The unbundling of mining and how to prepare for it

If there is one thing the past decade has taught us, it is that the disruption of conventional industries is real. It all started with the media industry, when online publications were attracting more and more readers. Other industries have followed, most notably retail (Amazon), the hotel industry (AirBnB) and personal transportation (Uber). Other industries such as manufacturing, finance, construction and of course mining are taking a little longer to be disrupted, or as often called, unbundled.

The great unbundling

"But wait," you say, "The mining industry is different. The barriers of entry are prohibitive and most people don't have the required expert knowledge or care about it." I am sure the automotive industry thought the same way, and by now it is clear that Tesla, Google and Uber will play a critical role in the future of the sector. Simply have a look at the many companies targeting various segments within the automotive market. The same goes for banking or logistics.

A detailed look at the many specialised startups targeting every aspect of FedEx’s core business

One of the main differences in the mining industry is its lack of interactions with the public and therefore the lack of awareness amongst the community of global innovators. The industry has for a long time focused on continuous improvement through alterations, but as we have seen above it sometimes takes a fresh pair of eyes (or many) to come up with truly innovative solutions. As more quality data is generated within an industry, the requirement for expert knowledge to make critical decisions is reduced. Mining companies are increasingly looking to unlock the value of data and information they generate and open-sourcing and crowd-sourcing have proven to be a powerful tools. Today, data scientists or aerospace engineers can outperform geologists in their key tasks. This TechCrunch article rightly notes that every company these days is a tech company, as no company can afford to ignore the insights and possibilities technology offers to them.

Learn from the past

So what can we learn from the change we have seen in other industries? One thing is certain, change can only be ignored for so long. The longer you do, the harder it will hit you. Looking failures and successes from the past, we can learn how to deal with and even embrace change. For example, General Electrics is going through a huge transformation, marked by the launch of its first new business unit in 75 years and a company wide focus on digital transformation. Rather than fighting outside or open source innovation, they actively participate in it through corporate venture capital investments and hackathon events, allowing them to be at the forefront of change and scan the market for new technologies. Interestingly, it was a mining company that showed the way to access the power of the crowd. The GoldCorp challenge in 2000 was one of the first global open innovation competitions and transformed the company from a struggling miner to one of the world's largest gold producers. The mining industry looked at the results in awe, but then nothing similar happened for over a decade.

A sustainable framework for open innovation

Participants at the Unearthed Perth Hackathon with BHP Billiton

Applying those learnings, Unearthed was founded in Perth, Australia in 2014 to bring a sustainable way for open innovation to the resources industry. Since then, Unearthed has launched an accelerator program, generated over 150 prototype solutions and engaged with over 2000 innovators together with industry partners such as BHP Billiton, Rio Tinto, Newcrest Mining, Anglo American, Woodside Energy, Caterpillar, and many more. By opening up carefully selected and prepared industry challenges to outside innovators and entrepreneurs, creative and technically minded specialists from all backgrounds and industries are invited to develop solutions to long standing problems in the resources sector. The best solutions and teams are selected and encouraged to form startups to bring their ideas to market. One of those startups is Newton Labs, who emerged from the inaugural hackathon in Perth and who have since patented their technology and are currently engaged in site trials with a major mining company. This represents a low risk opportunity for resource companies to trial new technologies and partner with successful startups. For 2017, Unearthed is looking for partnerships with innovative miners and suppliers to grow the open innovation program with events in Toronto, Vancouver, Denver, Houston and Santiago in addition to established events in Australia and South Africa.

Future trends in mining

Breakdown of over 50 resource related innovation challenges

With over 50 individual challenges already addressed at Unearthed hackathons, we get a snapshot of where the the mining industries' biggest struggles lie. 33% of all problems presented were big data and machine learning related, most commonly around process optimisation. Web and mobile applications came in second, often with a focus on automation or data visualisation. Other topics such as IoT, image recognition and augmented reality will also see growing importance when working towards the mine of the future. All past competitions, challenges and solutions can be viewed on the Unearthed innovation portal.