Ivan Gustavino says a mining technology investment, or asset, class is now a thing and there are hundreds of millions, perhaps billions, of dollars of private investment being lined up to grow it. That makes the next decade an alluring period for firms like his, Julian Treger’s CoTec Holdings and Ted Feldmann’s Durin Mining Technologies, among many others getting more animated about the future at this year’s major IMARC event in Sydney, Australia.
“It’s quite extraordinary that our sector is almost one of the only ones that hasn’t been really disrupted by technology,” Treger, CEO of Canadian-listed CoTec, said.
“That’s what we’re trying to do now.”
Feldmann, one of the newest faces in the mining-tech space, came to IMARC from Los Angeles in California, where he says he had no trouble recently raising a pre-seed funding round for start-up, Durin Mining Technologies.
“There’s capital that wants to go to mining and not enough good mining technology companies raising in Silicon Valley,” he said.
Atrico head and co-founder Gustavino, by contrast one of the most experienced voices in the global mining-tech arena having spent more than 40 years in and around it, said new large funds in Australia, the US and Saudi Arabia would focus on scaling opportunities in exploration, mining, mineral processing and, increasingly, areas such as waste valorisation and metal recycling, after a relative flood of start-ups in recent years.
Various industry and government-backed start-up funding mechanisms and ecosystems continue to help stock a start-up pool raided regularly in the past five years by mining original equipment manufacturers looking to build technology arms, software and mining services companies with the same strategic intent, and private equity firms.
The scale-up segment funding, though, is mobilising to fill a gap in the sector that’s being magnified by the high volume of new firms entering the space.
“For many years I don’t think anyone considered mining technologies as an investment class,” Gustavino said at IMARC.
“I think that has evolved now and that’s a massive change to see money being considered structurally to go into mining technology.
“A bunch of funds [are raising] large amounts of money that they’re going to be putting to work to affect the industry. I think that’s huge.”
Gustavino said major buyers of mining tech firms, including OEMs, also retained an appetite to consume further targets.
“That appetite will continue to address what mining intends to change, and that is driving a significant structural change in the industry.”
IMARC heard across multiple stages and streams that technology had a crucial role to play in the industry’s urgent efforts to meet ambitious short and longer-term decarbonisation targets, reduce water, environment and capital footprints, and restore positive productivity and safety trends.
Impactful technology will come in a range of forms and meet various resistance points at operations, board and investor levels, the event heard.
There is increasing conviction, though, that the push and pull within and outside the industry has created a tipping point.
“The basic business model, which is 98-99% waste production and a byproduct that you make a profit from … has been around for far too long, so it’s ripe for disruption, especially in a supply constrained world,” said Alan Young, director and co-founder of Canada’s Materials Efficiency Research Group.
Andrew Jessett, senior executive at private fund manager and advisory firm, RCF, said: “If we look at where we’re at as a society in terms of our needs to decarbonise, to mine more critical minerals … I think the pace of disruption in the industry will change and it will accelerate. And I think the appetite of mining operators to adopt a technology and to take a risk on something which may not have been the norm through the last few decades, will change, and we’ll see that accelerate.”
Trent Smith, head of autonomy and operations technology at Thiess, the world’s largest contract mining services company with one of the biggest mobile capital fleets in the industry, agreed.
“We’ve got a significant change coming with decarbonising our fleets,” he said.
“I think the challenge that’s ahead of us is, how do we actually sustain productivity with that substantial change?
“Because it’s going to be a significant challenge to sustain today’s performance in a decarbonised world.
“I think the pace of change with what’s happening with fleet management, automation and decarb is going to get overwhelming for some of us.
“We don’t have the margins that are capable of absorbing productivity losses. We have really got to focus on technologies that deliver operational improvement and reduce our cost base.
“Technology is the pathway to increase productivity fundamentally.”
The nascent global mining technology sector has seen multi-billion-dollar private company valuations and billion-dollar acquisitions in the past four years. There is further mega-deal mining tech M&A currently being mulled.
The only listed $1 billion-plus minerals-focused tech company, Australia’s Imdex, was a prominent name on the IMARC exhibition floor with its BlastDog sub-surface sensor platform on display.
CEO Paul House has said an integrated mining technology and services company with the scale of a major oil and gas, or medical, sector giant, may be within view, but the industry had a mountain to climb and it was only now arriving in the foothills.
“I do think that market space exists [but] we are still at the early stages of our industry understanding how we can use technology to change the way we have done things in the past,” he said.
“I don’t mean individual areas where we adopt innovative solutions or new technologies in a silo or in a segment, but how we apply technology more broadly in the way we think about larger-scale mining processes that run through whole organisations.
“I think that kind of opportunity is only just starting to emerge.
“You can hear a number of innovative resource houses starting to be aware that actually some of the changes they’re looking to achieve are going to need some of that larger thinking, or that larger-scale thought.
“That’s pretty exciting. But there’s no doubt we’re at the early stages.”
Collaboration and partnering were words that were as ubiquitous as any at this year’s IMARC.
House said the value that could be unlocked from closer alignment of different groups’ core competencies – both in mining and in the emergent mining-tech universe – was enormous. Again, he said, precedents existed in oil and gas, agriculture, medical healthcare and other sectors.
Investments in tech companies by large mining OEMs signalled a step along this path.
“To the extent that they’re illuminating data inside their [current] workflows, it’s enormously valuable,” House said.
“To the extent that they think they can then extract value from someone else’s processes, they run into conflict and resistance.
“And so what does an adult conversation look like? Here’s my competence, here’s your competence; one plus one should equal three. Can we do that together?
“I think the next barrier to unlocking those multi-billion-dollar-type mining tech or sensor led opportunities, or companies, is going to be solving that riddle.”
Disruption without interruption
It’s not the only collaboration conundrum in front of the industry and its key suppliers.
Karl Malitz, Rio Tinto open innovation manager, said successful system-level disruption of the industry’s benchmark operations without interrupting the momentum of often “hugely productive assets” was “very challenging, and I don’t think anyone would say that they’ve cracked it”.
Malitz said: “You’re running at a 10-out-of-10 most days but you want to interface and integrate new technologies to make it better. So there’s this other piece of the puzzle which is, how do you innovate and collaborate whilst trying to systematically change an entire system all at once without dropping tonnes?
“The vehicle manufacturing sector does this. They integrate new robotics and new machines as they develop out new work streams and delivery systems. They improve on that all at once.”
IMARC 2024 heard that investors were keeping an eye on truly disruptive technologies coming in at the front and back ends of mining value chains – exploration and waste reprocessing – as well as those that can move the proverbial needle at existing operations.
Rob Adamson, executive chair at RFC Ambrian, said: “The things that interest us are the things that make a big difference and you can [deploy them] without disrupting operations. So if it’s a sensor around a conveyor belt, we can put that on in eight hours on a conveyor shutdown. And then you see whether it works.
“So minimal disruption things that make a big difference.
“For the orebodies that sort well … using magnetic resonance analysis for rapid grade detection on a conveyor belt [can] move you about a quartile down the cost curve.
“But it will also mean a third less water, a third less reagents. It has a huge environmental impact.”
Treger said a race for strategic minerals and metals was already moving beyond primary production to reprocessing of vast quantities of legacy mine waste and emerging recycling, or urban mining, opportunities. Notwithstanding current regulatory barriers to the former, both had compelling prospects.
“If you speak to governments all over the world they are increasingly interested in the circular economy and I think in the future our descendants will look at the way in which we used to leave these valuable materials in the ground and not really do anything with them and think that we’re crazy,” Treger said.
“When we look at technologies – we’ve looked at over 300 and we’ve invested in four that we’ve announced publicly and another two that we’re in the process of negotiating – we have ended up really focused on process technologies because whilst it’s very sexy to take the things that Silicon Valley does and bring them to our sector, like AI and big data and sensors and green trucks, our view is that those things make marginal improvements.
“Those are important as well, but the things that we are looking for are really category killers.
“Why isn’t there an … eBay of mining? eBay was a technology, a software algorithm, but then it somehow managed to monetise all the old bits and pieces that people had in their cupboards. Which in this metaphor would be [mine] waste tailings.
“I think we’re in a different era than what we saw in the last century. In the last century it was all about economies of scale, the biggest deposits and how much money you could spend to get your cost down.
“The technologies that we’re seeing have a commonality in that they’re modular, they’re much lower cost, they are low carbon products, and therefore they have now the economies of flexibility.
“We would like to have at the end of the decade 20 or 30 tailings retreatment facilities around the world as an example of how the commodity extraction sector can reinvent itself using technology in a low carbon way in this new era.”
