the mining industry’s superhighway for new ideas – The Intelligent Miner

SPONSORED BY UNEARTHED In preparation for this interview, I read…


SPONSORED BY UNEARTHED

In preparation for this interview, I read up on innovation models used in other industries. 

US-based pharmaceuticals company, Eli Lilly, has been pioneering an open approach to innovation for years. Alan D. Palkowitz, its VP of Discovery Chemistry Research and Technologies, describes the company’s Open Innovation Drug Discovery platform as “consisting of multiple superhighways all pointed towards the final destination of discovering novel medicines”.

What a great analogy, I thought. There’s been a lot of talk recently about innovation in mining and the use of collaborative or open programs to speed the discovery and adoption of new ideas. But there’s been little discussion about what open innovation requires to be successful, and how the industry can move past the hype to achieve that ‘superhighway’ effect that Palkowitz describes so well. 

Mining innovation specialist, Unearthed, is celebrating its 10th anniversary this year and, to mark the occasion, director Zane Prickett joined me for a debate along with Chris McFarlane, Innovation Manager at global mining company, South32. The firms have partnered on several projects and were happy to share their learnings.

Why does innovation need to be ‘open’?

McFarlane set the scene for our discussion. “We’re seeing a convergence of factors, issues and opportunities that are pushing and pulling the mining industry to innovate in a way that lends itself well to collaboration,” he explained. 

“Miners benefit from structural barriers that have so far provided protection from the disruption and displacement seen in other industries – principally, the ownership and control of existing mineral resources. This, coupled with a prevailing risk mitigation mindset, has meant that the historical need and desire to innovate has not been as great as in other industries.”

It’s true that necessity is the mother of invention, and today, a growing number of external influences, like climate risk, rising environmental and social governance (ESG) expectations and aging assets – challenges that require solutions which are non-core to existing mining practices – are pushing operators to think outside of the box.

“Solutions to these challenges often lie outside the current experience and capability of miners,” said McFarlane, “And, because many of these challenges are common across industry participants, taking a more open approach to innovation starts to look very attractive.”

Prickett agreed: “Open innovation, as a strategy, complements other types of innovation it doesn’t replace them. The mining industry has a good track record of working deeply with vendors and research institutes to bring new solutions to market. Adding open innovation to that capability will help to fill the gaps.” 

In the past, innovation was all about how to do mining better, to make it safer and more profitable. Now, it’s about how to be better when it comes to energy efficiency, environmental footprint, value to the community and so forth. 

Prickett added that the world is also more global than it’s ever been. Today, we’re just a click of a button away from information and conversations with anyone around the globe, and that enables this type of activity to happen. 

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For open innovation to be successful, there needs to be two-way sharing of information. Multiple parties may also need to come together to solve a particular problem. Image: Unearthed

“We couldn’t have done open innovation as successfully or easily 15 or 20 years ago,” Prickett said. “There were cases, but not at scale. The drive for battery minerals and more responsible production of raw materials have also made mining, as a process and an industry, more tangible to external talent. 

“We can now reach out to innovators in other industries and they’re aware of the role that mining plays in global supply chains and are excited to help solve these problems,” he said. “The pace of technological advancement is also unprecedented and there’s a greater range of funding available for innovation in mining. Why wouldn’t companies want to leverage these opportunities?”

A problem shared, is a problem halved

Of course, open innovation only works if companies are willing to be public about the challenges they face and to share data. Without that information, external parties will find it difficult to understand the challenges faced and bring forward suitable ideas. 

“That means sharing things that may not traditionally be in the public domain,” said McFarlane. “The willingness for miners to publicly share their problems, and the information and data surrounding them, may require a shift in internal mindsets.”

It also requires an evolution in the relationships between mining companies and suppliers. Historically, these relationships have been more transactional in nature. But, for open innovation to work, there needs to be two-way sharing of information. Multiple parties may also need to come together to solve a particular problem and agree, commercially, how that works.

“There are considerations for intellectual property (IP) as well,” said McFarlane. “Mining companies need to be comfortable knowing they can access, but not control, the IP developed as part of these collaborative domains.”

“The IP point is an interesting one,” said Prickett. “Ten years ago, most mining companies were fixed on owning all the IP they helped develop. While there are still some domains where that mentality applies, there’s generally a much smarter approach now which is to support others to grow and nurture IP so that miners can solve their problems at speed. That makes businesses more efficient, saves them money, and increases time available to focus on core activities on site.”

“It sounds like it’s important, at the outset of these relationships, for companies to be really clear on their objectives, goals and boundaries,” I said.

“If companies are super aligned about their advantages, objectives, what matters to them and how they’ll handle IP, then everything else will fall into place,” said Prickett. 

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Tailings was a key focus area for South32 and Unearthed’s open innovation efforts. The tailings storage facility at the Hermosa project is shown here. Image: South32

Supporting an open approach

We had touched upon the conditions and mindsets required for open innovation strategies to bear fruit but, for these efforts to be successful and sustainable requires more. 

“Unearthed has a great framework that illustrates the innovation journey, and the incremental steps companies need to take in expectation and effort to reach their goals,” Prickett told me. “Those steps are important because most systems and processes that exist within mining businesses are designed to minimise risk. It’s possible to make incremental changes to them over time to better support open innovation, but if you try to make a step change, then that’s not a sustainable model.”

McFarlane agreed: “It’s crucial to work within existing systems to incentivise change and carve out space for higher risk innovation, instead of trying to work against those systems. Otherwise, programs can get shut down quickly as soon as there are changes in leadership or commodity price.”

While everyone does innovation differently and there are no right or wrong pathways to success, there are some common ingredients…

“It’s vital to have a clear innovation strategy and strong executive support,” said McFarlane. “We also believe in funding innovation from a central pool that acts independently to asset budgets. That allows group-wide prioritisation, and diversification of risk across a portfolio of work.” 

Innovation projects naturally come with a higher degree of failure than other mining projects, and greater uncertainty around timelines and budgets. It takes time and patience to incubate, develop and prove new solutions, and for this reason, strong, independent governance and processes are crucial. 

Without that reassurance, executives will find it hard to get comfortable with the level of uncertainty these projects entail. And, unless they’re comfortable (with being uncomfortable), they will provide limited sponsorship when it matters the most. 

Resilience is the last crucial ingredient. It famously took Thomas Edison 999 failed attempts before he created a lightbulb that worked. When quizzed about the number of failures he had seen over the course of his career, Edison responded: “I have not failed 10,000 times—I’ve successfully found 10,000 ways that will not work.”

The importance of this attitude is echoed by the team at Deloitte in the 2022 edition of their Tracking the Trends report which covers innovation models and mindsets:

“Much of this relates to culture and how success is measured, not just at company level but also at the industry level,” they state. “Unlike in safety, where risk of any kind is unacceptable and, therefore, controls are added and very rarely removed, in mining innovation, there are two types of risk: risk of failure and risk of success—and both are equally valuable.”

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The team at Unearthed run an open innovation workshop. Image: Unearthed

Again, that’s why appropriate structures and processes are needed to document, analyze and report innovation attempts, so that when failures and successes do occur, learnings are captured and value can be found, even if the project didn’t deliver the desired result.

“It’s interesting that the mining industry has such a wide risk tolerance in areas like mineral exploration, but not in innovation,” noted Prickett. “Everyone appreciates the funnel-shaped pipeline of projects that’s used in exploration – for every 10,000 identified mineral prospects, only one in 10 will lead to a drilling program, and one in 10,000 will lead to a new mine. It’s a shame that same approach isn’t applied to innovation too.”

Creating sustainable value 

Unearthed and South32 have been working together for a couple of years, at first on an ad hoc basis and more recently with greater intent. Recent efforts have focused on three specific challenges: CH4-No-More, Fines-to-Fortune and Ventsafe

Despite having subject matter expertise internally and having already explored traditional pathways, the team at South32 felt it was worth widening the search for ideas and technologies using open innovation. And the results proved them right.

“These were areas where traditional means of identifying solutions had been exhausted,” said McFarlane. “We needed optionality and the open innovation challenges were able to provide us with new options that our teams weren’t previously aware of, some of which were quite surprising. 

“The benefit of open innovation is that your challenge is articulated to an exponentially broader set of people – entrepreneurs, companies, suppliers, researchers, etc. – than it would be otherwise. It’s the breadth this approach offers and the novel views that someone outside a domain can bring that are so valuable to us. We’re now actively working with selected innovators from the challenges to test and develop their ideas into implementable solutions.” 

Even if the challenges hadn’t turned up any new ideas, McFarlane said that result would’ve still been valuable in that it would confirm they were already considering the full option set and could therefore make confident decisions with the information in hand.

“Were there any unexpected benefits that came with this approach, for instance, solutions to adjacent challenges or new relationships that have also proven valuable?” I asked.

McFarlane thought for a moment. “There are a couple that we’ve considered for adjacent areas, and we were pleasantly surprised with how well the model enabled us to establish new collaborations with our mining peers to collectively support areas of mutual interest,” he said. “But we, like many other mining companies, are still early in our open innovation journey, and I think we’ll uncover new benefits in the years to come.” 

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It takes time and patience to incubate, develop and prove new solutions. Open innovation provides a means to accelerate that process. Image: Unearthed

The new norm in mining innovation

Both McFarlane and Prickett believe that, in time, open innovation models will become a standard tool in the mining industry’s innovation arsenal.

“Many of the solutions that the mining industry is currently seeking don’t exist internally. So, in a lot of cases, we have no choice but to look externally,” said Prickett. “Even in areas where we do have technologies and competencies, history has shown us that open innovation often leads to a more efficient and cost-effective solution than would otherwise be found or developed.”

“There’s a strong track record of game changing innovations coming from people with outside expertise,” McFarlane agreed. “And miners are taking notice – after all, why wouldn’t you harness the network of talent, experience, and R&D funding that exists around the world to work on the challenges you’re facing?”

Good question. The world is continuing to become more connected and, in the future, it’s likely that open innovation could become the industry’s usual way of scouting for ideas and partners to generate a continuous stream of solutions and opportunities.

“If companies didn’t need to innovate, then maybe there wouldn’t be a need for these models,” said McFarlane. “But I don’t see that happening anytime soon, and there’s always value to be found in innovating.” 



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