February 2016

Exploration – never a better time to partner

  • By Stephen McIntosh FAusIMM, Head of Exploration, Rio Tinto

Examining collaboration, technology and social licence to dispel exploration myths and increase success

Seventy years ago geologist Harry Evans sailed a three metre dinghy with a temperamental outboard motor around 300 kilometres of rivers and coastline in western Cape York.  Harry’s discovery of the bauxite brilliance we now know as Weipa followed a ‘failed’ oil exploration campaign some months earlier. It is another reminder that a commitment to exploration can provide welcome and valuable surprises.

Harry could not have succeeded without two important partners: first, his Aboriginal guide, Matthew, who acted as pathfinder, and second, his corporate sponsor Sir Maurice Mawby, a former president of the AusIMM. The value of partnership was also on display in the 1960s with the discovery of Mt Tom Price, and we are now celebrating 50 years of operation in the Pilbara.

It’s astonishing to think the contribution those two great provinces – Cape York and the Pilbara – have delivered to Australia and the world; they are built from the energy and imagination of a team of committed explorers. In Australia many of our assets largely came into being through exploration; exploration is very much in our DNA.

The challenges of exploration in the 1950s and 1960s are somewhat different to those of today.  Instant communication has overcome the tyranny of distance, but the task of finding new quality deposits and keeping an open mind to new possibilities and fresh concepts remains.

In the current economic environment with lower metals and mineral prices and exploration dollars at almost a decade low, it would be easy to close our minds to the great exploration potential that remains, to give in to the view of ‘peak discovery’. So what does our industry need to do?

With a fresh public debate underway in Australia about the role of science and innovation, we must show the value our work generates for our shareholders and for the community at large. We do not need to re-invent what we do, but we can refocus and reframe it.

Three trends or themes are clear to me:

  • the first is to take a lead from other industries either in biotech, or software development and develop ecosystems of discovery, through working better in joint ventures and partnerships
  • the second is to open our eyes, and leverage what we have in wonderful new exploration technologies and big data
  • third is to continue to improve exploration access and public acceptance of the value and importance of our work.

Ecosystems of discovery – collaboration improves the odds of success

In science the lone discovery is rare. It is typically built on previous knowledge, collaboration, commitment and partnerships. Collaboration provides access to skills, experience, technology and other resources that we might not have, or don’t necessarily want to develop because they are not our specialist skill.

We know that partnerships and alliances with other mining and exploration companies, technology firms, service providers and tertiary institutions will help us move forward more efficiently and effectively.

Our industry has reached a new maturity that calls for ecosystems in which risks and rewards are shared and the specialists do what they do best. In the case of junior explorers, it is both new ideas as well as ‘boots on the ground’ work. In the case of majors like Rio Tinto it is using our decades of experience, vast troves of data, and modern technologies to sort the interesting ideas from the rare Tier 1 opportunity.

We are continually asking ourselves: what can we do together that we can’t necessarily do alone? How can we catch the wave of the next new discoveries by ensuring we are able to locate and access all the best projects?

Partnering and collaboration are at the heart of Rio Tinto’s approach. Gone are the days when collaboration was regarded as ‘group think’ or signalled a risk to intellectual property and confidentiality. These can be managed.

There are more than 700 junior explorers in Australia; clearly Rio Tinto cannot partner with all of them.  However, modern technology provides an opportunity for juniors to tap into our network, our exploration ecosystem, leverage our history and linkages. That is why in August we announced we would carry the cost of sampling when reviewing project generation opportunities. We want juniors to knock on our door. Then in October we announced a farm-in deal with Perth-based Antipa Minerals seeking to explore the district around the Citadel copper and gold project in the Paterson province near Telfer. We hope it will be successful, but time will tell.

Not every project can or will fit our exploration criteria, but we all need to be open to the opportunity, for often we may overlook what has been walked over before.

I am reminded of the discovery of Century Zinc near Mt Isa. Discovered by CRA Exploration in 1990, it was called ‘Century’ because the area had been held under continuous exploration title for more than 100 years. The mineralised outcrop had been mapped by the Geological Survey of Queensland. Yet nobody recognised it for what it was. It looked leached and uninteresting, but it was in fact the surface expression of one of the world’s great zinc deposits, hiding in plain sight.

Today with technology, sampling a few rock chips or core can take a new look at old ideas – maybe another Century, Argyle, or another yet–to-be-identified Tier 1 deposit.

An ecosystem moves and adapts with the environment and technology and partnerships provide the impetus and the opportunity to grow with the times.

New technologies and big data delivery

The technologies available in our industry have never been better. What the old timers would have given for a phone that worked, a portable XRF in the backpack, deep penetrating geophysics or now path-finder exploration chemistry and mineralogy testing. Add to this the computing power of big data and we have great opportunities to take a fresh look at concepts, projects and samples
like never before.

Space prevents me from going into detail on various new technologies, but let me focus on one breakthrough technology, developed in collaboration: ‘Greenrocks’.

Greenrocks was initially developed as part of a series of AMIRA industry collaborative research projects run by CODES at the University of Tasmania. Rio Tinto’s use of mineral chemistry started life aiding our diamonds exploration programs in the 1980s, but the research done at CODES has expanded mineral chemistry exploration applications to other minerals, most notably for copper. For copper, the technique utilises the trace element mineral chemistry of epidote and chlorite to provide clues to the location and fertility of porphyry copper systems. It means we can potentially detect a copper orebody from up to four kilometres away, which is well outside the visible pyrite halo.

This tool is of enormous value when we are faced with a situation where the porphyry system is under cover and only the distal alteration is exposed.

We are the only exploration company now routinely using automated mineralogy and major plus trace element mineral chemistry for mineral exploration. Whilst all of the industry sponsors of this important research have access to this technology, what I think sets Rio Tinto apart is the capacity to produce the necessary data at high volumes and low cost, in-house. Our laboratories at Bundoora in Victoria generate orders of magnitude more data than any university laboratory, at a lower cost and greater speed. But as important as a lab is, it is the intellectual property of our database of decades of mineral samples across Australia and the world that we can use to compare and contrast, or sort and select. A data set that is almost impossible to replicate, and of enormous value for project identification and target generation.

A data set that we can build upon, and work with junior explorers to sift and prioritise opportunities with preferred mineralogy and geochemical signatures.

So we firmly believe the new technologies will bring forward new discoveries, we just need the boots on
the ground.

Dispelling a few myths – peak discovery and society’s needs for metals

Whilst exploration spending is lower, and may fall further, we need to dispel a few industry and broader community myths about our role.

The first myth that needs tackling is that we have reached ‘peak discovery’ in Australia. As I’ve suggested, I think new technologies have only just begun to peel back the surface cover of new deposits. If we could erode another 100 or 200 m of rock from the earth’s surface today, there is no logical or geological reason why a large number of new world-class orebodies such as Mt Isa or Broken Hill would not be exposed and easily discovered.

The second myth we need to address is that lower exploration spending cannot also be higher quality spending. Technology and productivity means we can do more with less; we can be smarter with our dollar both in the lab and in the field.

Metrics such as the dollar spent, or metres drilled are important. But let’s not overlook the intangibles of our experience, our brain power and modern computing.

The third myth we need to dispel is that the world has an abundance of resources and we should just leave new deposits in the ground. The reality is the world continues to grow and needs metals, minerals, and materials to house, power, and support a growing population.

By 2050 the world’s population will increase by a third to a predicted 9.5 billion people. In the next fifteen years, 470 million people in China, India and the ASEAN will move to an urban environment. That is a huge flow of people requiring materials that make modern life work. For example, we believe that:

  • steel consumption will grow 40 per cent in the next 15 years, requiring more iron ore and metallurgical coal
  • primary aluminium consumption will increase by more than 40 per cent over the next decade, requiring more bauxite and alumina
  • moving to more renewable energy sources for our power generation adds to these needs with copper for these grids and metals such as rare earths and lithium becoming more important.
  • This is the case for more discoveries and development, not less, to take account of mine depletions, falling head grades and resource replenishment.

The fourth issue we need to address is the idea that land access is not a problem.

Ask any junior explorer or large company, and clearly it is a problem. In Australia, unfortunately, we have a substantial administration burden that is hobbling efforts to gain timely access to mineral title in order to undertake even preliminary ‘light-touch’ reconnaissance-style exploration. This is exploration that does not disturb the ground – well before we think of access roads and drilling.

The time-lag from a project generation idea to getting on the ground can be as long as three to five years.

The problem does not necessarily lie with legal and/or moral obligations. We fully understand these and are happy to abide by them; we have engaged extensively and successfully with landowners and communities for decades across Australia. Take, for example, our Indigenous Land Use Agreements, which are world-leading in their innovative approach, and central to our licence to operate.

The challenge lies at the bureaucratic level suffocating early stage exploration and reducing the country’s long-held reputation as a good destination for minerals examination. In some states, regions and communities, access is easier than in others. But in many instances, the first year of a licence period can be exhausted by the need to gain the necessary regulatory approvals, truncating the time left for actual exploration activity and negatively impacting our success rates.

Smaller exploration companies – the corner store of the mining game – that have to wait this long to test an idea may simply not survive financially in times like this.

Science and discovery – advancing our planet

The economic arguments for more minerals exploration are obvious, but there’s a broader and more human motivation to consider. As NASA astronaut and Commander of Apollo 8, Frank Borman, said ‘exploration is really the essence of the human spirit’. Scientific exploration has taken us to the moon and created cures for previously fatal diseases. It has allowed the world to miniaturise, visualise and capitalise.

NASA’s spend today with its missions to Mars is far less than the 1960s and 1970s when it went to the moon. The results in recent months from the Red Planet include evidence of ancient organic molecules, which raise as many scientific questions as answers. This does not hamper NASA’s drive for exploration. It fuels fresh curiosity and inspiration, fresh commitment. In exploration we need to be comfortable in a field where there are often more questions than there are answers, and where trial and error is better than not trying in the first place.

Mineral exploration here on earth has been and remains a key part of a global revolution of discovery. Without the raw materials that our industry provides, a swathe of research and development and much of the acceleration of global innovation would not be possible.

In the years ahead our industry needs to be very mindful of the messages it sends. That our role in the advancement of this planet is pretty much done, or at least on hold, or that reduced spending means a slow departure from the field.

These cannot be the messages society takes away.

We would all like the biggest budgets possible; however, the work we do in minerals exploration today can be as interesting and as impactful as ever. We just need to work smarter in partnership, dispel a few myths and build on the exploration ecosystems we have.

For like Harry Evans 70 years ago in Cape York, who knows what lies just around the next bend? 

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  • Rene Sterk
    22 Mar 2016 at 7.32am

    Good read. Indeed, needs a wider audience!

  • Allan Trench
    12 Feb 2016 at 10.16am

    Excellent. This sort of insightful perspective should be in the likes of The Australian and AFR – but sadly seldom gets a mention