The mining industry has experienced a 30 per cent decline in productivity over the past decade. Commodity price fluctuations are squeezing profit margins, and costs continue to rise. With the industry facing so many challenges, integrating innovation in an already risky and expensive sector can be difficult to justify.
However, companies need to address inefficiencies in their operations to stay competitive, while ensuring they maintain their social licence to operate. As part of this, mining companies are becoming increasingly innovative when it comes to their engagement with governments, competitors, communities and other stakeholders. Social innovation has been recognized as crucial for the future of the industry.
We interviewed Alec Crawford, Senior Researcher at IISD and lead author of the IGF report Innovation in Mining, about his thoughts on social innovation in mining.
Why is innovation in mining important?
Innovation in mining is crucial for a number of reasons. With the decline in productivity we’re seeing, innovation is one way that mining companies can try keep costs down, particularly through automation. Deposits are also becoming more remote and harder to reach. Mining companies are working in environments they haven’t necessarily been in before, and they need to find new ways to mine. Yesterday’s mining techniques won’t be enough to access tomorrow’s deposits, and these deposits need to be accessed in cost-effective ways. Lastly, with businesses needing to become more transparent in how they operate, environmental and social performance is key. If businesses can integrate innovation into their practices to improve both, it can boost their social licence to operate.
What impact does social innovation have on the mining sector?
Mining companies are increasingly recognizing that innovation is most successful when it is rooted in collaboration. Collaboration around innovation can be tough in a sector as competitive as mining, but that may be starting to change. For example, we’re seeing more “hackathons” taking place, where companies bring together young professionals or students to help them solve key mining problems over the course of a few days. This brings fresh eyes to old problems that companies have been challenged by and haven’t yet been able to figure out, and can lead to innovative solutions that benefit the sector as a whole.
Social innovation also involves working closely with communities to determine what happens after the mine closes. For example, how is the land going to be developed and used after mine closure in a way that provides positive, sustainable livelihoods well into the future? Communities are best placed to answer this, and working with them will result in the most innovative solutions. Again, this kind of collaboration is at the core of social innovation.
What is one example of social innovation in the mining industry?
There are, of course, many, but a notable example of companies using innovative technologies to work with stakeholders is through the use of smart sensors. Teck Resources uses smart sensors at a mine site in Chile to generate data on the impacts of its operations on the local environment. This technology monitors, in real time, water and air quality at the mine site, and the data is then immediately made available to the public. By promoting transparency and engagement with the community, the company holds itself to a high level of environmental performance and can further strengthen its social licence to operate.
What are your predictions for the future of social innovation in mining?
It will only increase moving forward. Companies recognize the value of social innovation to their performance and their social licence to operate, and communities increasingly expect it, given its positive link to environmental and social performance, transparency and accountability.
The mining sector also sees the value of engagement and collaboration with a broader range of stakeholders through social innovation; new ideas and fresh perspectives can help them address old challenges, while also potentially attracting the kind of young talent that the sector—long considered old fashioned—may not have attracted in the past.