Innovation Can Improve the Success Rate of Exploration, Says Cleantech Group
SAN FRANCISCO, CA — March 26, 2024 — AI and precision exploration technologies are improving the less than 1% success rate of mining exploration by up to 20%. With greater demand for critical materials to build a net-zero economy, exploration technologies will be of increasing importance, according to Cleantech Group (graphic included).
Of the 6.5 billion tons of materials required to make the energy transition, about 95% are steel, copper and aluminum, raw materials deposits for all three (iron ore for steel, bauxite for aluminum) are in known locations. For the rest, miners must explore, which is increasingly difficult, to find and access locations. This is creating enormous opportunities for low-impact — or targeted — mining.
Targeted mining offers several advantages over conventional approaches. It requires less capital and fewer resources and leaves a lower carbon footprint. Precision approaches have potential to improve the economics of mines by supporting access to difficult-to-address deposits and by extending mine lifetimes. Innovators have a large total addressable market.
“Mining exploration has a <1% success rate in progressing from exploration to commercial production,” said Holly Stower, Cleantech Group’s Group Lead, Resources & Environment.
Technological advances also lower mining risks. For example, VerAI Discoveries uses AI and ML to find mineral deposits with 100X more accuracy than traditional exploration. It is also 20X faster and cheaper.
“Such innovation leads to more responsible, lower-carbon sourcing of minerals, significantly helping in lowering mining’s considerable climate impact,” said Stower, citing the example of surgical drilling company Novamera, which can cut waste by 90%, emissions of greenhouse gases by 44%, and costs by up to 50%.
Key findings:
Technologies still emerging. Most technologies to enable low-impact exploration are in pilot stages and show promise. Established sensing technologies such as Muon, LiDAR and Hyperspectral allow more detailed and accurate estimation of ore quality, characteristic, and location. Sensors are being stacked with emerging AI and ML analysis software to predict ore location more accurately and improve chances of discovery, while modular precision extraction tools help access smaller deposits, such as a small vein of gold in a protected forest.
Collaborative business models. Low-impact mining exploration offers new business models, with additional revenue streams. SaaS has become a go-to choice for companies like PlotLogic and Ideon that can be used across the full mining lifecycle. Companies focused purely on exploration, such as VerAI and KoBold, are acquiring exploration licenses and partnering with explorers or conducting exploration activities themselves so they own the materials discovered and can avoid diluting the value of limited discoveries. Precision drillers can access a hardware-as-a-service (HaaS) model, in addition to SaaS.
Innovation key to cost cuts. Due to the scale of mining operations, inflation has hit mining disproportionately while commodity prices continue to drop. Additionally, exploration costs are rising because undiscovered deposits are deeper and more difficult to access. Consequently, major miners are looking to technology to create efficiencies and reduce operational expenditure.
Incumbents have an edge. Even though the total addressable market for low-impact mining is large, demand is concentrated to a few mining majors. Capitalizing on the benefits of innovation will require incumbents to be flexible in partnership models, being prepared to lend technical support and propel innovation engagements beyond pilots. Incumbents holding such an advantage include Australia’s BHP, Brazil’s Vale, and French multinational Schneider. Each has investments or partnerships with innovators such as I-ROX, Novamera, and PlotLogic, with further potential afield.
About Cleantech Group
Cleantech® Group is a research-driven company that helps corporates, public sector, investors and others, identify, assess, and engage with the innovative solutions and opportunities that are related to the world’s massive, and growing, environmental and climate challenges. Our insights and expertise are delivered to clients all over the world through our Research, Consulting, and Events. We have been the leading authority on global cleantech innovation since 2002.