Innovation in mineral processing – distinguished past and uncertain future

  • By Tim Napier-Munn FAusIMM(CP), Julius Kruttschnitt Mineral Research Centre, Sustainable Minerals Institute, The University of Queensland

This article is an extract from the 2016 AusIMM G D Delprat Distinguished Lecture

The need for innovation

The mining industry has a reputation for being slow to innovate. In mineral processing at least, nothing can be further from the truth. Here are just some of the innovations that have occurred in my lifetime: huge increases in equipment scale, carbon-in-pulp/carbon-in-leach, new gravity concentration devices (eg Knelson, Falcon, InLine Pressure Jig and Kelsey jig), high pressure grinding rolls (HPGR), high-intensity flotation devices such as the Jameson cell, autogenous/semi-autogenous mills, fine grinding mills (eg IsaMill, Vertimill), high-rate thickeners, dense medium cyclone for minerals, high-intensity magnetic separation, improved reagent selectivity, new analytical instruments in the laboratory and concentrator, automated quantitative mineralogy (QEMSCAN and Mineral Liberation Analyser), process simulators for optimisation and design and computer-based process control. And there are lots more where those came from.

1Increases in scale alone have been astonishing. Figure 1 shows flotation cells operating in 1959 compared with the gigantic cells being offered by vendors today. The volume scale-up is a multiplier of over 400 times.

This kind of innovation doesn’t happen by accident. What is innovation, why is it so important and what drives it? ‘Innovation’ is best defined in contrast to its first cousin, ‘invention’, with which it is often confused. Invention is the generation of new knowledge. Innovation is the application of new knowledge for benefit. Or, as someone more wittily put it: invention turns money into knowledge, while innovation turns knowledge into money. The key word here is ‘money’. Innovation must produce a return, which is what all of the innovations previously mentioned did.

Guillaume Delprat, General Manager of Broken Hill Proprietary from 1899 to 1921, after whom the Delprat Lecture is named, was nothing if not a great innovator. One of the many involved in the invention of flotation, he, more than any other, actually made it happen through his entrepreneurial and management skills (Lynch, Harbort and Nelson, 2010). His story, and that of all those other innovators to whom our industry owes so much, teaches us that innovation is generally much harder, much more expensive and takes much longer than invention, so it needs conditions that allow it to thrive. Such conditions have prevailed in our industry in the past, but I see signs that this is less likely to be so in the future.

Innovation arises from many sources, including equipment manufacturers, engineering companies, universities and public research organisations, corporate laboratories, lone inventors, production staff and other industries. So there is no single magic innovation bullet.

Likewise, there are many drivers for innovation. I think of them as the ‘Seven Cs’. The most important of these is ‘Crisis’, such as the Broken Hill sulfide processing crisis that confronted Delprat and his contemporaries. The others are: Costs, Cash (revenue), Competition (mostly between vendors), Compliance (to regulation), Community (expectations) and company Culture.

Innovation is not optional. It is the basis of material progress in all human endeavour, and our industry is no exception. We are dependent upon technology. If we needed any further persuasion, then Figure 2 may provide it. It is the oft-quoted Mining Multifactor Productivity Index calculated annually by the Australian Bureau of Statistics. It is a complicated index and should not be over-interpreted, but it is a helpful record of progress or otherwise in our productivity.

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The rise in multifactor productivity (MFP) from the mid-1980s to 2001 was due mainly to innovations in industrial relations and technology. The precipitous drop from 2001 had many causes, but a major one was the decline in grades being treated, which is a dominant long-term trend in most commodities, meaning that more dirt has to be moved to recover a pound of copper or an ounce of gold (another cause for this drop was ‘unproductive’ investment – ie investment outgoings before returns were realised. The small recent rise in MFP reflects the investment returns starting to flow). Such a productivity decline is unsustainable, and innovation is essential to arrest it.

The problems

I want to discuss six trends that I believe are imperilling our capacity to innovate, so that we can devise strategies to deal with them. I’m going to confine myself to mineral processing because that is my trade, but I believe that the lessons are general. In no particular order, they are:

  • loss of skills and experience
  • short-termism
  • the problems of FIFO
  • the decay in industry-innovation links
  • obsessions with protection of some intellectual property (IP)
  • the limiting effects of the professional silos.

Loss of skills and experience

There is a tendency in our industry to cut staff costs indiscriminately when commodity prices are low. Hard-won experience and the corporate memory are lost and not replaced. Technical experts, the conduits for innovation, are seen as expensive liabilities rather than as assets.

Innovation teams are disbanded and people become fearful of change. This is anathema to innovation, and there is a direct negative impact on process performance (Munro and Tilyard, 2009; Munro, 2016). It happens in cycles, and in each cycle, the pool of skills and experience available to innovate, mentor young graduates and run the business efficiently is diminished. Workforce numbers must reflect prevailing business conditions, but the adjustments should not be indiscriminate and damaging to the capacity to innovate, as they are at present.

This kind of churn also has implications for future recruitment. Potential students react to industry downsizing by not entering the mining industry undergraduate programs. They are reluctant to join an industry that does not appear to value its graduates. Figure 3 shows graduation numbers for the metallurgical engineering option within the Chemical Engineering degree at the University of Queensland.

The low numbers in 2004 led to a decision by the university to close the course, much to the horror of many in the industry. Closure was only averted by an industry-university taskforce, which made a number of recommendations, including the funding of vacation work for first-year engineers and the establishment of some industry-supported chairs (plus a lot of hard work by my colleague Professor Peter Hayes and others). This was a re-run of the national crisis in the mid-1990s that resulted in the famous Minerals Council of Australia report ‘Back from the Brink’ (MCA, 1998), which led to direct funding of undergraduate programs at three Australian universities. The forecast crash in graduations in 2018 apparent in Figure 3 is largely a consequence of a repeat of the same phenomenon – a realisation by undergraduates that the industry is an unreliable employer. The latest data from the 2016 AusIMM Professional Employment Survey shows that more than half of students and new graduates are looking for employment outside of the industry.

One can confidently predict the same endgame – criticism by the industry that the universities are not producing the graduates it needs just as commodity prices, and thus hiring, pick up. It seems that memories are short. When will we ever learn? Perhaps when senior people stay around long enough to rebuild the corporate memory.

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Short-termism

The average tenure of top-40 mining company CEOs is just over five years, and it is even less for Australian CEOs (Swann Global, 2012). This seems to be short for a business with timelines that stretch over decades. It is certainly short when compared to the time constant for major technical innovation, which is typically around 15 years or more. Short tenures, compounded by the aggressive demands of the investment community, encourage short-term thinking, which is damaging when applied to a company’s technology strategy (if there is one). History shows that different CEOs have substantially different views on the role of technology in a company, which leads to constant change in the company’s approach to the technology portfolio as CEOs come and go. This in turn negatively affects technical innovation, which needs long-term commitment to prosper.

The problems of FIFO

FIFO is here to stay and has many advantages (and some disadvantages) for both companies and employees. However, the nature of the roster system makes it difficult for metallurgists to enjoy the thinking time necessary or the project continuity to facilitate and implement the innovations needed to improve performance, which is their job. There have been many studies of FIFO in terms of social or regional impact, but, as far as I know, none have looked at the impact of FIFO on technical productivity – in metallurgical language: tonnes, recovery, concentrate grade and costs. Perhaps such a study is overdue.

Decay in industry-innovation links

One of the Australian mining industry’s achievements historically has been the strong links that it fostered with other sources of invention and innovation, such as universities and the mining equipment, technology and services (METS) sector (which was the sixth-largest Australian export ‘commodity’ in 2013-14). The modern history began with the establishment of AMIRA in 1959 as a consequence of company CEOs (all of them technical people) understanding that R&D (and innovation) was key to their business. At the same time, Alban Lynch implemented a unique model of graduate training involving Julius Kruttschnitt Mineral Research Centre students doing their thesis research in operations, which meant that the resulting innovation was organic and fit for purpose from the beginning. Others followed his lead. These highly productive links are now under threat, partly because of the loss of staff on sites mentioned previously and partly for other reasons. In fact, it is a national problem. A recent survey put Australia close to the bottom of OECD countries in terms of industry-university collaboration, and the government has established a growth centre, METS Ignited, to facilitate the improvement of industry links with the METS sector. These links need re-energising.

Obsessions with protection of intellectual property

Protecting significant inventions such as the HPGR and the Jameson flotation cell through patenting is essential to promote innovation through commercialisation, and so the management of IP is a legitimate part of the innovation process. However, there is a large body of precompetitive IP that emerges from collaborative R&D projects that is simply not worth the time and money currently put into futile, expensive and time-consuming legal contracts drafted by lawyers claiming to act in the interests of clients on both sides of the innovation divide. These seriously impede the innovation process. The prize goes to those who use such technology the best, not to those who own it.

The limiting effects of professional silos

Finally, there are the well-known professional silos that tend to discourage communication between disciplines, which is a major impediment to innovation in an age when multidisciplinary approaches are so important. Initiatives such as geometallurgy are helping to break down these silos, but there is still some way to go.

The solutions

These problems do not yet constitute a crisis (an over-used word in our society). However, they do represent an undesirable trajectory that, if allowed to continue, will seriously limit our industry’s resilience in the face of the familiar commodity price cycles and our ability to adapt to future changes in business conditions. They are all self-inflicted, and are therefore capable of being solved by the industry itself if the will to do so exists. So here is what we have to do in order to ensure that we can continue to innovate effectively into the future:

  • Cherish the technical experts, preserve the corporate memory and be more discriminating when the need to reduce the size of the labour force arises as part of the business cycle.
  • Mining company boards need to insert a respect for the role of technology and innovation in creating and maintaining shareholder value into their DNA, rather than treating it as an optional extra. Innovation has long timelines, so it would help if CEOs, who set the innovation culture, were in place for longer than has traditionally been the case in mining. This may also have other business advantages.
  • Nurture and, where necessary, re-establish the industry-innovation links. This includes professional development as a necessary rather than a discretionary activity.
  • Formally study the impact of FIFO on innovation (a difficult though not impossible task) and devise improvements. Modified rosters may be part of the solution.
  • Be more relaxed about precompetitive IP and instruct the lawyers accordingly.
  • Encourage the dismantling of the professional silos that impede multidisciplinary innovation. This is the job of both the companies who employ professionals and the universities who train them.

The best chance that these actions have of actually being implemented is if the investment community realises that they are in the long-term interest of shareholders and therefore brings the necessary pressure to bear on boards and CEOs. There is some sign that this may be starting to happen. Chris Dodd, Managing Partner of PwC Australia, drew attention to the problems of shareholder focus on short-term earnings in his AusIMM Bulletin article in February 2016 (Dodd, 2016). While he was talking about the deployment of capital, the same arguments apply to investment in innovation. Paul Muller, Managing Director of Consolidated Minerals, was quoted by the annual VCI ‘Innovation State of Play’ report for 2016 as saying ‘Short-termism is the biggest problem and is more so in difficult times. How do you encourage the ability to think medium to long term? It comes down to quality of leadership’ (VCI, 2016). In addition, the problems of short-termism are now being openly discussed by the business community in general (eg Kitney, 2016; Gluyas, 2016).

The need to foster innovation is now widely accepted. The VCI Innovation State of Play report also described the results of interviews with mining company CEOs, concluding that ‘investor perspectives of mining need to shift from innovation being associated with risk to lack of innovation being associated with risk to sustainable returns. CEOs acknowledged that miners need to better educate investors’ (VCI, 2016). This is the key.

Sir Francis Bacon, the first empiricist and father of the scientific method, said 400 years ago ‘He that will not apply new remedies must expect new evils, for time is the greatest innovator’. We would do well to act on his warning. Better that  we take charge of our own innovation  than have it imposed on us by adverse circumstances.

Acknowledgements

The author thanks the following individuals for useful discussions: Rob Dunne, Neil Jagger, Graeme Jameson, John McGagh, Don McKee, Joe Pease and Neville Plint. The opinions expressed are his own.

References

Australian Bureau of Statistics (ABS), 2015. 5260.0.55.002 – Estimates of Industry Multifactor Productivity, 2014-15 [online]. Available from: www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5260.0.55.0022014-15?OpenDocument

Dodd C, 2016. Is there a boom among the gloom?, AusIMM Bulletin, pp 16–19, February 2016.

Gluyas R, 2016. ANZ chair Gonski: disruption used as an excuse for failure [online], The Weekend Australian, 4 March 2016. Available from: www.theaustralian.com.au/business/financial-services/anz-chair-gonski-disruption-is-used-as-excuse-for-failure/news-story/f11cd7a567630ad125efa660565ed744

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Munro P D and Tilyard P J, 2009. Back to the future – why change doesn’t necessarily mean progress, in Proceedings 10th Mill Operators’ Conference, pp 5–12 (The Australasian Institute of Mining and Metallurgy: Melbourne).

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