei aims to create a digital-real ecosystem and a new information infrastructure centered on AI, supporting the Three Leaps in productivity. This can be achieved through continuous joint innovation with industry customers and partners. By utilizing the aforesaid Three Construction (advancement) methods, we can tailor AI to the specific needs of industries like mining, oil and gas, smelting, chemicals, and building materials, creating significant customer benefits. Although the potential for productivity improvement is inherently there, it can only be fully realized through innovation, cooperation, and development, which can then stimulate enterprise potential and unlock new productive forces.
As the saying goes, "A rising tide lifts all boats." We believe that by combining our wisdom and resources across industries, we can overcome the challenges of developing new productive forces, drive the economy towards high-quality, high-level development, and ultimately benefit mankind.
Contact us! transform@huawei.com
