The world beyond mining has changed. Today’s rate of change, particularly technological change, is staggering. Many new technologies, and the solutions into which those technologies are incorporated, have the potential to benefit mining. Yet mining has, until now, been slow at adopting them.
[Article by Joe Carr, Axora Industry Innovation Director].
Historically, mining dislikes change. Fundamentally, the main reasons for this are – or at least have been – understandable.
First, the goal of extraction industries is straightforward and doesn’t change: it’s the recovery of product from the ground. It’s a simple goal, and methods of achieving it have changed relatively little over thousands of years.
Second, there’s the historical lifespan of mines. Most mine lifespans are measured in anything from centuries down to decades, and the really good ones rarely less. So, once a mine has embarked on a certain path – typically defined by fixed factors such as location, geology and climate – miners tend to see limited scope for change, especially after the vast amounts of capital that will inevitably have been expended even before the first ground is broken.
Many new technologies, and the solutions into which those technologies are subsequently incorporated, have the potential to benefit mining.
For these fundamental reasons, and despite the passing of hundreds or thousands of years, there was very little to change. So very little did.
However, the world beyond mining has changed – very much. Today’s rate of change, and particularly technological change, is quite staggering. Many new technologies, and the solutions into which those technologies are subsequently incorporated, have the potential to benefit mining. Yet mining has until now been pretty slow at adopting them. Why?
In all probability, it isn’t change itself that’s the problem for mining: it’s the perceived risk associated with change. An “if it ain’t broke, don’t fix it” mindset, if you like. This is the way we’ve always done it and, while it might not be perfect, the risk of trying to improve it outweighs the benefits of succeeding. And, given the billions of pounds that might have been invested in a single mine, this is understandable. Mining is the industry, but risk management is the name of the game.
But today’s mining sector is faced with a powerful combination of motives, means and opportunities to change, with – for the first time in history – greater risk attached to not changing.
Yet where risk is concerned, mining is a strangely contrarian industry. It will happily pour billions of pounds into inherently risky, speculative, explorative ventures, 99.9% of which yield nothing of value. Then, once it has decided to open a mine, all appetite for risk is shut down immediately resulting in minimal changes to mining because “that’s the way we’ve always done it”.
But today’s mining sector is faced with a powerful combination of motives, means and opportunities to change, with – for the first time in history – greater risk attached to not changing. The whole ‘environment’ for change in mining is now… different.
The motives for change are much as they’ve ever been for any business: productivity and efficiency. These are two of the metrics that dominate a mine manager’s life, for they impact profitability.
I’m reasonably certain that no-one reading this is unaware of how the cost of energy has increased recently, with every prospect of it continuing to do so.
A crude calculation is that productivity is equal to the amount of the commodity produced divided by the cost of producing it. Since miners have less control than ever over the market value of their product, a better calculation for productivity is the value of the commodity produced divided by the cost of producing it. The top part of that still-simple equation being largely out of miners’ hands, a very keen focus on costs is essential because, if your costs are (or become) the highest in the sector, then when the price heads south… well, you're next in line to go out of business.
Now, let’s look at just one of mining’s largest costs: energy. I’m reasonably certain that no-one reading this is unaware of how the cost of energy has increased recently, with every prospect of it continuing to do so. These rapidly rising energy costs are bringing into question the sector’s relationship with diesel, which has now been in use in mining for over a hundred years.
It’s all very well knowing that diesel’s days may be numbered; what can be done now to reduce costs – whether for diesel or anything else? Where are the means of change?
Don’t underestimate the significance of miners even wondering about diesel. For many years, the attitude of mining to energy has been “I’ve got diesel equipment and it works, so why would we possibly switch to anything else?” Considering that power and fuel is one of the largest mine input costs, it always surprises me how much people are prepared to accept that “Oh, well, that’s just fuel, there's nothing we can do about that.” But, while it has been considered too risky to move to electric, or hydrogen, or anything else, purely on cost grounds a new view is developing that it may be a greater risk to not explore ways to become less dependent on diesel.
The spiralling cost of energy is an example of a motive for change. It’s all very well knowing that diesel’s days may be numbered; what can be done now to reduce costs – whether for diesel or anything else? Where are the means of change? In fact, such means are plentiful, and are mostly – just as they are in the world beyond mining – technology-based.
Many of the technology-based solutions now available have as their objective the reduction of costs. For example, addressing the issue that is the cost of diesel, solutions based on Machine Learning and Artificial Intelligence algorithms are already shaving 10% off the diesel costs associated with mine machinery.
It’s why we at Axora are constantly scouring the planet for new, innovative, effective solutions for the Axora Marketplace, so you – dear reader – need come only to a single place to find them.
Other solutions predict maintenance needs, so such work can be scheduled in conveniently rather than production coming to a halt once something vital has broken. Yet more solutions focus on safety, others on training. Indeed, there are thousands of technology-based solutions that have been designed, built, tested and proven to deliver very specific, often niche benefits to miners. What they generally all have in common is that they all make mines and mining cheaper to operate, since it is generally accepted that a safe mine is also a more productive and efficient mine.
What these solutions also have in common is that they are being devised, built, tested and implemented anywhere in the world; they are not always easy to find. It’s why we at Axora are constantly scouring the planet for new, innovative, effective solutions for the Axora Marketplace, so you – dear reader – need come only to a single place to find them.
So, that’s motive and means. What about opportunity? In truth, there has always been a motive to change, and there has always been a certain degree of means. What factors have emerged that are encouraging – or forcing – mining to look at change through a new lens and overcome its traditional inertia where change is concerned?
Cyanide use is reduced by 90% without any significant change to the process, just slightly different management.
At first sight it’s tempting to think that issues such as ESG, safety targets, climate targets and public opinion are motives for miners, rather than opportunities. My view is that these are, generally speaking, considerations that have or are being imposed on the sector from external sources; bluntly, they are not automatically fundamental to the process of mining. So, motives they are not. Since change is being imposed on the sector, it is an opportunity to change and do things better.
Take mine safety, which has improved dramatically over centuries. However, in recent years, improvements in mine safety appear to have plateaued somewhat; the low-hanging fruit appears all to have been picked, as my colleague points out here. Undeterred, many providers have developed technology-based solutions, including some wonderfully sophisticated AI-based technology, that can further improve mine safety. As I mentioned earlier, these are not simply an additional cost for miners to bear (albeit in pursuit of the perfectly reasonable objective of zero harm): miners have found that safer mines – which requires changes, of course – are more productive, more efficient mines.
Environmental considerations are at the forefront of many decisions now. Take, for example, gold mining, which has, for hundreds of years now, used cyanide as part of the production process: miners can no longer afford to ignore the concerns of local populations over the prospect of cyanide being accidentally released into local rivers or other water courses; no matter how improbable the chance, when local people who know little about gold mining processing hear the word cyanide it triggers an often negative response. It seems obvious that gold miners will need to find new ways of doing things and, in the case of cyanide, there is an alternative: here at Axora we've been talking to a company which has a cyanide replacement technology for gold miners. Cyanide use is reduced by 90% without any significant change to the process, just slightly different management.
Once upon a time, despite the advantages, gold miners would have said “Yes, but cyanide works, so why would I change it?”. Not any more: just like the need to meet public expectations, and just like the need to meet safety goals, increasingly stringent ESG rules create opportunities for miners to implement new means that impact on their motives.
This alignment is enabling innovation champions in mining organisations to successfully make strong cases for incremental solutions that benefit their mine now, ahead of – perhaps – bigger changes to come.
Not all opportunities for change are externally imposed on the sector. Increasingly, mining itself anticipates future changes to mining. For example, we hear about initiatives such as low-footprint, reusable, modular mines, in which mining infrastructure is shipped in, installed, used for a far smaller length of time than is normal now, and is then dismantled and moved on to a new mine. While such silver bullet-level changes to mining are some way off, it’s clear that minds are more open than ever to the reality that change is, after all, good – and less risky than not changing!
For the first time in perhaps hundreds of years, the motives, means and opportunities for changes in mining are starting to align, reflecting the speed at which technological development is touching all lives and all industries. This alignment is enabling innovation champions in mining organisations to successfully make strong cases for incremental solutions that benefit their mine now, ahead of – perhaps – bigger changes to come. Here at Axora… well, we’re looking forward to supporting you.
