Day Two of the International Mining and Resources Conference down in Melbourne opened with a bang on Wednesday 11 November 2015. After a fascinating talk from McLaren Applied Technologies on how the F1 industry has innovated by applying existing technologies in different ways, Tony O'Neill, Technical Director of Anglo American took the stage. Tony joined the conference to speak on "Open and collaborative innovation: key to unlocking value in a new lean mining world".
Tony started by acknowledging that we are currently facing a number of challenges in mining. Productivity has fallen by 20% since 2004, due to a combination of factors including structural labour, elevated input costs, critical shortages of water and energy, declining ore quality and a legacy of inefficient capital allocation. The margins for our industry are not high enough throughout the cycle, with a clash between the short term cycles of markets, governments and communities vs. the long term return for investment. Tony felt this stems from adoption and system issues, rather than a pure lack of technological innovation. He admitted this had even happened within their own organisation, where in recent times Anglo American developed its own kit with partners to retrofit its underground autonomous trucks. The technology was developed, but they failed to implement and adopt them as a company.
Tony went on to point out that whilst the business outlook appears gloomy, the technology situation looks far brighter. He stated: "We are on the brink of a second machine age, which will rely on computer and digital advances." Our challenge is how to harness the pending computer power opportunity, when our industry is lagging behind and not yet fully equipped to cope with developments such as big data, robotics and computer simulation. Collaboration, partnerships and the sharing of different ideas across a variety of industries, with peer groups and academia and with different execution models will all be needed to make breakthroughs.
What are the key success factors?
Tony started by stating that critical to achieving step change in our sector, is how successfully we match operational excellence with capability and technology. However, mining companies first need to lay the foundation with a structured and organised approach to operational planning. This will create an operational discipline which allows for the faster adoption of technology, as well as an enabling environment to further integrate innovation in long, short and medium term plans.
Key to successful transformation of our sector is placing technology and operational innovations at the forefront of the business. We have to become wiser about spending money on innovation and how to place a value on that innovation. Mining is at a turning point and a different response is needed to what we've done in the past; as Tony said, “we must dare to lead the way”. As a company, Anglo American has taken the first steps down this path, starting and continuing a structured approach to innovation, in order to gain a competitive advantage. They have a program that looks at smart innovation into the future, driven by mining’s current focus on sustainability in all its forms.
This program promotes using holistic systems, guiding Anglo to think of the wider context of the technology and working closely from the outset with the people who will ultimately use it. Tony felt this program accelerated their ability to innovate within the areas of safety, efficiency and more sustainable ways to unlock mineral value.
A foundation part of this program is Anglo American working with a variety of partners, each of whom have different skill sets and fresh perspectives, sometimes from other industries. They have spearheaded open forums on sustainability, processing and mining, working with diverse stakeholder groups to address global issues facing the mining industry, such as operational efficiency, water management, safety or sustainability. The end goal is to make these solutions available to the entire industry, rather than only Anglo American benefiting from them.
This is a fairly different approach to that taken historically by the big miners (mid-tier companies such as Gold Fields have already been embracing this strategy for several years), who are renowned for jealously guarding their IP. However, Tony felt Anglo American would derive a greater competitive advantage from this approach, instead of retaining an insular, reactive methodology. Open collaboration is the way forward for them, with their mission to learn from other industries who embrace innovation at an accelerated pace of adoption.
One example of this is their involvement in the KIN Catalyst: Mining Company of the Future Development Partner Framework, a cross-sector collaboration between leaders from mining companies, contractors, suppliers, researchers, academics, not-for-profits and representatives from indigenous communities. They’ve also worked with the chemical and oil and gas industries to improve safety, with the result of a 62% improvement over the last five years in safety standards in the sector in South Africa.
Tony cited this example as proof that we must look outside our industry for ideas and application. He said we need these “restless innovators” from the oil and gas, military and aerospace sectors, to name a few.
Anglo’s Open Forums
Anglo American’s open forums are a catalyst for new ideas both inside and outside the company that will deliver an uplift in value for Anglo and the sector as a whole. Their purpose is to generate thousands of ideas, some of which will be novel and a couple of which will be truly transformative. One important element of the forums is to have a balanced portfolio of ideas in each, to ensure they have disruptive innovation covered for the future. Anglo set a benchmark for rapid step change that targets financial benefits to the company within 18 months. Their aim was to hold three of these open forums within the first year of inception, which has been achieved.
Anglo’s first focus was water management – a challenge many countries face in different forms, whether it’s a lack of water, too much water, an issue with contaminated water etc. Anglo American decided to think outside the box with water management, challenging traditional assumptions and asking themselves: “What if we could redesign our processes and technology to only use recycled water, or be totally water free?”
Around the globe, Anglo American use 200 million cubic litres of water per year. 70% of their mines are in water stressed regions such as Chile, South Africa and Australia, making it appropriate this was their first area of focus. Their Water Management Open Technology Forum took place in June 2015 in the UK, with 28 companies represented around the table. Following the event, they are now giving priority to closed loop water systems which have a pre-set capacity and are then sealed, thus negating the need to add new water to the system. The benefits will remove water caps and therefore production caps, bring down water treatment costs, hostilities with local communities and lift their business resilience. These are some compelling outcomes.
Their second open forum focused on processing, where the concept was to come up with an adaptable plant that you could easily adjust to any size and grade of deposit. The goal was to transform mineral processing into a fully flexible and highly integrated system, reducing the water and energy footprint required for extracting more ore. Processing plants are notorious for their long and expensive lead times to get the plan designed. The outcome of this open forum was a focus on the modular plant.
Modular plants are easily designed and constructed, and they can scale up and down to suit business needs (after all, throughput is not always the same from month to month, or year to year), plus can be built out of alternative materials. (Anyone particularly interested in modular plant use for the mining industry should contact WSP Parsons Brinckerhoff who are currently leading a collaborative project on this topic. Email Megan Edwards for the correct contact). Tony commented that modular plants can be “built on the run, from parts that can be swapped out and maybe even printable parts in the future”.
Other topics of intense discussion included separation technologies and the current loss of metal tailings due to these technologies, reducing water and energy consumption, enhancing product quality, decreasing the economic cut-off grade and gaining increase in overall multi-factor productivity.
The last open forum, which took place in the first week of November 2015 focused on mining. The long-term focus for this forum will include new mining methods such as underwater, under ice mining and how the sector can replicate the attractive economics of open pit mining at great depths. It will not be purely focused on “mining mission control” as termed by Tony, but rather seeking to address the inability of the sector to simulate the value of mining methods or technology innovation before the stage of expensive field trials. Two topics were specifically covered in the mining open forum: the modern mine and the scalable mine.
Anglo American have now worked with over 60 companies through this first round of open forums, who have provided a broad set of solutions. A big takeaway across the three forums is the fact that known technologies can be re-figured to deliver different outcomes for our industry.
Where to from here?
Tony summarised that Anglo American are out of the starting blocks with this program, but acknowledged that it is common knowledge many initiatives of this type can stagnate, or don’t deliver the commercial benefits they were supposed to.
One of the measures of the success of their program will be a reduced time from idea to implementation. Tony ideally wants it reduced by 2/3, but Donovan Waller, Group Head of Technology for Anglo American is targeting a reduction by half. If ideas or innovations out of the open forums fail, they need to do so quickly and cheaply. Anglo is striving to create a learning environment within the organisation is that balanced with the operational environment, allowing them to scale initiatives up and down in relation to market conditions, always keeping value front of mind.
Tony concluded his presentation by noting that whilst our industry may be on its knees right now, the technologies of the future, such as Nano materials, modular design and robotics, are already here. Tony said: “It has never been so essential, or a better time, to take control of our destinies. Continual innovation in mining is the new business as usual and it is here to stay.”