Growth Productivity Innovation in the Minerals Industries

Growth, Productivity & Innovation in the Minerals Industries Dick Davies AMIRA International Sarah Vandermark ANU NGSM Forum 13 May 2003 The mineral industries research association

Theme High-tech continuous improvement and break-through research have significantly improved productivity in mineral exports. The mineral industries research association

But first – a morality tale “The Rush That No-one Noticed” (apologies to Geoffrey Blainey …. ) The mineral industries research association

December 1984 The mineral industries research association

So…What happened in January 1985? ? ? ? ? The mineral industries research association

Source: Newmont The mineral industries research association

Processing Exploration Mining R&D Source: ABARE The mineral industries research association

Gold Production and Regolith Research understanding weathering of orebodies new sampling methods study of regolith Value $500 per ounce (right axis) The mineral industries research association

High-Tech Inputs into Gold • • CIP / CIL – Processing Chemistry Regolith Geochemistry Image Processing – Information management and visualisation software • Greatly improved analytical techniques • Geophysics – Magnetic, Electromagnetic and Radiometric data • Instrumentation – Airborne EM The mineral industries research association

Spin Offs from Gold Technology • Start-up companies in aeromagnetics, software (eg. Fractal Graphics, Falcon) instrumentation, image processing etc. • Non–specialist tools • Digital data processing • Environmental monitoring, salinity, footprint, (eg. Airborne EM -TEMPEST) The mineral industries research association

ARIES Satellite Image The mineral industries research association

But, the Australia has Undervalued Mining and Minerals Normandy Mining Limited North Limited Source: Robert Champion de Crespigny, 22 Feb 2002) The mineral industries research association

The moral of this story is: • Hi – tech R&D inputs in gold mining significantly improved productivity - continuous improvement in PROCESS technologies and breakthrough in EXPLORATION • This R&D is leading edge and world class • New service businesses created • But undervalued in Australia The mineral industries research association

Furthermore…. I could tell similar tales for oil, coal, alumina, iron-ore, mineral sands, copper, zinc……. …. but I won’t! The mineral industries research association

The mineral industries research association

Ian Wark Research Institute The mineral industries research association

Ian Wark Research Institute The mineral industries research association

Ian Wark Research Institute Leading Edge Discipline Interfacial Science and Technology (hard and soft surface interactions) Minerals Base Control of Acid Mine Drainage in waste rock and tailings dams Sustainable Development Reduction of environmental impact of mining and in liability to company and country in management of waste New Sectors • • • Drug delivery and nanotechnology Bio materials Ophthalmic lenses Inkjet printing Polymer surface coatings The mineral industries research association

Ian Wark Research Institute The mineral industries research association

A PLATFORM FOR RISK REDUCTION Technical Market Export Minerals High Lower New Markets High The mineral industries research association

A word about the minerals industry The mineral industries research association

Importance of Australian Minerals Industry • 8. 5% GDP in 2001/02 • Contributed ~$500 billion to Australia’s wealth over the past 20 years • Exported $41 billion in 2001/02 = 37% merchandisable exports = 28% total goods and services The mineral industries research association

Trends in the Australian Mineral Industries • Decreasing commodity prices • Mergers and acquisitions • From ‘Production Base’ to ‘Minerals Finance House’ • No longer Australian owned The mineral industries research association

Real Metal Price Trend 1970 -1998 The mineral industries research association

Australian Productivity Index (1986 = 100) Source ABS (2003), Access Economics MCA The mineral industries research association

Contributing Factors to Mineral Export Success • Labour productivity • Capital productivity – Microeconomic reform • Multi factor productivity – Continuous innovation (process improvement) – Breakthrough R&D (Exploration success) The mineral industries research association

Trend in BERD for Broad and Narrow Defined Australian Minerals Industry The mineral industries research association

Claims Under Australian R&D Tax Concession by Industry Sector (ANZIC) Source Matthews and Howard 2000 The mineral industries research association

Australian BERD with Broadly Defined Minerals Industry (ANZIC classifications) BERD Mining (+ services) + Non-metallic mineral product + Metal Product Broad Minerals Industry + Petroleum, Coal, chemicals and associated products Broad Resources Industry Rest of Manufacturing Total all industry 2000/01 AUD $m 456 385 41 882 385 1267 1546 5012 The mineral industries research association

Mining Services Technology • • Australia’s sixth largest merchandise export Austmine $1. 9 billion Total ~$3 billion MTSAA estimate 2001 $611 million The mineral industries research association

‘Minerals: A Platform for Innovation’ Mining and mineral technologies and engineering are leading edge, hi-tech and world class. They under-pin basic research disciplines which 1. Reduce market risk and 2. Provides a platform for new market sectors. Sustainability objectives are also achieved through energy efficiencies and reduced impact of mining. The mineral industries research association

Lessons for Government • Mining wealth is created – its not a gift from nature • Commercialisation of R&D and innovation extends beyond start-ups and venture capital. • Incremental and step change gains in productivity in established industries greatly enhance economic activity. • Spillovers occur into new markets. • Relevant statistics to support this case are not collected: ABS, BERD, MTSAA inadequate The mineral industries research association

But when government does get it right… it gets hammered !!……. The mineral industries research association

Age 18/7/02 “Brown coal keeps Victoria in the steam age” – Kenneth Davidson 22/7/02 The mineral industries research association

www. amira. com. au The mineral industries research association