C-Leaning up the mining industry

When I designed The Intelligent Miner’s 2020 editorial calendar, I deliberately put the topics of circularity and business strategy back-to-back.

To me, it seems obvious that we cannot achieve true circularity in mining and mineral supply chains unless we rethink current business models.

I wanted to provide a tangible example of how this could work and, during my research, fate led me to Laura Mottola. Mottola is the president and CEO of Flow Partners, a consultancy that specialises in advising organisations in business process improvement and Lean Mining.

She is a mining engineer by training and an expert in mining automation. While I was too late to interview her for the May autonomous mining feature, I was delighted to quiz her on all things Lean for this month.

What exactly is ‘Lean’?

As you will likely know, the concept of ‘Lean’ originated in manufacturing from the Toyota Production System.

“In the late 1980s, a study was conducted by MIT regarding the competitiveness of the global automotive industry,” Mottola explained. “A group of researchers led by Jim Womack went around the world and looked at all the major automotive companies. What they found is that one company was significantly different and ahead of the others in terms of their competitiveness and productivity, and that was Toyota.”

In 1990, there was a book published detailing this research called, “The Machine That Changed the World” and, in that, the authors coined the term ‘lean manufacturing’ for the first time.

“It was a way for the researcher to describe the Toyota Production System as one that is pared down to the essentials and is very efficient,” said Mottola. “That’s where the term came from, and it stuck. Lean manufacturing became a concept or, for many companies, a philosophy.

“Lean has been applied to many other industries over the decades. It’s had strong uptake, not only in consumer product-manufacturing industries, but in service industries, finance, healthcare, even hospitality and construction.

“I first learnt about Lean through manufacturing in the aerospace industry. I worked for a jet engine producer, and I was fascinated with the whole philosophy, the methodology, the practice and the tools… and I wanted to apply that in mining. That’s what I’ve been doing since 2006.”

Making value flow

As an editor, I’ve come across the application of Lean principles in many areas of mining, particularly in equipment production and maintenance practices, but I’m yet to see it applied to an entire mining operation or company.

Its flexibility suggests it would be possible though.

“I look at it as a way to see the flow of value,” Mottola said. “The first principle of Lean is to identify value from the customer perspective: what is the value that we’re creating? What is the purpose? What are we trying to produce that the customer is willing to pay for?

“Once you’ve identified that value, the second step is to make it visible, so you can see where value is created and where value is destroyed. There are different techniques for doing that. And the destruction of value can come in many different forms, waste being one of them.

“The third principle is to make value flow by removing any barriers. In a mine, if you look at value flow from the orebody to the product, we create many barriers through the build-up of inventories like stockpiles or process inventories.

“It’s basically an accumulation of material which is partly processed but not completely processed. You cannot derive value from it, because you haven’t completed the cycle and made it available for a customer to buy.

“Other barriers to flow can be found in the eight types of waste, such as process inefficiencies, unnecessary material and people movement.

“The fourth principle is pull from the customer; understanding what the customer wants, in what quantities, at what time, and what they are willing to pay for.

“Our industry, being largely commodity driven, is disconnected from that end customer. Hence, there is a push production mentality in effect, as opposed to pull production from the customer.

“We continue to produce materials and metals that are pushed into commodity markets, as opposed to being pulled by customer demand with specific requirements, and those requirements are changing.”

Opportunity to change & grow

Mottola gave a presentation at the AMIRA 24h Global Muster in May explaining how, in the battery raw material space, we have an opportunity to reconnect suppliers to end consumers through responsible and traceable mineral sourcing.

“The responsible sourcing of gold is a good example of pull from the customer,” she explained. “Likewise, consumers want to know that the battery in their iPhone doesn’t contain cobalt produced by child labour. There is a global trend and a sensitivity around the strategic and responsible sourcing of those materials.”

Historically, Lean principles come from the linear economy, but the circular economy aims to create feedback loops for products.

It is a cradle-to-cradle lifecycle concept that aims to avoid disposal after consumption, promoting potentially reusing, refurbishing, and recycling instead.

Now Lean is evolving to encompass circularity.

“Waste is no longer something you need to identify, remove and eliminate because it is designed out from the start,” Mottola told me. “If you cannot completely eliminate it, then you need to find ways to repurpose it.

“Keeping waste in its highest state of value means that waste from one process can become input for another.”

Many of the processes and business practices used in mining have remained fundamentally unchanged (although they have evolved technologically) for 100 years or more. It’s not that the industry hasn’t had opportunities to change during this time, it’s that the business imperative to do so has not been strong enough.

“The opportunity has always been there,” Mottola agreed. “All it takes is open mindedness. And today, with global sustainability trends, such as the UN Sustainable Development Goals, and social licence to operate, everything is moving much faster in that direction. There is pull from the market requiring and demanding that the connection be re-established.

“It’s those mining companies that take the opportunity to transform and become leaders as opposed to followers or laggards… Those are the companies that are going to capture new business opportunities and generate new business models, develop new products, new services, new ways to remain relevant and competitive.

“I do hope, as a professional in this industry, that there will be a real movement around that in the next five to ten years.”

It’s all in the mindset

In a sector where risk is seen as king by executives and investors – the decision makers – a change in the collective mindset is absolutely crucial in instigating transformation.

“Mindset is everything. It is our barrier to change. Our opportunity to innovate… It really depends upon people’s ability to see beyond what we’ve been doing for a hundred years; making money out of one model. We can shift to other models,” said Mottola.

This is where leadership becomes very important.

And, with an influx of younger generations and professionals from other industries, comes new ideas and ways of working. Greater diversity and inclusion will also generate more open mindedness and will contribute to innovation.

“We need all of those things to really become relevant and attractive in the progress of society in the long term,” said Mottola. “There’s still a lot of damage to the reputation of this industry to be repaired. At the moment, we’re not an attractive industry for investment. We’re not an attractive industry for talent, for diverse workforces, for young people.

“For me, there are two fundamental schools of thought that are coming together: Lean Thinking and Systems Thinking.

“Systems thinking is required to make large scale, complex change. It involves the ability to think in terms of systems of systems, to see everything as interconnected with feedback loops, the butterfly effect… all of those things.

“We need to move from an engineering mindset, which is based around analysis – breaking down a problem into many different parts in order to solve it – to a systems mindset; making sense of complexity through synthesis, focusing on connections and the interrelatedness of everything. That’s a paradigm shift for our industry.”

This is a sentiment that I hear from experts in almost every area of mining right now: no one wants to focus on processes and system integration because it’s not exciting or ‘sexy’ but, nevertheless, it is the next vital step in optimising our equipment, our operations, our businesses.

Without it, we will never break away from siloed thinking and methods of operating.

Disruption from the inside out

I asked Mottola if we’re likely to see smaller companies – those with less operational complexity – embrace concepts like Lean and System Thinking and redesign mining from the inside out.

Could disruption come from within the industry as well as outside of it?

“I think so,” she said. “The mid-tier market is more willing to do things differently because they have a business imperative. They can’t compete with the larger companies, and they also are constrained in terms of capital.

“However, it does require very strong visionary leadership. And to be honest, there isn’t an abundance of that going around in our industry. There’s lots to be done in terms of making that more widespread.

“But I feel that we’re on an acceleration curve, and COVID in itself is a catalyst for the need to go back to the drawing board and rethink operations.

“We’ve had the technologies and capabilities that we need for change for a long time. But people haven’t, or the industry at large, hasn’t embraced that, either because the investment required was too high or the motivation to change simply was not there.

“Sometimes a crisis is an opportunity, and I think there are a number of things that are happening in the world today which are driving that systemic change, but we need more visionary leadership in positions of influence.

“Not only within mining companies, but in the ecosystem to pull this together.”

From Lean to C-Lean

Mottola has married the concepts of Lean and circularity to create an approach she calls Circular Lean Mining, or C-Lean Mining (great acronym, right?)

“Circular Lean is something I came across through my affiliation with the Lean Enterprise Institute,” she said. “There was a solar company which made a presentation at the Lean Summit four or five years ago. I’ve been exploring, with their former COO and the Lean Enterprise Institute, the development of Circular Lean as a formal methodology. It’s a way of looking at circularity using the Lean philosophy.”

Mining is just the start of the metal supply chain, but the concept of Circular Lean can impact and create benefits for stakeholders all the way down the value chain.

“One of the things that would be very cool would be to work with an automotive manufacturer to map the entire value chain, going from a lithium producer, for example, to the battery, to the vehicle, and all the different transformation steps and companies that are involved in that fabrication process,” said Mottola excitedly.

“And then plan out and make visible the opportunities for circular economy in the entire value stream. In doing that we could also find different points in that value chain where we can generate connections and develop new business models that would repurpose waste streams.

“And that battery, once the vehicle is expended, could be refurbished, repurposed or recycled. And the raw material supplier could, in principle, benefit from the recycling of that material, as opposed to producing new, fresh material.

“That’s what Umicore is doing, and that’s what Boliden is doing too.

“In the case of Boliden, they are progressively increasing the percentage of recycled metal into their smelters and reducing the amount of fresh material. So over time, you can see Boliden is shifting that material balance. It still is very heavily tilted towards the fresh raw material side, but eventually it’s going to tilt.

“In the case of Umicore, they have completely shifted from being a mining company to becoming a recycler of multiple metals.

“That’s their long-term strategy. It requires vision and consistency of that purpose to drive progressively toward the goal.”

Disruption from the outside

Of course, disruption could also come from outside of the mining industry.

We are not the only ones who feel the pull from end-users.

For example, Tesla owner, Elon Musk, is looking at investing in lithium; a move that would secure a source of metal for Tesla car batteries and also guarantee traceability and efficiency in the company’s supply chain.

Consumer product-driven manufacturing has to respond to a market that is demanding a different type of product, and if we can’t give it to them… Well then, these companies could look to extract materials for themselves.

It could be Tesla, Apple… Amazon, anyone really.

Creating conversation

In a bid to elevate the discussion and generate meaningful change, Mottola is looking to facilitate the creation of an industry-led consortium. The aim is to bring together parties from across the metal supply chain to talk about change and what that might realistically look like.

“We need to create a community to help drive change and bring this to fruition, but I think what’s required is a partner that has the weight to pull that together,” she said. “A heavyweight, like the International Council for Mining & Metals or the World Economic Forum.

“We need to co-create new business models that benefit everyone.”

“That’s my vision. I want to be part of transforming and moving this industry to the next level.”

Interested parties can contact Laura at: laura.mottola@flowpartners.com