#026 Thoughts on Innovation in the Mining Industry | Elaine Hattingh & Sandiso Sibisi

Elaine Hattingh, guest · [03:37]Yeah, so I agree with Sandiso. The short answer is yes. But I also think it's important just to clarify what we mean with the word innovation, because I find that a lot of times we use the word invention and innovation interchangeably, and they're definitely not synonyms, right? So invention is a creation of something completely new. So that's the invention of electricity, light bulbs, the telephone. But innovation is about the practical application of this technology and then building on that technology to leverage all its potential benefits. So if we use the telephone as an example, it's the advent of the mobile phone and then smartphones, you know, leveraging that technology. So if you use that definition of innovation within the mining industry, we are definitely good at leveraging technologies. So I don't want to go too far back, but if you think of GPS, right, how we leveraged that technology, collision avoidance systems, so that was developed by the aerospace industry, and now it's deployed on all of our mobile Equipment, robotics. So, spot the robot dogs, there's the robot dog. there's a lot of, companies that use these robotics types of technologies, you know, to, to do their routine type inspections. And then ChatGPT, OpenAI, those types of technologies, I, I read an article, I think last week or, or maybe the week before, where Cecil was saying about how they're planning on integrating and leveraging these technologies, and that's, that's innovation, right? And then in terms of should we be innovative, I completely, agree with, with Sandiso. If we mind the way we did fifty years ago, right? Yes, we could, but we won't be as profitable, right? I don't think anyone would say, yes, sign me up for a two percent, you know, return on a high-risk business, you know? So there's these pressures, and, and there's, there's five reasons why we need to stay innovative and, and to stay ahead of this, this technology curve. And, I would say these are my five reasons that I've kind of put together, you know, based on my, my experience. It's not something that I read in an article or, The please don't go Google search, a B C thesis on this. so the, the first one is, efficiency, and the second one is productivity, right? So it's efficiency and, and productivity. then it's sustainability, safety, and the last one is expansion, right? So those are the five main reasons that mining companies, do or, or deploy, innovations. and expansion, this can be new business models, or it can be new, you know, new, new ore deposits, or, you know, there's, there's a wide range of, of this. So, you know, to answer your question, can we, can mining industry, be innovative? Yes. and then should they be? Most definitely.

Elaine Hattingh, guest · [09:04]Yeah, so I think the answer is it, it depends, right? because if you refer to mining, mining is not this big unit, right? It, it depends on which geography, in which commodity you're mining, which mining house is, you, you, you're working for. so if, if you look at, let's say, from a ge- geography point of view, Australia is known as the, as the leader in mining technology, right? So if you wanna, want innovation within the mining industry, Australia is, is the place to go. Then, like commodities, so lithium and the rare earth element type, commodity miners are, are often known to be more innovative just because, you know, it's minerals of the future and it's, more difficult to, to, to extract, so it needs more innovation and, and, and, technology. The three most innovative mining companies is BHP, Rio Tinto, and, and Volle, and Anglo American is, I know, they're on the top, top five, but they go- concurrently also the three largest, right? So they're the most innovative because they've got Resources to put behind this, these innovations. So if you are, mining a mineral of the future in Australia for one of the large mining houses, yes, be innovative, invent things, right? You've got the resources, you've got the, the backing. If you're mining a commodity in one of the sunset industries in a country, may, be outside of Australia, rather, you know, be a forced follower. so, and, and also to, to Sandiso, to, to, to your point, just because you, you can, don't, doesn't mean you should. So I'm not saying that the large miners in Australia should not, you know, look at, you know, learn from their mistakes, from, from others. I'm just, saying that they have the luxury, to be able to be more innovative and, and, you know, more blue sky thinking, better to, to what, what you were asking than what some of the, you know, sunset industry, you know, commodity miners, might, might be.

Elaine Hattingh, guest · [11:48]So when it comes to what type of, of technology to invest in and, and to investigate, I think it, it also depends on, whether it's a, a pull or a push, right? So if it's, a, a need for the operations, right, let's, you know, if effectiveness, optimization, the, the business improvement approach is definitely the, the best way to go. You know, the, the Lean Six Sigma or, or any, you know, one of those type, types of, of processes. and then identifying, you know, all the technologies in this space that can adequately address this challenge opportunity, and, and if there's not looking at adjacent industries, and then, you know, following that, that whole, that whole process. but if it's a, a strategic push, right, so, in the mining industry, we're trying to be more, more, s-s-s-sustainable, we're trying to be more safety conscious, and, and then from a strategic point of view, we'll have a, a, a, a view of where technology is going. and I hate Using this, ChatGPT AI thing again, because I think it's, it's just a hype at this stage, but I think it, it just, you know, serves as a, as a good example. so we see the, the tech industry and, and, the, the, the digital space is going that, that direction. So how can we leverage that to address our, or to support our, strategic objectives? And I think that's, that's how the, the decision, sh-should be made. You know, it, if it, it should first be established, is the push or a pull? If it's a, if it's a, a pull, is it, you know, Afrikaans is saying is, is it worth doing, you know? and then, that you do a proper root cause analysis, always solving the right problem. And if it's a push, you know, is it, the, the, the foresight approach. So where is the industry going? You know, what is quantum computing gonna mean for, for mining and how can we prepare and, and, and act on that? And the, the hydrogen vehicle that, that you spoke about earlier, Petro, I think is a very good example because, It's, it's a, a strategic, objective of, of, of the company to be, you know, to reduce the carbon, carbon, footprint. There wasn't available technology, so it's that push. So let us as a company, let's do this.

Sandiso Sibisi, guest · [14:48]Yeah. So, I mean, for me, I think, and a little bit about Elaine said, I think it's important that we, I, there's, there's many problems to be solved for, right? There's like a lot of them. And I think it's quite important that we understand that which ones are the ones that will give us the most value if they're solved for. And I think that should probably be your, your, your starting point. I mean, that also just goes, marries to the, the overall business strategy where you go in as an organization. But I think it's quite pivotal that you be solving for the right things. I mean, the stuff that's going to give us the most value. I think many companies are living in a time of uncertainty, a time of, cost pressure, a time of just markets declines, inflation, et cetera. So I think we do need to be more careful about where we're spending our money on. And I think it's, it's, it's best to probably understand where to, you know, plant your seed, you know, as opposed to doing multiple things, but rather focus on the one, two things that are going to give you the Most value. And I think the second thing is that when we do try innovative solutions, it's quite important that we go through a prototype phase. So, and Peter just mentioned that now. I think a lot of companies, when you speak innovation, they're like, maybe not, you know, because there've been so many failed initiatives, right? But if, if, if, if the initiative maybe followed a, a, a, a process of purposely prototyping, the cost implications are, are, you know, not as drastic as going on full scale. I think as corporates, we, we've been, and I come from corporate, so I can say this, we're actually quite bad at just doing stuff in small scale, testing and seeing if there's value, then deciding if we can actually scale something. So I think if we're going to be deciding on what to innovate on, let's have a proof of concept, let's prove the value at a really minute, minute scale that even if the balance sheet, if you see that line of that failed, that, of that failed innovation, like no one is like panicking about it, because the, the problem we have as innovators and design thinkers and, you know, People that are trying to help organizations become innovative, we actually can't use the word innovation because people just think it's a luxury thing anymore. And that's because people have been burned so many times. And it's like, but if you go back to why they were burned, probably is that thing of, you know, not solving for the right problem, not prototyping, et cetera, et cetera. So I think that there, there, there needs to be a process. And I often find that c-companies that necessarily have a, a process, usually sometimes the CEO is, is dreams of this amazing thing. And then it's like, team, execute this. They're going to get value out of it. It doesn't actually work like that. In fact, I think CEOs are probably the least innovative people, actually. So really, I think that the magic is actually in the millennials and the younger generation to actually innovate. And I'm not saying that people that are older generation are not innovative, you know, by no means. But I'm just saying that there's an, there's really an opportunity to get your organization to buy into this thing by bringing them on the journey and helping them, helping you decide what to put your money on.

Elaine Hattingh, guest · [24:18]So, I love open innovation and, you know, the, the ecosystem approach to, to innovation, because I think companies are naive to think that they have the smartest, most creative, most innovative people working for them, right? There's, a world full of people with, you know, the, the, the required skills just, just to, to add to the, the current body of knowledge that that organization has. And there would be no way of, of knowing, you know, what, technologies or, or what thoughts can, can stimulate, you know, new innovations within your industry if it not through the open innovation, approach. but to, to your point, some, there, there are I, I, I want to say specific areas in which it works and, and in which it doesn't. So, we have tried it, and the, the, the one area or, or the, the biggest learning is if it's very mining, technical, technically specific, it's better to approach the industry associations. So if, if you're looking for that collaborative type of, type of, approach to, to problem solving or, or to, to innovation, within this, you know, heavy technical, mining specific type, areas, the industry associations are, are, are very good for that. And then the, the research institutions. So, you know, the CSIRO, the universities, those, those types of, of, of, institutions. But if you're looking for cross-industry, types of challenges, so everyone wants to be more energy efficient. Everyone wants to be more sustainable. You know, it, it's not a mining specific challenge. There I found that Open Innovation works very well. There's, a few challenges that, that, that we've run that, because it's such a unilateral challenge, the, the interest and the, the number of individuals and people and companies that, pitch potential solutions was, was incredible. It was, it was overwhelming. And, the, the results we got was s-s-stuff that, that you couldn't Google, right? I, I wouldn't even have think, you know, I wouldn't even have thought to Google this type of technology for this challenge that we put out there. But, you know, someone through the Open Innovation, approach just came and suggested this, and it made complete sense, and, and, and we, we, we, we tested it, because we test innovation before we deploy it, and it, it, it works brilliantly. So, yes, it definitely works, but within, you know, as I say, certain, constraints.

Sandiso Sibisi, guest · [26:50]I mean, I think open innovation works, in, in, in, in most cases, and I think you need to be selective, like Elaine has alluded. But I just want to talk about maybe the constraints that we have around it. I think most enterprises, and maybe you've gone through this, Elaine, where you've, you've thought of you had a problem, and then you put out a challenge, and then the, the procurement process took so long that by the time you actually landed, it was no longer a business focus. You know, the people had forgotten about, it was something bigger to go for, like load shedding, right? So, it's, it's, it's, it's, I think that, that does dampen the hearts of the, the innovation manager internally as well, and it also dampens the hearts of the startup as well. They just think like, oh, these corporates just want to waste our time, et cetera, et cetera. So I think there's, there's something to be said about just how, how we land things quickly when they're like hot, let's land them, let's get the success story out there, and then let's move on to the next issue. I think the sec, second thing is around, I mean, many, many startups are not built to Operate in large, you know, organizational structures. So you'd have like a three, five-man team. And then when it comes to like deploy, you're like, yo, you want us to deploy this thing? How? They're like only three of us, right? And one is doing R&D. In any case, and one is a CEO and there's like one tech person. So it's kind of like challenging for just like small businesses to actually scale up. And I think there's an opportunity to, to support them. And I'm not sure what that would look like. But one of the things that I think corporate needs to think about as well, I think this is quite a strategic and also very lucrative approach is really around financial corporate venturing. I think there's, there's something to be double-clicked on, you know, investing capital and buying equity in small startups that speak to your business problems and then growing with them. I mean, it's, and it's an unattractive thing, obviously, because it's not your core business, but I do think that there's an opportunity to maybe partner with other people. But I think if we were to get more corporate ventures out there, then we're able to build capacity on the startup from a funding capital investment perspective and help them actually become successful. Because if, if this solution, innovative products, is successful in the mine, people will then start buying into this innovation thing, and they'll be like, okay, let me give this innovation manager my ear because she's done something great in processing. Let me try something in, you know, health and safety. So I think it's important that we support the process as well and not just, let people, you know, be at their own accord and then watch them fail. Like, yeah, Told you we were going to fail. So yeah, I'd like to see more of that, creative collaboration, coming through.