New Opportunities and New Challenges - Mining Technology and Competitive Advantage

Batterham and Algie began their paper on: `The role of technology in the minerals industry' (1995) by noting that while: it is often stated that innovation is central to the economic survival of mining and minerals processing in the face of global competition, .. . technology is often far from a core strategy in our industry. This point is correct. Throughout the world, as a broad generalisation, mining companies do not value technology development as a principal means of gaining competitive advantage. It is important to understand why this is the case. Batterham and Algie address this question by making distinctions between innovation, technology and research. They note that while: all successful (mining) companies are good at innovation . . . that innovation can proceed without any research and development and that it is innovation that generates the competitive advantage, not research and development per se. In this paper we accept these arguments. However, our focus is somewhat different. Whereas Batterham and Algie took a mining company's perspective on the technologies of mining and processing, we take a broader view of the opportunities for technology development for company Australia but, in order to focus the argument, we restrict our discussion to the area of mining (rather than processing); we focus particularly on mining systems and mining equipment. We begin by looking at the motivation of companies operating in any industrial sector to invest in research and development. Figure 1 recognises four levels of industrial maturity. For companies in the embryonic and growth stages R&D often is essential to initiating and developing the business. Mining, on the other hand, is a mature industry. In mature industries the conventional roles for R&D are to reduce costs, to extend product differentiation, or to develop new technology with the aim of rejuvenating the business. Next we ask whether these general-industry arguments apply to the mining industry. If they do then the mining industry should value R&D more highly; after all cost reductions and business rejuvenation are goals that are worth achieving. On the other hand if, for whatever reason, these general arguments do not apply to mining then this may lead the mining industry to invest only modestly, or not at all, in R&D. In this event, while this may be a rational decision for the mining industry, it may not be in the best interest of a nation like Australia where revenues from the sale of mineral products represent an important part of the country's economy.