Mining IP belongs with SMEs, not big miners

AUSTRALIA needs to divert research and development funding that benefits a handful of large global miners towards building more commercialisation channels for world-class mining R&D via small to medium-sized enterprises, a mining technology conference has heard.
Mining IP belongs with SMEs, not big miners Mining IP belongs with SMEs, not big miners Mining IP belongs with SMEs, not big miners Mining IP belongs with SMEs, not big miners Mining IP belongs with SMEs, not big miners

METS Ignited CEO Adrian Beer presents at the Robotics & Automation in Mining conference in Australia

METS Ignited CEO Adrian Beer, whose previous senior executive roles with ABB and GE had him targeting Australian SMEs for acquisition or partnership, said that was a "problem" he was trying to fix in his new role.

METS Ignited, part of the Australian government's Industry Growth Centres Initiative, aims to work with a collection of stakeholders to "improve the global competitiveness and productivity of the Australian METS [mining equipment, technology and services] sector".

Major mining companies represent one group of stakeholders.

Beer said at the second Robotics & Automation in Mining conference Australia did have large METS companies, including technology-focused ones, that were competing with international rivals both for mining market share and merger and acquisition opportunities in the METS space.

Generally, though, despite Australia being a large market for most mining equipment, products and services, and a leading market for next generation automation, robotics and information and communication technologies, it was missing opportunities to turn successful mining R&D into a wider network of METS SMEs that could leverage domestic market success and build scale via offshore markets.

Instead of being picked off by large international groups they could expand faster, organically, and become visible and attractive to financial backers.

"One of the challenges that we face in Australia is that most of the innovation and technology that we develop for our primary industries has been funded by those primary producers in partnership predominantly with the research sector or collaborative research programs, but the missing link and the opportunity is having the commercial partner to turn those innovations into products and services within our local economy," Beer said.

"In Australia we have world-leading innovation, what we don't have yet is a thriving commercialisation engine that supports turning those innovation outcomes into products and services within our local market. It is very easy to lose them overseas and we often do because we don't have that attractive local productisation and commercialisation capability.

"This is something the [federal] government is trying to address with the [new A$1.3 billion] Modern Manufacturing Initiative and the National Manufacturing Priorities program.

"[But] a modern manufacturing strategy won't work if we don't have anything to manufacture.

"It's also fundamental that we can't convert research and development outcomes into products if we can't manufacture them. We don't necessarily need to own every step of the manufacturing process, but if we don't have access to a modern manufacturing capability within our local economy, we are not going to be able to convert the outcomes of our R&D sector that are in demand from end-markets, and turn them into products and services we can sell in our own right.

"What we need to do is make sure the outcomes of all these programs become products and services in Australia, in our local market. If we don't have a thriving technology sector within our local economy, we're not going to be able to sustain all those future skills and jobs, all those critical capabilities, that we're going to need to address any number of future challenges."

Beer said much innovation and research historically had been captured by individual mines and mine owners, restricting wider commercialisation of the IP, or faster "productisation".

He said this was a model that rarely worked for SMEs or their owners because it meant limited commercialisation was via an end-user, not a technology or service company that could generate profits, reinvest in product development, and business growth.

"There is a massive amount of technology capability stranded in our primary industries, in our supply chains, for which there isn't a single [other] customer in the world … because the company that has that technical capability hasn't done the commercial conversion of that technology into a product or service to sell to the market," Beer said.

He said the development of mine haulage and other automation in Australia was a case in point.

COVID-19 had ushered in nearly a year of increased reliance on remote operating capabilities and certain technologies, and restricted movement [and increased cost] of personnel.

Beer said it might have accelerated wider mining industry "commitment to a more autonomous operating environment" by up to five years.

"The key thing is COVID has accelerated the adoption of the technology we've already developed within our resources sector," he said.

"So the opportunity now is to make the technology commercially available so that other industries, or other mining companies, can take advantage of the innovation developed in the resources sector.

"We did see in the late 1990s and early noughties, as communication became a key and [led to] the ability to transfer data from remote locations to central processing centres that enabled the automation capability … the big resources companies who saw that opportunity didn't want to lose control of the ultimate power of the buyer in applying tech to their operations.

"So they protected their IP [and] only invested in consumption of an innovation if they owned the IP. It was a race to the bottom of the cost curve. It placed a disproportionate amount of value on the IP itself, and not enough value on the business model that commercialises IP, which is what we see around the world.

"A lot of the innovation then didn't progress. It kind of got consumed at the point of creation and then was just built into a bespoke operating supply chain that was further developed and enhanced.

"[The main initial mine haulage automation] project … is still on the first version of software because that software wasn't in the marketplace with other vendors competing and improving products and new features, and lowering costs.

"So that evolution hasn't happened and now, 20 years later, the mining companies who've got the next set of challenges … are going to need a very capable tech sector to support them and their challenges.

"The miners now know there is no pool of resources in the Australian economy if we don't free up that IP and that information."

Beer thinks "we're finally seeing a shift from trying to protect IP to commercialising IP … because there is more money in commercialising it than trying to retain it".

"BHP announced their $850 million commitment to the Australian METS sector … and $450 million of that is investing in the commercialisation of IP that is stranded in their supply chains, as well as investing in the development of new technology that they don't want to own, because they want to stick to mining.

"But they do want a tech sector they can lean on because that's where they're going to have to hire from in the future."