As the foundation for developing industry knowledge and solutions, R&D is a critical area for investment.“If you're not investing in the R&D, actively shaping the direction of it through various partnerships or contributing to commercialisation of it, then you are likely to be left behind” says Nona Sichinava, a Partner for Gerard Daniels.
While most mining companies have walked away from in-house R&D since the mid-90s, some have shifted to a partnership approach in the form of accelerators or collaboration with service providers or sharing data and expenses with other mining companies. “This can be seen in Rio Tinto committing funds to create a Centre for Future Materials led by Imperial College London,” says Nona. “BHP Ventures is another example, where BHP has invested in over 20 emerging companies, defining its aim as accelerating ‘the development of technology to benefit not just our business and value chain, but that of our broader industry’’1.
When directing resources towards R&D and commercialisation, partners must have clear objectives and focus on technologies with the greatest potential impact, balancing return on investment with societal expectations to mine and process materials in responsible and sustainable ways. Here we examine current areas of focus across the mining value chain and consider where innovation is needed most.
Exploration
Meeting the demand for critical minerals is increasingly difficult as resources become tougher to extract; ore grades decline; labour costs continue to rise; and fewer major discoveries are being made, taking significantly longer to build the pipeline of projects that would at least partially satisfy the critical minerals needs. “To quantify this issue, 30 to 40% of the copper supply that the world will need by 2050 doesn’t yet exist, as we’re just not finding these deposits,” says Nona.
Investing in and advancing technologies that dramatically improve the discovery probability of mineral deposits is critical.
“Current exploration timelines are no longer fit for purpose. Technologies like AI and machine learning hold the key to addressing this issue,” Nona continues. “Globally, out of 1000 exploration projects only one becomes a mine and this ratio jumps to 1 to 5000 if exploration is done from scratch. Predictive analytics, automation of data collection and analysis, and 3D visualisation hold the potential to enhance exploration accuracy and quicken conversion of targets into discoveries and resources modelling.”
Operation
Mine operators continually look for ways to extract more efficiently from existing assets. This is particularly relevant in the context of many large open pit mines being depleted and moving into underground operations. “The deeper you dig, the more challenging and costly it becomes from the perspective of employee safety, logistics and energy consumption,” says Nona.
For the greatest impact on production, R&D and innovation should focus on:
- Developing safe and cost-effective power solutions: Replacing diesel fleets with battery-electric (electrification) to reduce ventilation cost as well as harmful health impact of diesel fumes.
- Connectivity: Improvement inreal-time data tracking and automation which would also lead tofaster emergency response rates.
- Maintenance: Predictive maintenance is key to achieving efficiency in any production environment.
- Environmental performance: Globally, most mining jurisdictions and communities not only hold significantly higher ESG standards and expectations than in the recent past but justifiably push for higher standards. To achieve these, innovative models of engagement with communities need to be developed and implemented in addition to technological innovation. Water management is an example area of ESG that will require a shift in thinking, especially for asset development in Chile, Argentina, parts of Africa and Saudi Arabia.
Processing
The Western mining community is finally starting to acknowledge that processing capabilities, and not just mining assets, are a point of vulnerability for the manufacturing sector.For example, the processing of rare earths was offshored to China due to its very high energy cost, complexity and significant environmental footprint as it generates toxic waste, and in some cases, radioactive byproducts. This seemed like a good approach until REEs became critical for technological competitiveness on a global scale.
“Growing supply chain risk has triggered renewed interest in reshoring domestic processing in countries like Australia, the UK, the USA, European Union and Canada. Given these challenges, mining companies must consider how new technology can help to process many critical minerals safely, efficiently, cost effectively and in line with the Western ESG expectations,” says Nona. “Innovation in both the exploration / discovery and processing stages require the most attention, but the latter is critical for the economic survival of many industries in the Western world. Smart Investment and collaboration are needed if we are serious about gaining control over the mining value chain.”
Human resources
While a shrinking engineering skills pipeline is not news, significant retirement rates in the next five years will starve many heavy industrials sectors, including mining, of entry level as well as experienced human capital. In the US alone, more than half of the mining workforce is predicted to retire by 20292.
For many workers, AI is seen as a threatening competitor but if developed and implemented thoughtfully, it can actually fill in the skills gap in the mining sector rather than replacing humans. “No government initiative or level of funding can produce the tens of thousands of miners needed to replace the natural attrition rates,” says Nona. “Automation and AI can be key to sustaining an industry that is at risk of being eliminated or becoming too expensive to operate, due to the lack experienced technical, operational and management professionals.”
While we anticipate AI to play a significant role in this and many mining companies claim to invest heavily in this technology, we are yet to see the ROI and productivity gains reflected in corporate reports. “Harnessing the benefits of AI will require the existing workforce to be far more strategically upskilled – a piece that is missing in many companies,” says Nona.
The mining industry will always need experienced professionals who can deal with challenging geopolitical situations, strategy development and implementation, and calculated risk taking. It is equally important that more mining professionals become open minded when it comes to the adoption of technological innovation, because as a sector there is still a resistance to change.
Is your leadership team equipped to drive innovation and navigate these and other mining industry challenges?What are the priority technology areas for your business? To share your thoughts or discuss your future leadership needs, connect with Nona or reach out to your
local Gerard Daniels team.
SOURCES
