Relentless innovation in mining
By Jan Kwak | April 25, 2016
Mining has traditionally been about economies of scale. Ever-bigger trucks, ever-faster machines, ever-deeper pits. But bigger-means-better doesn’t cut it anymore.Demand for our products is down. Our response? Increase supply. We cross our fingers and hope the lower costs will starve the competition out of the market. If we can get to the bottom quartile, we think, we’ll win. But it only makes things worse and the whole industry suffers.
If economizing was the answer, we’d have the problem solved by now. But most of the easy, low-hanging fruit has been picked. Companies are struggling to make their planned production rates, and they’re losing resilience because of all the cost-cutting.
It’s time for new thinking. Time to start doing things more effectively, in a smarter, higher-value way. That means thinking outside the box, coming up with new ideas about how to do more with less, and do it well.
Today, in remote locations especially, fuel must be trucked in. It’s expensive. It has to be stored. And there are undesirable by-products to deal with.
So all over the world, mining companies are making the transition from diesel fuel to electricity. The costs of underground ventilation and cooling drop tremendously when they’re powered by electricity. Issues around getting diesel fumes out of mines—a very real, expensive, safety-threat-of-a-problem—disappear.
Electrifying even the smallest bits of equipment can add up to big returns. Better use of energy. Better energy recovery. And the integration of renewable power.
A lot of mining is still done in a batchwise, discontinuous way: drilling, blasting, mucking, truck loading. The trucks drive away and feed into a big bin or pile. Then the product is moved again to a continuous processing plant.
Scheduling all those discrete steps is inefficient. So anything we can do to make operations more continuous offers a step-change in performance improvement.
Working with clients all over the world the way we do, we see a lot of mines, and we have a lot of data. When we look at mines that operate in continuous mode—like coal or potash—and compare them to hard-rock operations, the benefits of continuous processing are evident…and big.
The challenge is getting there, rethinking what flow sheets will look like when continuous processing is operating effectively. We've got teams around the world thinking about these kinds of problems right now. They’re breaking continuous mining down into the little segments, looking at the little parts of technology we still have to solve.
Putting the pieces together
What do we know about heap leaching? About hydrogeology? Directional drilling? Fracking? How can we pull these pieces together and develop them into technologies that allow us to extract nothing but the pay metals or the minerals we're after by some kind of in situ process? It’s one more area where we’re working closely with our clients and research groups around the world.
The whole flow sheet
Here we start to see the entire realm of possibilities and opportunities: mine-development-optimization; early waste-rejection; process-intensification. Taken in part, there’s improvement. Taken together, there can be transformation.
We need to step away from those paradigms we're dealing with today, the ones that caused those problems of cost versus value. Of oversupply in an under-demand market. When you change the flow sheet, you can get your business to respond to those things.
Similarly and just as importantly, we have to look at business configurations. Is there a better way to run our business? How do we work with the value chain? Where is the technology coming from? Where are ideas coming from? Is this the right way to organize our supply chain?
What’s the best way for mining companies to allocate the risk in the supply chain, particularly the technology risk? Working with clients all over the world to address these kinds of challenges makes us very well-placed to manage, look at, and mitigate technical risk.
Innovation is possible in financing, too. Something’s not working right with the traditional financing models that we've been using for the last 20, 50, or 100 years of mining. We have to now look at the four quadrants: Where is the technology coming from for the implementation? Where is financing coming from? Who owns the mineral rights? And who sells the products? If we can revisit and even repurpose those things, we can create new relationships between companies like Hatch, the financiers, and the mining companies. Together we can break new ground, and think about new business models that don't operate like anything we see today.
Making technology strategic
Finally, I think it's really important that mining companies come back to making technology a strategic imperative. For too long, most have outsourced technology or relegated it to a department somewhere on the side. It’s a missed opportunity. The companies that win in mining today are going to be the ones that take technology by the horns and make it perform for them in brand-new ways. Maybe in ways we're not even thinking about today.
I doubt that even the biggest mining companies have as much exposure to the mining world as we do. So when we look at mining operations around the world and interpolate what’s working, we almost always find potential for high-value returns.
How can I scale my operation? How can I use technology or optimize flow sheets to make my operation more scalable, and not cannibalize our own markets just to stay above water? Hatch has been thinking deeply about these things, and we have a lot of good ideas to share with the industry.
As we start looking at new technologies from inside mining and out; as we start to piece them together in new, creative ways; we find new flow sheets, new efficiencies, and new mind-bending ideas. Mines of the future that are already here, now. Today.
For me, that's the most exciting part of mining. And it's a place where Hatch wants to be.