Stars align for 40yr-old mining software business

Top image :
Dylan Webb (standing right) at a Datamine meeting in Brisbane, Australia.
Datamine positioned for growth as technology adoption accelerates

The 40-year-old business that kicked off Toronto-listed Constellation Software’s turn into mining and metals in 2015 is flourishing as part of a highly acquisitive “pure software” enterprise that has “supercharged our R&D capacity and capability”, according to CEO Dylan Webb.

Webb, a mining engineer who started working at BHP’s Olympic Dam polymetallic operation in South Australia in 1996, has spent most of his career in the mining software arena. That includes about eight years with the venerable mining software vendor, Datamine, which marked 40 years in business in 2021.

The past five years have been its most successful, despite mixed fortunes in the global mining technology market.

Canadian simulation and modelling leader CAE started a bit of a run on mining software firms when it bought Datamine in 2010, ahead of deals involving the likes of Gemcom, Mintec and others.

Webb, who became director of CAE’s mining technology arm after nearly eight years running South African-based Gijima’s subsidiary in Australia, was going to build on the Datamine acquisition at CAE through both organic and corporate moves. It’s fair to say others were more energetic, and focused, and mining spending also hit a wall during the period.

Webb says the mid-2015 acquisition of Datamine by Constellation, which did more than US$1.5 billion of M&A and turned over circa-US$5.1 billion last year, was “a pivotal moment in the history of Datamine”.

“Unlike private equity, Constellation holds its businesses forever, which allows us to take a long-term view on future investments in new products and complementary acquisitions,” he told InvestMETS.

“Being a pure software company, the expertise we can draw upon in the broader group has supercharged our R&D capacity and capability.

“We have large groups of developers within the broader company that work as outsource development houses. We use them a lot, especially for things like mobile technology and cloud expertise. We tap into some internal groups with hundreds of developers; [we’ve] got two main groups in Romania and another one in Pakistan. That expertise is really the main thing. But also the ability to scale up and down our teams using those groups.

“All up we’ve got access to probably around 800-to-1000 developers for projects that we have.”

Constellation, through its Vela Software unit, has added other quality mining-exposed software (and most recently advisory) businesses, including acQuire, Minemax, Centric Mining Systems, GeoMineSoft (GMS), Flairbase and Snowden.

Webb says Datamine’s headcount has grown from 135 to more than 700 in the past five years and “we expect to continue solid double-digit growth and to see the staff numbers moving beyond 1000 in the next couple of years”.

Datamine’s financials are not visible within Constellation, but a standard B2B technology/software revenue-per-head metric of about US$200,000 makes it a cUS$140 million business heading towards $200m.

“We continue to invest and grow in our areas of historical strength: exploration, resource modelling and mine planning,” Webb says.

“There was also a lot of demand [in 2021] for production-oriented technologies like Ore Controller, MineMarket and Reconcilor driven by the digital transformation objectives of our customers.

“Looking forward, we are very committed to providing a leading range of technology to help our customers achieve their ESG goals.

“There is no question that there has been a rapid and permanent change to industry attitudes to ESG, driven by all stakeholder groups from investors to community and employees alike. It has been encouraging to see mining companies respond positively by incorporating ESG into new organisation structures and decision-making processes.

“Datamine sees a huge role for technology to enable best practice improvements across the ESG spectrum, and we established a dedicated business unit for mining ESG in late 2021. The acquisitions of the Zyght HSE solution and Qmed occupational health system are the cornerstone of this new unit, and we will be making investments in MineMarket to provide carbon emissions tracking within its existing inventory management framework that is already widely used in the industry.

“As a student and graduate engineer in the mid-1990s, I can remember working in environmental departments running about with dust and water monitors, scribbling results into a note pad and typing them into a spreadsheet back in the office. Under-resourced departments that focused on cost minimisation and compliance were commonplace.

“It is exciting to see the industry moving from a compliance to a best practice mindset.”

Webb says fresh, strong interest in mining technology from different types of investors underlines increasing confidence in the value new and emerging products can bring end users, and is also a harbinger of a changing future for the industry.

“The desire for better solutions for short interval control and real-time operations [for example] brings about an interface with machines that blurs the lines between the traditionally separate domains of mining equipment and mining software suppliers,” he says.

“In the future we will see more hardware and software combinations in mining technology.

“End customers will need these to be OEM agnostic, so there is plenty of opportunity for a variety of solutions from in-house innovation, start-ups, software companies and OEMs themselves.

“We have seen some interesting innovation from start-ups in the application of sensors for mining. There is a big opportunity to deliver robust sensors that work across fixed and mobile equipment from a variety of OEMs, supplemented by AI analytical capability.  Datamine recently entered a partnership to distribute Lab3’s SensorMine solution after being impressed by their work in this field.

“Start-ups play a key role driving innovation, along with researchers, internal R&D by mining companies and by technology providers like Datamine. We actively work with all these sources of innovation to incorporate advancements into existing business processes for our customers. We have noticed that many start-ups get stuck at the 10-to-30 customer stage as they struggle to move beyond a point solution or to invest the time and capital to expand into new geographical markets.  Customers are increasingly multi-national and expect global delivery capability from their suppliers, along with a broad offering beyond a specific niche. These customer needs are a big driver of the consolidation we’ve seen in mining technology providers in the last decade.

“Emerging interest from PE investors in the mining technology segment is a result of its evolution from localised niche players into significant scale businesses with large, international customer bases. As consolidation opportunities dry up it is likely these groups will retreat from the mining technology space.”

Webb says picking three standout areas of mining technology advances is not easy, but sensors are one “exciting area of development, with the ability to access more and more useful data in real time, analyse it quickly and improve decision quality”.

“Mobile applications for field work are still early on the curve with many potential use cases still to be addressed. We are frequently exploring opportunities to supplement existing software solutions with mobile add-ons that make it easier to collect information at the source and to facilitate reviews and approvals on the go.

“An example is our Discover Mobile app that allows you to take subsets of GIS data from ArcGIS Pro or MapInfo into the field for exploration work, guiding sample collection with GPS and capturing observations in real time. We recently released a mobile field app for drill-hole logging, and have projects underway for mobile extensions to our SIMS production management and CCLAS laboratory solutions.

“Cloud processing has been available for a while and we are starting to finally see significant adoption of this capability by mining companies.

“The ability to run many simulations is a game-changer for understanding risk, whether it be a geological statistical process, pit optimisation or plant simulation. We can now run exponentially more scenarios and use AI to refine input parameters based on past history.”

Webb says geography is “becoming increasingly irrelevant” when it comes to the source of innovation or location of creative people motivated to solve problems.

“It’s fantastic that the last decade has seen a democratisation of access to computing power and education,” he says.

“When it comes to the adoption of new technology, the three stand-out regions are South America, Africa and Russia.

“We see lots of activity in these markets for significant projects driving step changes in the adoption of technology across mining operations.

“An example is a project we are currently working on in Africa to deliver real-time remote access to data and analytics from five separate mining operations. Improving communications infrastructure and availability of mining intelligence tools like our Centric solution are making this possible.”


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