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Is the mining sector innovative?

Mineral materials are the foundation of modern industrial society. We use vast quantities to construct the infrastructure of our lives – roads, power stations, airports, telecommunication networks, and our homes. We also use them to produce durable goods within this infrastructure, such as cars, planes, hospital equipment, mobile phones, and refrigerators. Innovation is key for continuously improving mineral extraction and the mining sector. It is critical to develop new exploration techniques for new mineral deposits and to improve the efficiency and sustainability of the recovery of minerals from the ground. Would you like to discover more about innovation in the mining sector?

Estimated reading time: 4 minutes
(Photo: Getty Images)

Why do mining firms innovate?

Mining firms can increase productivity in three ways:

  1. by improving efficiencies at existing mining sites,
  2. by opening new sites with higher yields or
  3. by closing old sites with lower yields.

Innovation can contribute to all three productivity efficiency avenues. Innovation can increase efficiencies and reduce costs in production, processing and delivery to market at a given mining yield. It can increase the accuracy of the exploration for new mine sites or reduce the costs of mine development. Finally, it can reduce the financial, social and environmental impact of the closure of mines.

Simplified view of the life of a mine
Simplified view of the life of a mine

Can mining firms create new “products”?

Product innovation in the mining industry is a little different to other economic sectors. Many mined products – such as copper and zinc – are simple commodities with a demand that is insensitive to product differentiation and branding.

The discovery of entirely new products is extremely rare, suggesting that the scope for product innovation in mining is very limited. However, some industrial minerals – such as borates, fluorspar or kaolin – are sold based on their chemical and physical properties rather than on their elemental content, creating opportunities for the development of product variations. Precious and semi-precious stones also offer scope for developing new product variants. Furthermore, there can be new and innovative uses found for existing products, for example, the use of rare earth elements and lithium in green energy applications. However, while the discovery and development of new mined products may be rare, the discovery of new commercial deposits of existing products through exploration is an important part of the economics of the industry.

In fact, when talking about product innovation in mining, there is a case to be made that the deposit or the mine is the “product” rather than the mineral recovered from them. Viewed in this way, a company’s expenditure on exploration becomes a part of its research and development (R&D) activities, given it is expenditure aimed at finding new, commercially exploitable, sources of a mineral.

There are interesting parallels here with other industrial sectors. Mines open up, operate and close down, very much in the way that manufactured products are invented and produced, before moving through to obsolescence. Similarly, just as industries like pharmaceuticals spend large amounts of money on trying to discover new marketable drugs, despite the long odds against them, so mining has to battle equally long odds in its search for commercially viable “greenfield” (i.e. new) sources of a mineral commodity.

Who are the main innovators in the mining ecosystem?

In addition to mining companies, companies supplying very specialized mining equipment and technology services the METS companiesare active actors in this ecosystem.

Mining companies are increasingly sourcing cost-reducing innovations from such specialized suppliers. As in many other large-scale industries, mining companies acquire new technologies embedded in the heavy machinery and equipment they require for their operation. Innovation may also take part as outsourced R&D and other technological services. METS innovations are a substantial part of the innovation being deployed in mining activities.

Established companies – both mining and METS – created about two-thirds of the mining-related technologies in our data for the years 1990-2015. Individuals – likely on behalf of startups and micro-companies – originated almost a quarter of these technologies. Academic institutions produced the remaining technologies, where public research organizations (PROs) and universities generated 9 and 6 percent, respectively. However, in recent years, there has been a rise in the participation of universities in the innovation ecosystem. They were almost totally absent from the scene before the turn of the century. This may be the result of the increasing number of collaborations between universities and companies.

Mining patent families by applicant type (1990–2015)
Mining patent families by applicant type (1990–2015)

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