Orica CEO Sanjeev Gandhi has spoken about technological change that continues to “reshape our industry’s landscape” and about a major mining consumables producer “building a market that didn’t exist five years ago”. Markets for some of Orica’s technology and tech combinations are still forming but its licence to pursue them is very much in hand.
As it is for a number of other major suppliers of mining equipment, technology and services (METS) which have activated and expanded digitalisation, automation and electrification strategies over the past decade.
Relatively large-scale merger and acquisition (M&A) activity has become a feature of this landscape, with Orica among the big buyers of mining tech firms. One hundred and fifty years after its formation on the Victorian goldfields in Australia, Orica has formed a circa-US$200 million-a-year digital arm pretty much in the blink of an eye to complement its traditional mine explosives and specialty chemical businesses. US investment bank Morgan Stanley says the series of acquisitions that helped form Orica Digital Solutions came at higher multiples and with the promise of higher growth. “We note that consensus expectations look for revenue CAGR of 13% and EBIT CAGR of 18% between FY24 and FY28. Growth in this business is important as we see it justifying a higher multiple going forward as it increases in importance.”
Gandhi wants to increase this year’s circa-20% EBIT contribution of Orica’s non-blasting activities to maybe 50% in the “mid-term”. He describes it as an aspiration rather than a target but says technology growth, in particular, is a worthy pursuit because the “business is growing faster than our core blasting business, it’s obviously higher margins … [and] it’s low capital”. In 2021, when Gandhi became Orica’s CEO, more than 90% of its business came from explosives supply.
London-listed Weir Group, a 155-year-old Scottish manufacturer, has meanwhile punted about one-tenth of its market value – US$800 million – on an Australian mining software firm, Micromine, turning over about $90 million a year but said to be growing fast. In 2021 it forked out $200 million for Vancouver-based Motion Metrics amid wider traditional mining supplier tech-focused M&A activity.
More than US$7.5 billion has been outlaid since 2020 by a host of aggressive mining/metals tech buyers – Epiroc, Sandvik, Komatsu, Hitachi Construction Equipment, Constellation Software, Bentley Systems, Hexagon, Orica, Imdex, et al – looking to cast themselves as key actors in a looming transformational era for mining and metals.
“Historic underinvestment into the mining sector, combined with a paradigm shift in demand driven by the energy transition, AI data centres and the permanent need for metals to support manufacturing and industrialisation across the globe are forcing the mining industry, like all corners of the economy, to transform,” says RCF Innovation head, Andrew Jessett.
McKinsey says a staggering $5.4 trillion needs to be spent between 2024 and 2030 so miners can position themselves to meet future demand for critical and other minerals. Senior partner Richard Sellschop said at the IMARC 2024 event in Sydney technology would be crucial to the industry’s attempts to meet new productivity and sustainability imperatives. “New mining technologies can provide the necessary productivity gains to meet capital demand,” he said.
Hexagon’s mining business executive vice president Dave Goddard says the company expects the size of the METS sector “to a little bit more than double over the next 10 years”. Hexagon has what it sees as a proprietary view of the current size of the sector but the world’s top 20 mining equipment manufacturers sold $66 billion worth of machines and services last year; 30 top contract mining and drilling companies generated $23.3 billion of revenue; and the 50 leading mining software, sensor, automation and communication technology suppliers sold about $5.9 billion of products into the industry in 2024.
“It’s primarily analytics and automation that is going to drive the increase,” Goddard says.
Canada’s Constellation Software, which has bought more than 30 mining software and tech companies since 2011, said in its latest annual report total global software spend could grow to $1.2 trillion in 2025. John Bailey, CEO of the group’s mining flagbearer, Datamine, said miners were probably spending more than one billion dollars a year on software.
“Our view is mining customers will continue to expand their spend on mining technology at double digit growth rates,” he says.
Hexagon, Constellation, Bentley Systems and Sandvik have all seen significant growth in mining software and other businesses they’ve acquired in the past five years. The latter two outlaid more than $1.65 billion on New Zealand and Australian software businesses, respectively. While the price paid by Weir has been questioned by Orica’s Gandhi and others, Goddard says supplying technology that can connect mining workflows and enable seamless analytics is valuable and will only become more valuable.
“If you can unlock an additional one per cent recovery in an average copper concentrator that’s a significant amount of revenue,” he says. “You can imagine what an additional 1% recovery is worth in a gold mine that produces a million ounces. These are mind boggling numbers.
“What you really want to do is you want to have that mill be able to provide a prescription back through the load and haul cycle, back through the crusher, back through the drill and blast, even back to the very block model that you have developed, and say, this is the material that I want starting on a certain date and I need this material for three days; something like that.
“Applying that production wheel methodology to mining I think is going to unlock a huge amount of value.
“And being able to take the information that you’re getting from all the different sensors that mining companies now have … as you touch the material downstream, and being able to update that geological model in real time if it doesn’t match the attributes of the geological model, in order to optimise the subsequent downstream processes – that’s going to be massive as well.
“The richer the attribute set on that geological model the better the downstream processes are going to perform.
“At the end of the day it’s a value equation. If you can offer a product to a customer that they are going to be able to use to generate a very large amount of value then the pricing for that company is going to be commensurate with that.
“So what you see is a lot of players are acquiring companies because they want to compete in that world. The only way to do that is to have access to those data streams because relying on the mining industry to come up with standards for data sharing, while it’ll happen eventually, it’s probably not a good strategy for growth.”
Weir CEO Jon Stanton has described as compelling the “long-term value creation opportunity” from fully integrating capital equipment, sensors and software and “products and processes in a mine”. He said in Riyadh, Saudi Arabia, at the Future Minerals Forum earlier this year: “The mining industry needs to scale up and clean up. It needs to scale up to deliver the copper, the battery metals and the resources that are going to be required to enable the energy transition. But it also needs to clean up; use less energy, use less water, be less impactful on communities, on biodiversity and so on. All of that clean-up piece is going to require innovation, technology, engineering, to problem solve and create the solutions that are necessary for the industry to deliver.
“What are the challenges? We all know the industry is traditionally very conservative in the adoption of new technologies. [But] we’re now moving into a different world and I really detect that our customers are reaching out for help because they know that it is a burning platform.”
Leading mining tech advisory firm Atrico does not see competition for acquisitions subsiding any time soon, with a high number of suitors still active and the number of strategic targets lower than it was five years ago. In early 2025, Weir’s plus-A$1 billion Micromine acquisition followed Wabtec’s US$1.78 billion purchase of Evident Scientific Inspection Technologies, expanding its rail and mine asset maintenance technology portfolio and adding Evident’s (former Olympus) handheld material scanner business to what it calls its Digital Mine offering.
Wabtec CEO Rafael Santana said the deal would help accelerate the US company’s penetration into “high-growth industrial markets” and add to digital group orders that ended 2024 at $1 billion for the first time. Chief technology officer Eric Gebhardt said: “On the mining side, Inspection Technologies’ non-destructive testing solutions combined with our digital intelligence business and industry expertise can make inspections of various mining equipment faster and more accurate, enabling our customers to run their mining operations more efficiently.”
Atrico director Jason Price said the firm believed consolidation of tech-enabled service providers, pure tech companies and traditional OEMs would continue and “become stronger” over the next five years. “We predict at least two or three multi-billion-dollar deals in this five-year window.”
Advising companies on tech development and acquisitions, Atrico saw automation of mineral production value chains as the key driver of M&A across the mining and metals tech landscape a decade ago. Large, integrated engineering, manufacturing and technology firms, such as ABB, Schneider Electric and Siemens, were central in that world view.
“Old themes are still going on,” Price says. “Companies are still consolidating automation stacks. AI has come to greater prominence. We had machine learning a decade ago. Now LLMs are becoming a layer of the technology stack.
“Electrification of global energy and transport systems is driving new demand for minerals and massive investment.
“Underlying all of it, though, we have geopolitics and the push for new, secure, vertically integrated mineral and metal supply chains.”
China has over 25 years established its dominance of most critical mineral supply chains and also now has an expanding mining equipment and technology supply base that will help improve its future competitive standing. It has been the industry’s major disruptor and now others are playing catch-up.
“Everybody’s woken up to the geopolitical factors being really important,” Price says.
“Interestingly, geopolitical polarisation was one of the scenarios we ran with a global METS client 10 years ago to inform strategic planning. There was a pandemic black swan in there as well.
“Will there be a driver for each nascent [trade] bloc to ensure it has a secure mining tech stack to help secure its mineral supply chain? That could depend on how strong the geopolitical drivers become. It would be wise, though, for strategic investors to consider how that might affect the landscape, create or impair value and create hurdles for foreign investment decisions. It’s also likely to be self-fulfilling once it starts influencing strategic decision-making by active funds driving transaction strategies and by more passive funders taking a risk-based view.”
Beyond mining’s broadly increasing appetite for sub-surface and process insight, and for the efficiencies and predictability automation can bring, technology uptake levels are going to be tied to mine production volumes that will in turn be modulated by the expansion rate of new-energy mineral supply versus the decline of old, such as thermal coal and oil sands, and by the ability of new mineral demand from India, the Middle East and the US to offset softer demand from China.
Between 2022–2050, says London think tank The Energy Transitions Commission, the global energy transition could require production of 6.5 billion tonnes of end-use materials, 95% of which would be steel, copper and aluminium. And then much smaller quantities of critical minerals and materials such as lithium, cobalt, graphite and rare earths. ETC says this cumulative material extraction compares with the more than 8 billion tonnes of coal currently extracted annually.
“I think we’re going to see some supply chain readjustments over the next five years as we come to terms with what the new geopolitical landscape looks like,” says Hexagon’s Goddard. “At the same time, from our business standpoint, we’re all about optimal material movement and we’re all about keeping large numbers of people safe on those mine sites. So rare earths and so forth are going to be an attractive market for us but they’re going to be a very small part of our business.”
Gandhi says China’s economic slowdown has been well documented but India is on the rise with real GDP forecast to grow by an average 6.4% a year to 2032. “That’s the upside to the downside in China,” he says.
“India is one big construction site. It’s just mind boggling. The amount of construction, infrastructure, manufacturing, and the amount of steel and iron ore and met coal they need, and also thermal coal. The steel demand in India is going to grow double-digit for the foreseeable future, which is at least a decade of investments, because India needs desperately that infrastructure.”
Gandhi says, on balance, the US market is “interesting, attractive … run down”.
“Infrastructure in the US is long, long overdue for investment. All of those announcements by the past administration – the IRA, the CHIPS Act, the Infrastructure Act – [pledged] maybe close to a trillion dollars which was supposed to be invested into the US economy. It never happened.
“So now we’re waiting for the taps to be opened up. It has to come. Something has to give because the infrastructure there is falling apart. It’s a bit sad to see.”
Orica’s boss says the company’s non-mining markets offer significant growth potential for its expanded range of digital products, but the sleeping giant that is the mining technology market should not be underestimated.
“Civil is a massive opportunity for us but the mining industry is a huge, huge opportunity for us to grow,” he says.
“I always joke with [Orica Digital Solutions president Angus Melbourne] and the team that we don’t compete with competitors we compete with the customer because they have these archaic systems from 20 or 30 years back and we have to go and prove to each and every one of them that we are better.
“It’s a very conservative industry and there’s trials and trials and then they have to go through a tender process even though there’s nobody else offering [the product]. And then we start to see the scale coming in.
“Today we talk about EBS [electronic blasting system] as if it’s just there. It took us 25 years to scale up EBS to where we are. Twenty-five years. It’s a no brainer technology [but] it took us 25 years to convince customers this is the right thing to do.
“We are launching on average two [or] 2.5 new solutions in the digital business a month – per month – because all you have to do is take one product, take another, put it together, go to a mine site and ask them, what are your two top problems? And come up with a value proposition.
“If you talk to any [mining] customer, they have three major challenges. One is cost. Cost to commission a mine, cost to invest in a green field or brownfield resource, cost of operations: it has gone through the roof, as it has for us, as it has for anybody who operates in this environment. So that’s their number one challenge.
“Number two challenge is productivity. Every miner we speak to is behind their mine plan and that translates into high commodity prices. There is just not enough supply. There’s a lack of exploration. So it’s a perfect storm, in terms of commodity prices [staying] higher for longer. And this means there’s an appetite to pay us more for productivity and taking cost out.
“And the third [challenge] is clearly ESG, whether it’s end of mine, whether it’s vibration, whether it’s dust, whether it’s hurting people; it’s obviously top of mind.
“We’ve got a solution for every problem that a miner may have and some that they don’t even know they have.
“It’s quite amazing what we have today. But it doesn’t come for free. We are very proudly asking for the right value and not everybody is willing to pay and some think they’ve got better solutions. We wish them luck and we go on to the next one.
“We are building an industry and a market that didn’t exist five years back. The potential is massive.”
