Your work is focused on innovation in mining. What does innovation look like to you?
Innovation for CEMI is making a significant step-change in performance – doubling or tripling the outcome of an activity or reducing the cost of it to half or a third – or some combination of cost and performance. Not that we are always successful, but this is our target because smaller improvements have no significant impact on NPV. We are not focused on technologies, we aim to address business problems usually by using new techniques or technologies, often in concert. Business targets are getting to production and first revenue sooner, reducing the up-front capital cost and reducing operating cost – in this order, since this their relative impact on NPV, but they all involve trade-offs to be best result.
What are some of the main challenges facing Canadian miners today?
The single most important challenge to the mining industry is how it will meet the dramatic increase in demand for the metals needed to achieve the Green Transition to a low-carbon economy. This will depend on how the industry meets the challenges of improving productivity and social-environmental impacts. Productivity had been declining for well over a decade now because the current technology platform was implemented almost 40 years ago with little change since.
Mines are getting older, deeper, hotter, and more expensive to operate every day and if they continue with the same approach these operations eventually become unprofitable. Forty years ago, all household waste went to a landfill and all mine tailings went to one large tailings pond. Today, households, and most industrial sectors, sort and divert their waste as paper, plastic, glass, and metal – and mine tailings still goes to a single pond. Local communities and the public at large no longer support this approach.
The evidence points to an increased time taken to get social license to operate, effectively eroding NPV. A slightly higher cost for a tailings disposal approach that is readily acceptable to the local community and has ore production starting some five years sooner has a significant impact on NPV and is an easy trade-off to make.
How do you think Canadian or TSX-listed companies are doing with regards to innovation and sustainability?
It is important to make a distinction between reactive, tactical innovation that companies do to improve operational problems and proactive, strategic innovation that is not related to the operational problems of today. Strategic innovation drives operational change, it is not driven by it. It is the lack of strategic innovation in the mining industry over the last 20 years that is the cause of the industry’s chronic productivity decline and the continued deterioration of public perception of the industry.
Mining companies and investors alike are focused on sustainability in mining. What are your suggestions on how to make the industry more sustainable and environmentally conscious?
Unfortunately, I have no suggestions on how companies should become more sustainable and environmentally conscious – as long as their investors continue to support their current unsustainable practices. CEMI’s role is to help develop the techniques that will make it possible for them to achieve these highly desirable outcomes, and we work with multiple SMEs in the mine service sector to create the solutions that can achieve them. The best we can do is to remove the excuse that the solutions the industry needs are not available.
The industry and its investors have failed to invest in the kind of strategic innovations capable of significantly improving its future business performance. In the end it is only mining investors that will decide when the companies they support adopt a more productive and more progressive approach to the future of their business. The transition to a low-carbon economy depends on electric vehicles but these require five-times-more copper and nickel that gas/diesel vehicles. The mining industry will not have the capacity to meet this demand by 2035 unless it radically increases the scale of investment in exploration and innovation – E&I Investments are key to future success.
Society can only transition from a carbon economy to an electric economy with a lot more of the metals that generate, move and store electricity
Canada is currently making a big push to strengthen their critical minerals supply chain. Can you dive more into what is happening and what the mining industry needs to continue on this trajectory?
The Canadian budget was very important for the mining sector, nationally and globally. The Canadian government has recognized the potential for the development of the critical mineral deposits in Canada to provide a secure supply to the North American auto manufacturing industry.
There are many SMEs and small exploration companies across Canada that have spent years creating projects that can meet this demand if the investments in these field are focused and expedited. But speed is important in this arena – major car companies have to secure their critical mineral supply chains in less than 5-10 years, so rapid progress is essential if Canada is to fulfill its potential.
Fortunately, the government has also announced funding for a broader range innovation across the economy, focused on impacting climate change. Again, the mining sector is critically important – society can only transition from a carbon economy to an electric economy with a lot more of the metals that generate, move and store electricity. In this sense metals of all kinds are “critical” to the future, especially copper and nickel. Again, the SMEs in Canada’s innovation ecosystem are poised to expand rapidly if they receive the level of investment they need to demonstrate their solutions and grow quickly in a highly competitive global market.
How does public perception play into this?
The greatest single delay in opening new mines is caused by the public’s lack of confidence in the industry’s current approach to mine tailings management. The risks to human heath, safety, and the environment are related to containment of many millions of tonnes of hazardous tailings waste – continuing with this approach is politically and financially unsustainable.
Recent tailings dam failures have attracted a lot of attention, but the greater and more chronic problem comes from the hazardous dust that escapes from mine sites. Storage of these materials in temporary facilities over hundreds of years is no longer viable and persisting with these practices has done irreparable damage to the industry’s credibility. Again, the SMEs in Canada’s innovation ecosystem have been working on solving these problems for years and new techniques for processing mine tailings in a way that can eliminate the need for long-term storage have already been developed.
Government investment is now available for operational trials that are needed to demonstrate the effectiveness of these new techniques but the participation of visionary leadership in mining companies and investors is essential. Implementing new solutions is the only way the industry can convince the public that the impact of an expanding mining industry will be different from the past.
What has CEMI’s role been in making the mining industry more productive and sustainable?
Over the last 15 years CEMI has been supporting innovative SMEs to develop the solutions mining needs to address the productivity and ESG issues that prevent mining companies from expanding to meet the needs of the Green Transition to a low carbon-economy and confront the challenge of climate change.
We have been very successful in helping to create many of the solutions that are needed, both in Canada and globally. CEMI’s recent Federal funding for the Mining Innovation and Commercialization Accelerator (MICA) Network, will allow us to help more SMEs to expand their businesses and we are looking for solutions in other industrial sectors that can also be used to accelerate the pace of change in the mining industry, in Canada and around the world. We are fortunate to have a federal government that recognizes the importance of industrial innovation to help build the economy of the future and accelerate the reduction of GHG in the atmosphere as the first step in arresting climate change.
More mining is essential if we are to reverse climate change and CEMI’s objective has been to support the innovation that will help create a more productive, progressive, and profitable mining industry that is capable of meeting all the demands of the future. Mining must meet the increasing demand for metals at a price that can defeat carbon, with social environmental practices that synergize with agriculture and forestry and so lead the way to a sustainable future for both urban and rural communities alike.