When precious ores are dug up from Finnish mines, a business opportunity for a completely new kind of startup is not the first thing that comes to mind. However, Olli Salmi, Director of the EIT Raw Materials Baltic Sea Co-location Centre, believes that the industrial internet and digitalisation are just beginning to shake up the mining industry.
”A future innovation could well be, say, an application that helps a miner operating a machine to work smarter,” Salmi says.
The future of the mining – or, on a larger scale, the raw material – sector is a hot topic across the continent. Whereas the EU currently needs to import 80 per cent of its raw materials, the picture could be very different by 2020. For example, the sector is now awash with Finnish expertise: Europe’s largest gold mine is located in Kittilä and pioneers such as Outotec and Metso know how to use cutting edge technology in the exploitation of minerals.
Turning weakness into a strength?
Raw materials are also one of the focus areas selected by the European Institute of Innovation and Technology (EIT). In December 2014, EIT Raw Materials was established as a Knowledge and Innovation Community (KIC) with the task – no less – of turning the challenge of Europe’s raw material dependency into a strategic asset.
Olli Salmi believes that this could succeed if mining can be transformed and the refining process improved.
”It is also clear that the circular economy is becoming more and more important. More efficient use of waste and industrial side streams offers many business opportunities,” Salmi adds.
But what does EIT Raw Materials actually do in practice? According to Salmi, it is a kind of fully fledged EU version of the Finnish SHOK centres (Strategic Centres for Science, Technology and Innovation). The Raw Materials community focuses on sustainable prospecting, extraction, processing and the substitution of raw materials. The goal is to use innovation and entrepreneurship to boost competitiveness, growth and the attractiveness of the European raw materials sector – responsibility for achieving this is distributed all over the continent.
In formidable company
The Raw Materials community has a total of six co-location centers (CLCs) which direct the activities in question: In France, Italy, Poland, Belgium, Sweden – and in Finland. Raw Materials Baltic Sea CLC Ltd, whose domain includes Finland, Sweden and Estonia, operates from Otaniemi in Espoo. Led by Salmi, the centre has been operating for over a year. Wheels are made to spin fast and furiously.
”This year, the entire Raw Materials community has launched 86 projects, while 14 have been started up by our CLC,” says Salmi.
Harry Sandström, a long-standing expert in the mining industry, is one of the team at EIT Raw Materials in Otaniemi. He points out that the coalition now assembled has few equivalents on the European scale: 120 partners, including a hard-core assemblage of world-class companies such as Outotec, Sandvik, Höganäs, Metso Minerals, Atlas Copco, LKAB, Boliden, BASF and UMICORE are involved.
”If you are prepared to collaborate, the Raw Materials community has the muscle needed to get things done.”
Sweden and Finland as pioneers
A surprising amount of the mining industry’s best expertise can be found in the chilly North. According to Sandström, more than 80 per cent of the world’s underground mining technology comes from Sweden and Finland. Razor-sharp business skills are complemented by academic research, which has long traditions in minerals, for example.
”We have a base on which to build. In this sense, a major challenge lies in figuring out how to get the most out of the consortium,” Harry Sandström says.
Another challenge lies in changing the somewhat stereotypical image of the industry – and most importantly, of its everyday activities and processes. Sandström also sees a multitude of possibilities during various stages of the mine life cycle: if we consider that the process begins with ore exploration and ends around 50 years later, when the mine is closed, this ’raw material pipeline’ is ongoing for half a century – and there is a lot that we could do faster, smarter and more cost-efficiently than now...
”For example, 20 years can elapse from the prospecting phase to the startup of mining. The life cycle includes a range of phases during which information is generated and used – mining truly offers big data potential,” explains Sandström, linking the traditional mining business to a current buzzword.
Future opportunities are being identified by the members of the EIT Raw Materials Baltic Sea Co-location Centre – (left to right) Olli Salmi, Reeta Kemppainen, Mikko Korhonen and Harry Sandström.
Scaling is smart
Harry Sandström believes that the dramatic transition in the mining industry has paved the way for new business models.
”Activities used to take their own time to develop, after which we moved everything forward on their basis. Now we can start with lower investments and scale up whenever we need to,” he says.
This is where a new kind of startup concept might come in. Mikko Korhonen, an expert from EIT Raw Minerals who is heavily involved with startups, sees many opportunities in this aspect. Whereas the big mining operators once wanted to keep a tight grip on everything, they now understand that they should outsource non-core operations. It is now all about building and maintaining a functioning ecosystem.
”SMEs are networking rapidly, because it is an effective way of providing the customer with the entire package,” Korhonen says. For him, this is like completing a jigsaw puzzle – the best solutions and business models can be identified on the basis of extensive cooperation.
In Finland, Sweden and Estonia, the research community is closely involved in this process, and the ’from lab to market’ ideology is making headway.
”Spin-offs from research done at Aalto and other universities are also appearing in the mining sector,” explains Korhonen.
Projects provide the platform
What about the Raw Materials projects currently underway? What kinds of innovations can we look forward to? Olli Salmi states that there are projects covering the full range of issues, from the enhancement of learning to the scaling of business and smarter use of the existing R&D structure.
”We want to bring in SMEs, in particular, via these projects,” Salmi adds. A total of EUR 270 million in EU money is available for the first five years. The overall funding structure is based on the notion that EU funding will grow steadily over a seven-year period, after which it will begin to fall.
The Otaniemi Raw Materials team is small: the group led by Salmi has a total of five members. The focus is on ensuring that companies get the maximum benefit from projects – and new actors enter the sector.
”If you think of the mining industry, new businesses can spring up in areas such as recycling, measurement or information technology,” says Harry Sandström. New themes, such as visualisation and virtualisation, will also transform the traditional industry.
Farewell to partial optimisation?
Sandström regards the mining industry as a conservative sector still held back by too much partial optimisation. ”In the future, we will be better able to focus on the creation of functional wholes,” he believes.
”Even fully functioning unmanned mines are beginning to come within the bounds of possibility,” says Olli Salmi.
”The development of automation will lead to the emergence of such concepts at some point,” Salmi says.
In a similar way, the enhancement of recycling could lead to everyone becoming a ’raw material trader’ – at least in areas such as laptop computer components.
So is the sky the limit? Not at all. In fact, Salmi and his team believe that, some day, we will exploit resources beyond our planet.
”Space mining has not arrived yet, but it might some day,” Salmi suggests.