From our experience over the past few years, there appears to an increased sense among the community to question why they need to be involved in collaborative technology development or technology demonstration versus the default position of the mining industry in general of “going it alone”. Below are a few thoughts to counter this sentiment.
1. Competitive Advantage
It has been suggested by some that going solo and “locking up” a supplier will provide a distinct competitive advantage. This suggests that the various mining companies are competing against each other on some metric. The reality is that many mining companies are moving down the same pathway with typically multiple vendors for new technology projects over the next 3-5 years. In our continuous underground mining consortium for example, that is focussed on mechanical cutting, there are multiple vendors, multiple technologies applicable to many mining companies and mine sites. Thus, the reality is that a single supplier may get locked down but with a line-up of multiple vendors ready to go, any competitive advantage will be short lived, if at all. Vendors are interested in building market share and want to have as many mining companies as possible adopt technology versus working with a single mining company and possibly a single asset.
Further, the actual capabilities and limitations of many technologies vary and there are no “swiss army knives” for all applications. Rather, they are systems of tools that need to work together and will require several OEM’s to participate in the solution for any one mine.
A major challenge with new technology on a mine site, mechanical cutting is only one great example, is that the time from issuing a PO and “signing the cheque” to actual delivery is years. In mechanical cutting for example, 3 years is a good estimate.
A significant advantage of working as a group with multiple vendors is the opportunity to influence this timeline and reduce it by as much as 67%. (ie 2 years). A unified voice and a pipeline of significant projects will drive behaviour much faster than a single company locking down the technology. Accordingly, a consortium can drive the speed of innovation and product development if we work collectively.
For example, a vendor relevant to one of CMIC’s consortia has requested that the industry, through CMIC, identify the key basic parameters that are common for a technology amongst consortium members so they could design and build a platform versus a one-off machine per site. This serves 2 distinct advantages, the first is time. One OEM has stated this could cut a 3-year time line down to 2 years. Secondly, platform technologies require less customization and are therefore inherently less expensive.
In a consortium we are able to present a pipeline of potential projects across multiple companies providing incentive and competitive advantage for the OEM(s) to work with CMIC. By doing so we not only guarantee work but have less competition for a limited number of technologies. In other words, you become the buyer of choice.
A multiple company and asset pipeline will guarantee success whereas a single company and single mine site trial will have a higher risk of failure.
3. Faster, Cheaper, Better Integration vs High Risk
The majority of effort and risk of failure does not rest with the capabilities of the technology but rather how it is integrated into the mining process. As with any new technology, that is essentially a prototype, there will be many challenges that will threaten the success of its implementation. A collaborative approach provides a platform for multiple companies to share and discuss challenges and potential solutions. Anecdotally, this open innovation approach provides for a 10-fold reduction in time and cost. The competitive advantage will be derived from the speed of adoption of the technology across the company vs at a single asset.
4. Embrace the Evidence
Every Industry on the planet from automotive manufacturers (including Tesla), software and hardware giants such as Microsoft, IBM, Cisco, Nokia, Ericsson, manufacturing (eg Proctor and Gamble), aerospace (eg Boeing, Lockheed Martin) and pharma (eg Eli Lilly) embrace open innovation with their competitors and have been for a few decades. Evidence across multiple industries clearly demonstrates that those who lock down technology get comfortable and become irrelevant very quickly.
If the mining industry truly wants to innovate then open innovation with their peers is not a question but rather an imperative.
5. Intellectual Property
OEM’s will raise concerns about multiple mining companies sharing the implementation of technology. In the simplest terms, there are 2 streams of IP. The background technology IP related to the actual physical technology is protected and owned by the OEM’s. More importantly, the process IP related to deploying the technology(ies) in a mine is owned by the mining company and this is the IP we are interested in sharing and co-developing.
The risk faced by going alone is the OEM will insist on ownership of the process IP, or some portion thereof. The results of going it alone are evident in the ownership of data, a form of IP, from vehicles purchased by mining companies.