Written by Aarti Soerensen and Carly Leonida
To realise the low-carbon, zero waste mining operations of the future, requires significant and sustained innovation. Although this is widely acknowledged, many companies in the mining space are still grappling with how best to bring forward new technologies and business models while keeping pace with fast moving expectations from clients, stakeholders and governments.
Added to this, many of the challenges that the mining industry, indeed society, faces going forward are simply too large and too urgent to be solved by the efforts of individual companies. Issues such as climate change mitigation, adaptation, and waste valorisation are systemic and require a coordinated response from supply and value chains as well as a range of solutions to fit mining’s relatively wide range of operations.
Today, mining companies both large and small are looking outward to supplement their internal innovation efforts and drive the industry faster towards a more sustainable future.
What makes an innovation ecosystem?
James F. Moore pioneered the business ecosystem concept with his 1996 book “The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems”, with added context provided in his 2013 book “Shared Purpose”.
In its 2016 Business Ecosystems in Exploration report, Deloitte defines innovation ecosystems as “dynamic and co-evolving communities of diverse actors who create and capture new value through increasingly productive and sophisticated models of both collaboration and competition. A distinctive characteristic of many ecosystems is that they form to achieve something together that lies beyond the effective scope and capabilities of any individual actor—or even any group of broadly similar actors. At their core, ecosystems are a powerful way of looking at collaboration through which companies can realise increased opportunities for innovation”.
In their 2017 paper ‘Innovation Ecosystems vs. Innovation Systems in Terms of Collaboration and Co-creation of Value’, Smorodinskaya et al., describe innovation ecosystems as “dynamic collaborative networks of people and organisations formed around projects with an innovation objective”.
These authors explain that, in the age of non-linear innovation and digital technologies, innovation can be better nurtured within a special, innovation-conducive environment.
In mining, innovation ecosystems vary widely in size and structure and typically feature diverse players including miners, mining equipment technology and service (METS) providers, start-ups, academia and research institutes. Some are focused on local mining districts, others on national or regional markets, while some even span multiple industries.
A key feature of innovation ecosystems is the co-creation of value. Everyone puts ‘skin in the game’ and provides value to the ecosystem as well as contributing to building the platform(s). This includes money, resources, technology etc. and
allows for a small host organisation with little overhead
The symbiotic nature of ecosystems mean that participants reach their shared goals faster, with each player realising the maximum value relative to their input. This value can be both tangible i.e., in the form of economic returns gained through commercialised innovations and products, or intangible i.e., accelerated access to diverse expertise from inside and outside the industry, increased visibility in the market or exposure to potential new partners and clients.
Ecosystems not only address the proverbial ‘need for speed’ in mining innovation, allowing players to draw upon solutions and standards developed by others to leapfrog their own companies and operations forward, they also deliver collective value by promoting a culture that is overall more conducive to (collaborative) innovation.
The effect is cyclical: an environment that supports the growth of start-ups and small-medium enterprises (SMEs), which are often the source of radically different ideas and solutions, improves the industry’s performance financially and environmentally. This, in turn, draws capital which boosts its attractiveness to companies and innovators from outside the sector furthering the pace of innovation. Everyone benefits.
The evolution of mining innovation
One could argue that, given their flexible nature, the focus on co-creation of value and the enablement of innovation through digital and physical (hard) technologies, ecosystems are a natural evolution from the transactional-type supplier networks and/or collaborative research organisations that were the main source of innovation in mining 10-20 years ago.
The supplier networks tended to be focused on the needs of individual miners and their operations and were very much driven by ‘push’ i.e., METS companies developing and commercialising solutions to miner’s perceived problems, rather than ‘pull’ i.e., mining companies asking for solutions to issues and taking an active role in developing or co-developing solutions.
The collaborative research organisations relied on the mining companies having their own internal research and technology divisions to advance the technology and sponsor adoption by individual operations. In almost all mining companies, these internal research and technology divisions have now been disbanded.
In their 2020 paper ‘Innovation in the Mining Industry: Technological Trends and a Case Study of the Challenges of Disruptive Innovation’ Sánchez and Hartlieb describe this setup well:
“Despite its relevance, mining companies usually show low levels of R&D intensity, similar to mature industries and far from high-tech sectors. The tendency to vertical disintegration has led firms to focus on their core business, relying mainly on equipment manufacturers and suppliers for the development of innovative solutions. Also, collaborative alliances between mining companies, suppliers, and research centres share a significant participation in the development of new technologies.”
As indicated in the final sentence, today there is an understanding that a more holistic approach is required to speed companies towards their collective goals. Bringing forward step-change mining processes and technologies is both costly and time-intensive and, over time, the need for acceleration and risk sharing has seen many mining companies, particularly tier-one organisations, establish more collaborative relationships, sometimes through formal innovation programmes, with METS companies and academia.
Putting mining companies in the driving seat has proven a powerful driver for innovation and, when done right, these types of programmes can be hugely successful for the businesses involved – see Anglo Gold Ashanti’s work in open innovation.
More recently, however, we have seen a tendency towards the formation of symbiotic, independently led, innovation-based organisations – true ecosystems – like Expande and the Canada Mining Innovation Council (CMIC) which we will examine further later. These are designed to promote and address challenges shared by multiple mining companies, with the goal of identifying and advancing a range of potential solutions in a rapid and cost-effective manner.
Although the mining companies involved play an active role in choreographing these efforts, taking the programme focus outside the boundaries of a single mining company has proven game changing. By removing some of the barriers around competition and IP and applying advanced digital tools as well as strategies from more innovation-friendly industries, ecosystems breed parity and trust amongst their members.
Although this type of innovation ecosystem is mainly aimed at large, industrial companies and it’s likely that we’ll see further intensification of innovation around them given the scale and complexity of challenges such as decarbonisation and responsible mineral sourcing, there can be limited access for other important companies, including SMEs and small-scale miners. Going forward, greater consideration could therefore be focused on accessibility for these diverse players to help broaden the funnel for ideas.
The need for speed
While many innovation ecosystems incorporate elements to accelerate start-up scaling and product commercialisation, a more recent development is the rise of standalone innovation accelerators – specialist organisations or companies designed to foster and even create small companies with innovative ideas.
The SBA Office for Advocacy explains that: “Accelerators select and invite a small group of entrepreneurs to start-up boot camps, providing mentoring, resources, and, most important, industry connections during these programs. Successful graduates leave with the next stage of funding or revenue in hand, and all graduates leave with a small percentage of their company’s equity ceded to the accelerator.”
The authors explain that accelerators address the funding gap for start-ups and the information gap for would-be investors by acting as brokers. They explain: “[Accelerators] reduce search costs for angel funders and venture capitalists while creating a pipeline of vetted technologies for the market. By concentrating resources through seed funding, access to investment networks, and intensive mentoring, accelerators are able to identify ‘winning’ ideas more quickly and help those start-ups grow.”
In mining, this ‘parental’ role is particularly important, not only due to the significant lack of funding for start-ups, but also because of the risk that implementing newer technologies can carry for both mines and vendors alike.
There are special challenges in mining that make it attractive to start-ups from a market point of view, but also make success technically or financially difficult. Helping these firms to get to grips with these nuances and finding financing to support their growth is an important niche and, in doing so, accelerators also create their own ecosystems of sorts.
To fully understand the power of different innovation vehicles, let’s look at some examples from the archetypical mining innovation ecosystem through to an innovation accelerator and even a company creator.
Canada Mining Innovation Council: connecting & coordinating innovation
The Canada Mining Innovation Council (CMIC), based in Ottawa, Ontario but operating nationally, was founded in 2009 as a non-for-profit and was originally intended to be the national umbrella organisation for pan-Canadian research and development in the mining sector. CMIC is now 100% private sector funded and led by more than 30 mining companies around the world with a focus on the co-development and co-deployment of technologies.
CMIC has the objective to fundamentally transform mining “by coordinating and focusing efforts to address pre-competitive challenges of the industry across Canada” using an open innovation approach, which means it is, among other features, using an open and shared IP framework.
CMIC’s three core activities are to: connect the ecosystem, define the industry needs, and deliver technology development projects to the point that for-profit entities can deliver the innovations that the mining industry needs.
The open innovation business ecosystem, which was “based on the building blocks of successful innovation models in other companies and industries, including software engineering, microelectronics, defence, and pharmaceuticals” holds several benefits for participating members because it is able to “provide technology test beds, and reduce barriers to the adoption of technology”, thus accelerating technology development, deployment and adoption “while significantly reducing financial risk for all collaborators”.
The coordination of R&D efforts through CMIC are grounded in its Towards Zero Waste Mining innovation strategy, which targets reductions in energy and environmental waste as well as greenhouse gas emissions. This strategy serves as a starting point for the creation of technology roadmaps (connect and define) in areas such as exploration, mining, and processing, defining technology requirements for the next two decades.
Based on these roadmaps, projects are collaboratively designed and executed (deliver) using a structured process facilitated by CMIC staff and funded by its industry partners. Projects follow a general structure which includes executive sponsors, senior responsible authorities, a project manager from CMIC and a delivery team, and a steering committee comprised of several project participants.
However, access to capital funding remains a challenge for CMIC. Each project needs to fundraise, potentially resulting in launch delays. CMIC has taken steps to address this by establishing a project business planning cycle that members follow to budget annual spending.
CMIC’s operational costs are funded through membership fees and the organisation relies heavily on volunteer engagement, implying that executive oversight, thought leadership, and programme management need to be spread across multiple organisations.
One CMIC project launched in 2016 and now at an advanced stage is the development of new comminution technology to reduce energy consumption by more than 50% compared to currently-available technologies. Through CMIC, a consortium of 31 individuals from eight companies from around the world have set the ambitious goal to produce a game changing comminution technology.
The Conjugate Anvil Hammer Mill (CAHM) technology platform has two variants – ‘ported’ and ‘MonoRoll’. Both variants are designed to break particles in a highly efficient thin particle bed. The ported variant is intended to replace semi-autogenous grinding (SAG) mills and high-pressure grinding rolls (HPGRs) while the MonoRoll is intended to replace rod and ball mills.
The ported variant prototype is currently being assembled and should be ready for testing in Q2 of this year. Extensive discrete element method (DEM) numerical modelling has been used to design the ported variant as well as a digital twin, making it the first comminution machine that has been ‘designed’ virtually. DEM predictions show that the ported variant should be more than 50% more energy efficient than a comparable HPGR.
In 2020 and into 2021, a MonoRoll prototype was designed and tested in a retrofitted 2 tonne-per-hour pilot ball mill. The demonstration showed a 42% reduction in energy consumption compared to the pilot ball mill operation. Design changes and modelling results indicated that a 70% reduction in energy may be possible with the second prototype which is currently under development.
CMIC believes that by co-developing and co-deploying technology, the consortium took a process that could have taken 20 years and reduced it to five. The ported variant has received significant funding from the Canadian Federal Government Natural Resources Canada’s (NRCan’s) Clean Growth Program, while the MonoRoll received funding from NRCan’s Crush It Challenge in addition to funding from the partner companies in the form of both financial and in-kind contributions.
Another CMIC consortium is tackling sensor-based ore sorting technology. This has the potential to reduce energy consumption and water use while increasing metal recovery and lowering mine tailings and waste rock footprints. The first phase of the project focused on sharing experiences and identifying gaps as well as discussions with vendors. The next phase is targeted at providing a “methodology of where and how sensor-based ore sorting technologies can be effectively deployed” as well as quantitative examples of value generated and best practice examples.
Other projects include a consortium deploying mechanical cutting technologies, with a demonstration project at Vale currently in development, a project on alternative haulage options for surface mines, and a consortium of eight mining companies, named BluVein, working “to adapt technology developed for electrified public highways in Sweden for use in the heaviest diesel-powered machinery operating in the mining sector”.
The key to the success of these projects, according to CMIC Director and CEO Carl Weatherell, is co-development.
“When we employ a zero-waste aspirational perspective, we force organisations and people to rethink existing approaches to their business, tackle existing business paradigms, work together differently and with people and organisations we usually would not usually consider as partners,” he said.
“This creates the framework for collaboration, co-development, and technology co-deployment in multiple consortia of collaborators who have never worked together. The net result is rapidly achieving much greater impacts than could be realised by any individual organisation.”
In December 2021, CMIC also created RethinkMining Ventures, a for-profit subsidiary which aims to commercialise technology in which CMIC, and hence its members, have a vested interest.
Expande: challenging the industry to innovate
Expande is an open innovation program that promotes the development of ecosystems around challenges pertaining to the natural resources industry and the innovative solutions generated by local and international companies in Chile.
Expande was initially set up by the Chilean economic development agency, CORFO, in 2016 as part of the National Mining Program Alta Ley. Its first milestone was the elaboration of a technology roadmap for the mining sector with targets until 2035, which was prepared by Fundación Chile.
The roadmap identified several initiatives, including the implementation of an open innovation in mining programme, which was implemented through Expande and aims to build technological capacity in Chile based on mining challenges, as well as identifying technological solutions with a high potential for scaling.
Since 2017, Fundación Chile has received private funding from the mining companies participating in Expande, including Antofagasta Minerals, BHP, Codelco, Teck, Collahuasi, and recently Sierra Gorda SCM (collectively, these represent 80% of Chilean copper production).
It has also received public funding from CORFO which works to improve the competitiveness and productive diversification of the country by encouraging investment, innovation and entrepreneurship. While the public funding period finished after five years, starting from 2022 the initiative will be funded by private contributions from the mining companies participating in the program.
From 2017-2020, Expande prospected around 1,600 suppliers, and more than 2,300 solutions in different technology readiness levels, facilitating US$48 million in contracts and raising capital. Furthermore, it has created an extensive network with local and international partners from different mining and technological countries.
Expande’s innovation process is facilitated using different tools or formats, including industry challenges, hackathons, and technology transfer, as well as technology scouting and, most recently, an online matching platform called Open Space (more on this later).
Since its inception, Expande has launched over 200 industry challenges to its ecosystem. These are publicly listed on the Expande website, stating problems by mining companies and inviting solution providers to hand in their ideas by the respective due date.
Matching ideas with speed
Hackathons and especially challenges have proven effective tools for scouting and getting access to new technologies, fresh ideas and identifying solutions that are ready to be implemented. Expande also supports and advises companies in scaling up their businesses, as well as enabling knowledge transfer into the ecosystem.
The Expande ecosystem is focused mainly on mining companies and suppliers, but does include start-ups, universities, and capital funding, such as venture capital firms and government funding too.
The Open Space platform, which was launched at the end of 2020, provides a meeting point for innovative companies that are seeking partners to develop their technological solutions and scale their businesses in the mining industry, locally and globally, in a collaborative manner.
The platform allows Expande to track matches and help further business associations, as well as help companies to export their solutions. Companies can participate in technological scouting processes, as well as venture capital and technological transfer activities.
While the facilitation of collaboration is an essential element in Expande’s innovation ecosystem – the Open Space platform allows alliances between large and small suppliers as well as start-ups and established companies to be forged – there are differences in its methods and tools compared to CMIC.
Expande does not coordinate innovation and technology projects but fulfils the role of an open innovation accelerator, providing various platforms for exchange and supporting the matching of different sets of partners.
Ricardo Morgado, Director of Strategy and Development at Expande, explained: “The playing field of open innovation is wide and populated, but the option of playing collaboratively is something that we have internalised since the beginning, promoting practices and methodologies with our corporate clients, technology-based companies, as well as our strategic partners at a local and international level.
“Today, the mining industry has seen the value of integrating methodologies and open innovation processes to address its challenges while working closely with the ecosystem; something that we want to replicate in other natural resources industries.”
Kite Company Creator: custom-building innovative companies
Kite Company Creator was co-founded in April 2021 by Richard MacKellar, Parmjot Gill, and Rob Stephens as a start-up working to prove a new model for bringing innovations to the resources sectors. It is the only company foundry in the mining space and focuses on the intersection of digital transformation and the resource industries with the goal of building an inclusive global community.
The concept was conceived in 2015 by MacKellar. Having spent a decade as a venture capitalist, he observed that many start-ups looking for funding had solutions that looking for problems to solve rather than vice versa.
In Stephens’ role leading a technology and innovation organisation for a large mining company, he repeatedly observed the development of technologies that combined IP from multiple sources, but no company to turn them into a product that would be supported and continually developed. Together with Gill, they developed the concept of a company foundry which has now grown into a fully-fledged end-to-end company builder.
Kite works with industry partners to identify their most pressing problems. If the opportunity is big enough, Kite then sources technologies and other IP from across the globe from academia, industry and market/technical experts that are combined to create a product. It builds, from scratch, a company to commercialise that product and the team taps into its network of experienced individuals to handpick CEO and CTO company leads.
Projects graduate from Kite and become a company once they have achieved a committed customer, a minimum viable product (MVP) or path towards it, a team consisting of a business lead and technical lead, and a clear path to financing.
Unlike other accelerators or incubators that tend to push technology, Kite’s foundry model starts with market pull in solving industry-identified problems.
Stephens explained: “Many accelerators/incubators are not-for-profit and take limited or no equity in the companies formed. We proudly are for profit; by founding companies, we start with 100% ownership in them.”
The Kite model also seeks to overcome other risk areas for new start-ups. Market entry is facilitated by working with the industry partners through the creation of the company, such that they want to be the first to purchase and implement the solutions.
“Kite avoids the issue of myopically looking at only whatever technology the local university or inventor comes to an incubator or accelerator with by globally sourcing solutions,” said Stephens.
“By hand-picking the teams, Kite reduce the risks associated with having the wrong people in key roles and provides a home for those individuals as they look for their next positions. And Kite provides the pre-seed capital to quickly get the companies up and running with the right strategies to grow and attract additional investment.”
Kite is fund-backed and raises capital from strategic partners, angel investors, and non-dilutive funding. Strategic partners include mining, minerals, and metal processing companies as well as METS companies. In contrast to venture capital companies, the team only invests in companies that Kite creates, rather than deploying capital into companies that already exist.
“We are building world-class companies from a systematic foundry model based on problem-driven innovation,” Stephens added. “All with faster innovation cycles and lower risk. This presents a scalable model with significant upside potential.”
Currently, Kite has three projects in the proto-company stage. The first is called Rail-Trace; many railroads employ outdated processes to monitor the location and health of railcars, with no real-time updates for powerless railcars. The Rail-Trace solution proposes a cost-effective way to transmit railcar health and a GPS signal, with cutting-edge data analytics that optimise route and maintenance scheduling, minimise costs and alert customers in real-time when key metrics are triggered.
The second project focuses on aluminium smelting and addresses the lack of real-time continuous data from within aluminium smelting pots other than voltage. The team intends to create low-cost sensors that obtain real-time data to better understand and control aluminium smelting pot operation.
Third is Ore+Body Knowledge. Globally, the mining industry is encountering more challenging orebodies, whether they are lower-grade, deeper, heterogeneous, texturally complex, or contain deleterious elements. Silos, lack of data early enough in the orebody lifecycle to make allow scenario evaluation, and lack of platforms to capture data along the entire orebody lifecycle still limit the understanding of alternative scenarios that could improve project value and minimise liabilities.
The team believes that current best practices won’t suffice for creating viable operations in these situations. The solution is to obtain comprehensive data early enough using new sensor technologies and improved data capture and manipulation platforms to modify decision-making. Together these create a measurable change in the performance and risk profile of the project throughout its’ value chain.
These ecosystems, foundries, incubators and accelerators are just a few examples from those scattered across the globe, many of which are connected formerly or informally by the individuals who participate in and run them. There are, however, a few key lessons that we can draw from this selection.
First, the mining industry requires a wide range of networks and ecosystems to help address current and future challenges.
The unique nature and mechanisms of each ecosystem are important because it means there are solutions to help grow and scale different start-ups with different technologies for different challenges. No two mines or orebodies are the same and there will be no single solution or ecosystem in creating a low-carbon, low-waste future.
This variety also provides opportunities to attract a range of investors and clients and, if a suitable company does not exist, there are means to create them from scratch.
Success in these efforts may open the doors to collaboration with innovative companies from outside of the mining sector too.
Second, there are several qualities required for success, including visionary industry leadership throughout the connect, define, and deliver phases, adequate people resources, mutual trust and shared values.
Given the people resource constraints within the companies in innovation ecosystems, there is a need for global consolidation to connect and define activities in particular so that they are not repeated too frequently. There is also a need for mining companies to have sufficient numbers of experienced people to facilitate the adoption of new technologies and products into their companies, especially as mining companies go through mergers and consolidations.
As Weatherell says frequently, “innovation happens at the speed of trust”. Without this common ground it is difficult to share data and learnings openly and advance projects within the necessary timeframes.
Adequate funding, either from private or public sources, is also key. While government funding is not a prerequisite for success, it does instil confidence and investment in the long-term viability of the mining industry, and government funded innovation projects can actually act as seeds for innovation ecosystems.
To drive innovation even faster requires a greater commitment across the industry both financially and culturally. While some mining companies have allocated a significant portion of capital towards innovation efforts (both internal and external) and change management to support them, for others greater priority could be given.
In the 2015 paper, ‘The Case for Innovation in the Mining Industry‘, business strategist, Peter Bryant, suggests that “mining companies should contemplate increasing their R&D investments to 1-2% of revenues from the current anaemic 0.25-0.6%. It would also be very beneficial for such investment by key suppliers in joint projects to increase spending from the current 1% to 3-4%.
“These levels of investment are consistent with approaches in the oil and gas industry. Also by taking the consortia approach of open collaboration, we can see shared investment, shared risk and shared upside”.
Additionally, and perhaps as a further challenge to the industry, it would be useful to have a digital platform or tool that allows companies to find and assess the value proposition of different ecosystems. Participation in these initiatives requires a significant amount of time, effort and money. It’s important that companies can assess which ecosystems and projects offer the best returns relative to their goals so that they can make informed investment decisions.
About the authors: Aarti Soerensen is Scientific Research Assistant at the Institute for Advanced Mining Technologies (AMT) at RWTH Aachen University. Carly Leonida is owner and editor of The Intelligent Miner.