Digitalization Trends and Sustainability in the Global Mining Industry

Hello and welcome to all participants connected from the different parts of the world. According to the registrations, there are many people from Chile, from Germany, and also Peru, Brazil, Ecuador, Spain, Australia, Canada, Sweden, Turkey, Ghana, and many other places. And I'm really excited to moderate this webinar on digitalization trends and sustainability in the global mining industry. My name is Denise Kirschner. I am Project Manager at the German-Chilean Chamber in Santiago, and I will guide you through this event today, which is part of the activities we organize in the framework of the German Mining Network. An international platform that stands for the eight competence centers for mining and raw materials located at several German chambers in countries rich in raw materials, as well as other strategic international and national partners such as the German Mineral Resources Agency, the Association of German Chambers of Industry and Commerce, Germany Trade & Invest, and RWTH University, which coordinates the network together with our champion, Chile, since this year. But there are many other institutions and associations involved, and I invite you to have a look at our website, germanmining.net, where you'll find further information, contacts, and where you can register for our monthly newsletter as well.

I would also like to point out that this network is supported by the German Federal Ministry for Economic Affairs and Energy. And I am very pleased to welcome Anika Glads, our former colleague at AHK Chile, and now part of the Department for International Raw Materials Policy at the Ministry. And with this, Anika, I hand over to you for a few welcome words.

Thank you very much, Denise. Dear ladies and gentlemen, first of all, thank you for inviting me today to speak to you on behalf of the German Ministry for Economic Affairs and Energy. And we are very happy that this webinar today is taking place also as a joint effort by all the members of the German Mining Network, because, as we can see, it does combine two very important mega trends, sustainability and digitalization, with each other and will point out the interdependencies that exist between those two topics and mining. So it's a very important topic. But, um, we also, of course, on a more general level, welcome very much the fact that the German Mining Network allows the German raw materials and mining community to engage in dialogue about innovation, about cooperation with international partners, and we think that it's a very efficient platform for doing so. So this is why we fund this network since 2018, like Denise already mentioned. And we actually agreed with Denise that we will keep it today very short because there's a very interesting program ahead with concrete and practical examples and with very interesting findings of investigation in this topic. So without further ado, I will keep it short today and just congratulate all the participating partners for putting this interesting program together, and I wish us all a very interesting and fruitful discussion for today. Thank you very much.

Thank you very much, Anika, for your nice words and for joining us today. And yes, with this, I think we can start the presentations. I invite you all to write down your questions or comments in the chat, and after each block, there will be a discussion round and time to answer your questions. But now, I've talked enough, and I would like to give the floor to my dear colleague Sophie, who will introduce today's topic and our first speakers.

Thank you, Denise, and welcome to all participants for me as well. The webinar today is all about digitalization and sustainability, which are key topics in global raw material markets. The development of Industry 4.0 in the mining sector through digitalization and automation is of great importance for mining companies to remain competitive and to generate more efficient production processes. We will learn during the webinar today to what extent digitalization trends are linked with sustainability aspects, aiming to make mining and the related framework more efficient and resource-conserving. The German Mining Network is intensively engaged in these future-relevant topics and can contribute to the change through rapid transfer of technological innovation and now international networking opportunities and the creation of synergies.

And now, a warm welcome to Gudrun Frank, Head of the Mining and Sustainability Unit from the Federal Institute for Geosciences and Natural Resources in Germany, short BGR, who was supervising a study, Assessment of the Effects of Global Digitalization Trends on Sustainability in Mining, commissioned by the BGR. Gudrun Frank will tell us more about the motivation for the study, the context regarding sustainability in the mining sector, and the role of digitalization. And after that, we are very pleased that Arty Servants, a research assistant at RWTH University and lead author of the examination, will present to us the study and its key results. And with this, Gudrun, I hand over to you for your presentation.

Thank you very much and thank you for the introduction. I'd like now to share my screen. Um, um, yeah, I said I'm Head of the Unit Mining and Sustainability of BGR. We are subordinate to the German Ministry of Economy and as such, we have commissioned this study. I only give a short introduction around five minutes, as has been said. There are two mega trends currently in the mining sector: that's digitalization and ESG, the sustainability issues. And these two trends are closely interlinked. Also, we can see here in the business monitor of Ernst & Young with the 10 major business risks and opportunities. Digital and data is one of them, but also decarbonization, productivity, license to operate, which are still very pressing issues in the mining sector, and all influenced by digitalization.

We can't see the screen. Oh, sorry. No problem. Do you see it now? No, no. If not, I could try to share the screen. Maybe you can stop the sharing now. We can see the emails. Yeah, can you see the screen now? But it's your email inbox still. Yes, I will share my screen. I think, yeah, that would be great. Sorry for that. Are we working in home office? It's not always ideal. So, okay, that's better now. So, next slide, please. Sorry. So, here again, as I said, there's the EY risk monitor in mining, and we can see that digital and data and many issues of sustainability are linked to digitalization. And with this study that we commissioned last year to the University of Aachen, we wanted to get more details how these two issues are interlinked. And especially three major research questions: First of all, which mining processes are currently almost subject to digital transformation and how do these processes affect sustainability on the different levels: economic, ecological, and social effects? And if we can expect different effects depending on company size, type of deposits, for example, the location, mining methods, and so on, to get more details on these interlinkages.

Next slide, please. Here we see, we already know there are several studies on the effects of digitalization on sustainability and sustainable development. For example, we have seen benefits in health and safety, innovation, better efficiency of mines, emission reduction, and also higher quality workplaces in the mining sector. But we also see, especially in developing countries, challenges that there is a decrease of local content or a fear that this is decreased, then a decrease of local workforce, and also challenges for high investment and financing costs and this transformation.

Next, please. And as I said, the mining situations are very different globally, and we have different major producing countries, but also we have small mining producers, we have underground and we have surface mining, and these different realities are differently affected by digitalization. And that's for the results of this study. I would like now to hand over to my colleague Arty to get into the details. Thanks a lot.

Thanks, Gudrun. That's perfect. So, if you can unshare the screen. Okay, perfect. Okay, so welcome everybody and thanks very much for the opportunity to present the results of the study that we undertook on behalf of BGR last year. I was already introduced, so I just want to say a few words about the study overview, the design, how we went about trying to answer the questions that BGR gave us, and I will focus today on three major aspects of the study: so the key digitalization trends, also looking at a mining process level, and then I want to discuss some challenges and opportunities and show you the results that we got, and then focus on the effects on aspects of sustainability and with some conclusions.

So the study overview, as every good study, we had some guiding hypotheses, and that were sort of underlying the approach, and you can see the link here to what Gudrun already introduced. So the first hypothesis was that processes of digitalization and aspects of sustainability are closely linked. But since we couldn't be sure how this was, our first one to test. And the second one was that the level of implementation may vary in relation to certain influencing factors. So we wanted to test this as well. And so we formulated a bunch of research questions for the two parts of the study. I won't go through them, but I want to focus on these three aspects: understanding the digitalization trends, understanding the challenges and opportunities, and some of the effects on digitalization of digitalization and sustainability. Obviously, I can only touch on these topics today and sort of present you the quintessential results. You're welcome to download and read the full study. There are two parts to the study, it's freely available. We will post the link also in the chat, and we can send it also after the workshop to all the participants. It's about 60-70 pages each, so it has a lot of material. Yeah, and I will try to give you the gist of it in the next 15-20 minutes.

The focus was on metal ore extraction processes, so really also on the extraction here, and we didn't focus on exploration and we didn't focus on downstream processing. We did look at all mining types, including artisanal and small-scale mining. However, in the presentation, I will just focus on the large industrial mining operations, just because otherwise it would be a bit too broad for today's purpose.

The methodology and study design was that the first part was largely based on a desktop research based on 150 international sources and the keyword search. Those were conference papers, company reports, journal articles, and so on. And here we focused really at looking at the different mining processes and process levels. And the second part was based on 29 semi-structured expert interviews with mining companies, suppliers, research institutions from around the world. And here we took a more global view on the impact of sustainability and also the digitalization trends. I will present to you the combined results of both studies.

Okay, so let's jump right in. This is part of the first combined conclusion in regards to digitalization trends based on our analysis. We identified 15 leading trends that are currently shaping the digital transformation in the industry. And what we've done is we focused on three process levels. So we looked at not only the technologies, but then looked at sort of which level of the operation or the mining company is this technology affecting. So we looked at leadership processes where cybersecurity is the main issue. This is sort of corporate and governance issues. Management relates to planning, control, coordination of the operation. And here we saw that simulation and visualization, advanced analytics, and integrated platforms, meaning software solutions that integrate all the IoT sensors and all the information, all the data that's coming in, in a singular platform, these are the leading trends for the management processes. And on the operational side, we sort of looked at eight different processes: operational processes that we defined here, development, extraction, ventilation, and so on, to really identify also the impact on the different technologies on these process levels. I won't go into detail on all these aspects in the presentation, but again, you're welcome to look this up in the study afterwards.

So on the operational processes, automation, IIoT, up, remote operation centers are the sort of the leading trends. And the color coding here is, we throughout the study, we used operational processes in green, and the yellow indicates the management level, and the red leadership. And you can see what's interesting is that the results from the interviews and the results from the desktop research were consistent with each other. So this is sort of the main outcome also from this analysis. And the main drivers or incentives that we identified for these trends: improving worker safety, increasing productivity, and reducing CAPEX and OPEX or becoming more cost-efficient.

To give you just an overview of sort of what this looks like in an actual operation, again, we use the same color coding. You can see the effects here or the digitalization technologies affecting the management processes. And we actually found that the biggest impact of digitalization is actually on the management level, but obviously it relies on the different technologies that are implemented. And as well open pit and underground operations in terms of the leadership, blockchain is still in here. We did not consider it further in the study, but I'm really excited that today we have a presentation, a case study on how blockchain is being used along the entire value chain, since it's often more related to downstream processes. It is relevant, but we didn't consider it because we were focusing on the extraction process.

So coming to the conclusions already on the digitalization trends, what's really, just a lot of text, you don't have to read everything. What, but if we say that the vision is a digitally networked, autonomous mine where the systems are really able to reduce complexity and allow real-time decision-making, while technologies have been developed over the past decade, this is still in the early stages of being realized. And part of the reason for that is that not all the available technologies that we've seen are implemented in a single operation. Usually, there's a focus on optimizing a certain area of the operation, like whether it's geology or whatever it is, but it's usually a specific focus. And the second thing is that on the operational side, you do need connectivity, you need a comprehensive IoT infrastructure and communication infrastructure, and this is capital-intensive, and usually there's not the entire operation is covered with IIoT or connected to the IIoT yet. So this we will see in the coming years, and this will allow to take more advantage of digital connectivity and the actual data input.

The lack of interoperability or content compatibility between machines or from different vendors is slowing down the implementation of digitalization and of autonomous systems. In terms of the management level, one of the big challenges still is gaining real value from the data and applying advanced analytics and using these integrated platforms. Again, they depend on the IIoT input, but this is, this will come, but it's also still a big, yeah, a big hurdle to really take full advantage of the technologies that are available. And the more we get to connectivity and full IoT infrastructure, the more we can then also look at integrated optimization approaches across the value chain, across different processes, because especially on the intersection of different processes, there's a lot of potential for optimization. In terms of the leadership processes, cybersecurity will, based on our analysis, be the leading concern for company leadership in the near future. So this closes the first part, and I will now jump quickly to the challenges and opportunities.

Starting with the challenges, what we've done here is this is based on the outcome of the interviews. And what we've done is that we basically, we had asked all the experts for their opinions on the challenges and opportunities. We analyzed the interviews, collected keywords, and then clustered those keywords. And based on how many times a cluster or those keywords in the cluster were mentioned, that corresponds with the size of the bubbles here. So you can see sort of, based on our set of interviews, which of these topics the experts viewed as the most relevant to the industry at this moment.

So what was striking was that talent management was by far the one that was mentioned the most. So this relates to attracting suitable talent, finding the right people with the right skill sets, which is also made more difficult by the fact that mining does not have the best of images when competing with Google and other tech companies for talent. It can become difficult to attract and retain the right skill sets, but there's also retraining, reskilling, their generational divides, there's a lot of issues that are related to talent management. And the second biggest one was data management, that relates to connectivity, communication infrastructure, the quality of data, the sharing of data. So there are different issues here. But what's interesting here is that most of these challenges, actually, about half of them, are actually not technical in nature. So it's a lot about managing talent, managing change, innovation, collaboration, dealing with fears on the side of the employees for perceived job losses, and so on.

Looking at the opportunities, the biggest opportunities that the experts saw was real-time data capture. You did see it, it was also a big challenge to deal with the data, but it also bears the biggest opportunities. It can help to reduce variability, it can help with visualization, simulation, real-time decision-making, forecasting, and so on. This is all based on real-time data capture. The second biggest one was again a non-technical one: safety and workplace attractiveness. Remote operations, for example, make it a lot easier to attract also a more diverse workforce. So this is considered a big opportunity to attract a more diverse set of employees. And what's interesting here is that a lot of the opportunities are pretty directly linked to aspects of sustainability that are familiar: extended life of mine, community engagement, safety, and workplace attractiveness. Those are all issues where you can already see a link to sustainability issues.

So summing those up, the challenges and opportunities, it's interesting that the most pressing challenges of today's global mining industry are actually managing talent and managing change, to sort of sum it up in this way. And to take full advantage of the opportunities, aside from overcoming the challenges with IoT infrastructure and data management, it's really about assembling the right team and the right suite of people capable to drive innovation and change. Leadership is a really important topic here as well. So this is one of the outcomes of the study that those processes are at least as important as the technological transformation.

This brings us to the third part, looking now at the effects on sustainability. Don't panic, I know it's a big graph, complicated-looking table, but I wanted to show you how we went about this analysis. You can see here on the left-hand side, the eight different operational processes. We've done this kind of analysis for the leadership and management processes as well, but I will spare you the tables and just do it for the operational processes. Then we looked at which of the technological trends that we had identified are affecting this particular process the most. And then we looked at the four pillars of sustainability and various sub-aspects of it. And based on the expertise of the research team, combined with the expert interviews and the desktop research, we then determined whether there was an impact. We didn't say here whether it's positive or negative, but just if there's an impact of this technology on this particular aspect of sustainability.

I will just try to summarize some of the findings again here, but there are many tables. We have discussed all these various aspects, how they are affected, and so on, in the study in much detail. But to just give you again the summary of the conclusion, what we found is that in terms of the influencing factors, remember this was one of the big questions that BGR also had, as if there are regional patterns of influencing factors. What we found was that the highest impact of digital technologies is actually on the economic pillar, increasing economic efficiency and productivity are key drivers of digital transformation. So it's not really that hugely surprising that the economic pillar is strongly affected. Similarly, with the impact on the social pillar, making operations safer is another key driver for digital transformation. So there is a direct impact here as well.

What was a little more surprising was the high impact on the socio-economic pillar. There are different things here: there's automation which leads to perceived or real job losses, that leads to looking at keeping social stability. Some mining companies even mentioned they're not automating everything that's possible because they want to keep the social stability in the region or among the workforce, changing job profiles, building trust with communities through real-time monitoring and publishing the data, network connectivity for communities through the mines. All these things are sort of affecting the socio-economic pillar, just to give you some examples. With the ecological pillar, we saw the least impact compared to the other three, which doesn't mean that it's not considered enough by mining companies. It just means that digital technologies in particular don't have a really strong impact yet on the ecological pillar. The strongest we see here is from environmental monitoring, emissions, water control, and so on. So these sensors for monitoring have the biggest impact on the ecological pillar.

And to summarize, I mean, sustainability has become a matter of ensuring long-term survival for the mining industry, and digital transformation can provide, or digital technology can provide important tools to support these goals. We also looked at what's driving the sustainability agenda in mining companies, and here what we found is that the company values and priorities, so the leadership of the individual companies, really has a very strong impact. Obviously, this is all driven by changing stakeholder expectations and also the desire to attract skilled talent, aside from special geological, climate challenges, and government regulations.

So, so this is actually the slide with the influencing factors. So I was jumping ahead a little bit here, but coming already to the conclusions with regards to the hypothesis. So this is looking at the influencing factors: type of commodity, mining method, company size, size of operation, and geographic region. What we found here, and I've put the hypothesis number two in front of the number one because this is a more specific one, and then I'll finish in a few minutes with the conclusions on the first hypothesis. But the, what we found here is that, interestingly, and maybe different to what was expected in the beginning, what we would find is that digitalization is driven mostly by multi-asset and large corporations with large-scale operations across the globe. And the mining industry is a really global industry. The 40 largest companies are creating the bulk of the revenue of the entire industry. And digital transformation is cost-intensive, so capital-intensive, and leveraging those scalable benefits, getting or getting the ROIs tends to be better in larger operations. And in the end, it's about the business case, and it tends to be better with the size of operation and the budget of larger companies. However, there are some mid-tier corporations that do set benchmarks through agility and cost-effective innovations. We've seen those in Canada and Northern Europe, and also in other places.

Digitalization and automation tend to be more advanced in surface operations, just because of the connectivity issue is not so difficult, and the positioning and navigation autonomously is not so difficult because of available GPS satellite connections and so on. This is different and really remote areas and also in underground operations. So here we saw a sort of a medium influence among the metal mining. There's not much difference in terms of implementing digitalization and sustainability. Gold companies might have a little extra budget to invest in innovation, but overall, there's not really a strong influence. And also the geographic region did not play, based on our analysis, did not play a significant role. It might have specific challenges related to sustainability, but we can't say per se that there are certain clusters like private in Australia, where you have certain technological advances, but you can't say in general that regions are more advanced in sustainability or digitalization. But what we did find was that the company priorities and the strong leadership and commitment of the company management play a huge role in pushing digital transformation and sustainable business practices, and they are some really good benchmark examples from the industry.

Okay, so the final conclusion of the conclusions on hypothesis one, that processes of digitalization and aspects of sustainability are closely linked, and yes, we did find that they are closely linked, even though they're sometimes still discussed separately or often times in many journals, there you have either the sustainability people or the digitalization people discussing change, but in reality, they are strongly interrelated and interdependent. Sustainable business practices have become indispensable for long-term productivity and economic survival, that's been really clearly shown in the study, and digital technologies can be strong enablers for those practices if the priority is set accordingly and the leadership is behind it. Yeah, data and technology available today can have an impact on productivity and sustainability. We've seen those interrelations really clearly, and we think that mining companies could benefit from more consciously intertwining these two objectives to improve results in terms of productivity and sustainability performance, but also the public perception of mining, and there's huge potential in that, we believe.

Okay, so this was my quick run-through of the conclusions and conclusions of the conclusions from the study. And yeah, I hope that you gained some new insights. And yeah, last, last but not least, if you like the presentation, you're interested in digitalization, then I also would like to invite you to see us in November at our Smart Mining Conference online. Thank you.

Thank you, Arty, and thank you, Gudrun, again for these interesting insights of the study. And we shared the links to both parts of the study in the chat, and we also received some questions. So I would say let's directly start with the Q&A session with my dear colleague Iris Wunderlich, Project Leader in Mining and Sustainability at AHK Chile, who was already very active in our chat. So Iris, the floor is yours.

Thank you very much. Thank you very much, Gutrun and Arty, for your presentations. And as Denise mentioned, there were some questions coming up. So Juan just asked in the chat, how did you conclude that the biggest impact is really on management? Can you refer to that question?

Yeah, sure, I can try. It's based on the desktop research and also on what the experts say, but it's really related to the impact on productivity and cost-effectiveness of the operation. And because if you have all the information of the operation in a singular platform, you can visualize, you can plan differently, you can have short interval control, and all these things. It has, from the technology side, in terms of digital technologies, the biggest impact on actually transforming the operation to become more productive and more cost-effective.

Thank you very much. And then we had another question in the Q&A function. Angel asked, how could it be visualized in the future, exposure of mining operations to cyber attacks? So in this question, Angel refers to your mentioning the cybersecurity, etc., in the mining operations.

Yeah, I mean, we do think it's a really big topic. There have been cyber attacks on the mining industry. There have been operational temporary shutdowns due to cyber attacks. So, and obviously, the more digital the operation becomes, the more vulnerable it also becomes to cyber attacks. If everything is integrated into a singular platform and you have the full IIoT and everything is sort of running on tight digital control, then you're obviously hugely viable if there is an attack. So the leadership will have to pay a lot of attention here, and we think this is going to be the key thing in regards to digital transformation that's going to keep the leadership, corporate leadership, awake at night to figure out how to protect a highly digitally connected operation from an attack. And I guess that's also where you have the challenges to find people that are really talented on managing those operations and managing cybersecurity. So that's a whole new field of work field in the mining industry.

Yeah, and data analytics as well, right? Finding the people who can write the appropriate algorithms, how to really get information from the data that can actually inform decision-making. This is a huge challenge. I mean, McKinsey, they have done these estimations that they're only like one to five percent of the data that's available is actually being used to produce information. So obviously, there are huge gains to be made, but you need the people for it.

We have another question. You mentioned that the digitalization is driven by big companies, and we have a specific question on this topic on behalf of Abdul Sattar Rudini. I hope I did not mess it up to pronounce the name, so sorry if I did it wrong. And the question is, small-scale mines cannot afford to invest in digitalization because it involves a lot of money in infrastructure. What are your suggestions for digitized small-scale mining? Do you have any experience on that?

I mean, I don't know exactly what he means when he talks about small-scale mining. I mean, then we have to talk about the degree of mechanization. So, I mean, if we are talking, let's say, a one, two, three assets mining company that has a medium-sized operation that has mechanized equipment, and then there can be cost-effective ways to innovate or to digitalize some aspects of the operation. But of course, you would have to carefully value the cost benefits or business case. And we've seen some really innovative smaller mid-tier, like that's who you would call the mid-tier mining companies. There are also really interesting effects on the really small-scale artisanal mining sector. But what we did see was that there's a potential for a stronger divide between the larger, already large operations that are dominating the industry and the mid-size or mid-medium-sized companies that are lagging behind in the digitalization and will in the future also have be at a greater disadvantage because they are not keeping up with the transformation. And you know, so so there might be an actually widening gap between those who digitalize and who are sort of on the transformative path and those who are not.

Thanks. We just got another question from Juan. Juan asked, did you observe any type of change on the business model side due to the introduction of digital technologies?

Yeah, I mean, one of the things that was interesting was the relationship between OEMs and mining companies. For example, I mean, that's more on the side of the OEMs, but there's a huge issue with data ownership. So who owns the data, for example? So OEMs usually try to now sell data as a service, for example, while the mining companies want to own the data. So they have to negotiate access to the data so the OEM can provide the analysis as a service, but the mining companies want to usually own the data. So these are some of the things that are changing and some of the challenges with the industry. We did see one example where really there's a whole new business model being developed for the mining industry, utilizing digital technology, trying to make community value sort of the central aspect of the company and starting from a platform perspective. We've discussed this in the study, but yeah, we do think that there will be changes also in the business model of mining companies moving forward.

Juan just stated another question. He put in the chat, OEM question mark, Original Equipment Manufacturer, so the large suppliers of the platform solutions and digital technology. Thank you, Arty. And another question, very practical one. I am about to begin to open mining operations. Do you have price on the subject equipment technology? Maybe you don't have the prices out here, I don't know. But maybe you know where to get prices.

I'm sure we could connect him through the German Mining Network to the appropriate industry associations and where he could get quotes from suppliers.

Perfect, thank you. So just go on the website, and then you can contact us via the contact form, and we will then address you to the specific operators or companies who could deliver the prices to you. And a last question from Thomas. You mentioned the big interest in usage of live data and operations. Do you have further details in which kind of processes is the biggest focus for live data and monitoring?

Um, in the study, it was on water management and to have this environmental data on water management sort of published in real time as an asset for community engagement or increasing transparency on the part of the mining company. So that's what we've seen. But I mean, we could also do that for air quality or for biodiversity, you know, data and these kind of things that you can monitor with sensors. Yeah.

Thank you. And well, okay, one more question because it just came in in the chat room. And the question is from Anthony. In many third-world countries, the digitalization will be seen as a big threat due to political pressures to maintain employment and the perception, perhaps true, that this will lead to automation and job losses. Did this political point come through in the studies?

Yeah, I mean, the perceived job loss was one of the challenges that was mentioned by a lot of the experts. What was interesting was that the mining companies that we spoke to, I mean, there was no consensus that something will change and that certain jobs will get lost and that there's a certain challenge of reskilling and upskilling people, so the skill sets will change. But there was generally consensus that the total number of people you would need to operate a mine would not drastically reduce in the next little while. It will change what the people are doing and where they're sitting, like more in an operating room using joysticks rather than on the equipment. But you still need people to do this. So, and I mean, in one case, there was a mining industry, you said a mining company, you said, we don't automate as much as we could because we want to make sure the social stability is kept sort of in the mine. That was in Africa, for example. And so that's really important. Like the companies are really careful in sort of mitigating this risk and this fear. And we did not hear any mining company that says they would, they would sort of in absolute terms reduce jobs. What's interesting is that in some countries like Canada, so you also have the dynamic that a lot of people who are now working in their mines will retire in the next decade, and there might be changes then. They the exact position might not get replaced or refilled, but they might need other people then, like more on data analysts who to come in. And there again, you have the challenge with the talent management to find the right people and to sort of create or ride this wave of change. But yeah, it's certainly a big topic that's being discussed very vividly. Yeah, it's an issue, but we were actually surprised that mining companies are very aware of it, and we couldn't see like that there was the expectation of an absolute job reduction.

Thank you. Now it's really going on in the chat room and in the question and answer session, but I'm looking at the time and we ran out of time. So please, Manuel, and we also have a question from Ramon. And I invite Arty to type your question in the Q&A section and also respond to Ramon via the chat function, because we can't answer the questions now live because we have the practical cases coming up, right, Denise? So thank you very much, Arty. Thank you.

Yeah, you can send me an email. Answer questions, I will try to answer some questions in the chat and yeah, sure. Thanks.

Thank you. Perfect, thank you. Thank you, Iris and Arty. We will come back to you in our next Q&A sessions as well. And thanks a lot to our participants for all the interesting questions. But now, yes, I would like to introduce our next speaker with a topic that was not a focus of the presented study, but which we would like to point out today because of its relevance for the mining industry and because it is strongly linked to current digitalization and sustainability trends. I am talking about blockchain. And for this, I would like to introduce Thomas Riedel, who is leading the digital projects at the Chilean company Transelec, and who will present applied cases in copper mining and its value chain. So Thomas, we look forward to your presentation and I ask you to please share your screen and I give you the word now.

Perfect, thank you so much, Denise. Can you confirm me that you are seeing the screen? Yes, you can see it. Perfect. So, first, thank you to all the organization for this invitation and opportunity to present here in this important event. My name is Thomas Riedel. I work at the Innovation and Digital Transformation Department of Transelec, which is the biggest energy transmission company in Chile. And today I'm here to present you about G-Time technology, blockchain, and pools as an example of an applied case in copper mining and final customer. And I always like to start with the pain. And for this, we have these big trends that you are seeing on the screen, that are nothing new for anybody, but they are for sure pushing the limit in sustainability. We are living a serious climate change that has led to a strong and deep social empowerment, where names like Greta is the best example of that. And that empowerment is demanding more and more new practices and standards for both people and organizations, companies in general. And according to Accenture, 81% of consumers say that they expect to buy more sustainable products over the next five years, and also that they are willing to pay a little bit more for them.

Now, on the side of solutions, we have digital globalization and renewable energies that can help us to work on that line. The mining industry is not apart from this situation. Concepts like green copper are taking more and more relevance every day. And green copper stands not for only use green energy, but also have an integral management to produce copper, including communities, relationships, water, and sustainability practices in general. Looking at some numbers, in 2019, in Chile, more than 50% of energy consumption in mining was electricity, and that number is hoping to double the next five years, according to Cochilco. Now, according to Goldcorp, more than 30% of corporate emissions comes from Scope 2, where energy is considered. So it's there where energy can make a big difference.

Now, this whole scenario leaves us with some questions to be answered. And those questions are: First, how can companies offset their energy consumption? Then, how do we know who is using clean energy nowadays? Third, how can we differentiate our products through sustainability? And finally, how to make visible these sustainable efforts towards the end customers? And that's a really important question because it's from them, from the end customers, where all the social demands that I explained are coming from.

Now, as you may think, some of those answers can come from technology. So now I will talk about that and move on to the solutions part. First, I will explain about G-Time technology, blockchain, and protocol. And I hope you know a little bit about what blockchain is, but in general terms, it's a decentralized way to record transactions and data in general, and a track that data throughout the network where there's no unique owner of that network, so nobody can corrupt it. This particular one, blockchain G-Time, is on a specialized energy blockchain system developed by Fenol, that records the origin of the energy production every 15 minutes through five variables. First, we have the energy, how many kilowatts are being produced. Then we have time, the date and hour of that energy. Then we have the ID of that block of information. Then we have the MAC address to know what device is recording that block. And finally, we have the geolocation to know where it's being produced. So the big difference here is that through this energy vector, we can save the source, the source information, and being able to trace it in space and time. So with this, we know what energy was produced, where, when, and by whom. This allows us to make real-time smart contracts, certification, real-time data visualization, marketplaces, and so on.

Now, you may ask why to choose or to prefer blockchain over another type of traceability. And the answer is quite simple: blockchain is built and made for traceability. I guess you know, but all the cryptocurrencies are built on blockchain networks, so you can imagine the amount of transactions and data happening there. To give you an idea of its potential, now in G-Time blockchain, what do we have? First, measurements from the origin, a decentralized and uncorruptable network, information in real time, and also it acts as a digital notary. Going from one to five, every renewable energy that is produced creates some information measured from the source. That information is incorporated like a block into the, sorry, into the G-Time blockchain, and all those blocks together come together, generating an interconnected and uncorruptable information network that is validated both at the beginning, at the source of generation, and at the destination where it's consumed. So we have both validations. And finally, number five of this network helps us and companies to manage their energy and to visualize it and to have a really well understanding about what energy they are using.

Now let's go to the interesting part that was the technology and the framework that the technology that we are using. But now let's go to applied cases. The first G-Time use was back in 2018 with Codelco and Anglo American, where in the Atacama Desert, Codelco has this plant, is the largest solar thermal plant in Latin America, which since 2013 has been supplying thermal energy to the electrowinning process of Gabriela Mistral Division at that time. And in order to assign that energy and give proof to anybody, any user, any client about the information used to assign that energy to a copper production, Codelco took place as the first approach to G-Time traceability for solar energy. G-Time was then measuring the flow meter of this plant. So Codelco was born like the first Latin American solar traceable traceability platform with blockchain back in 2018. And with that, Codelco was available to ensure and certify to clients like BMW and Mitsui that the copper that they were receiving was clean from an energy perspective.

Then, and now in 2021, we took a bigger step with both. And Pools is a bigger approach of what traceability and certification can be. Pools is a platform made by Transelec jointly with Fenol, who are the developers of the G-Time blockchain. And it's important here to say that Transelec, I said it before, but Transelec is the largest energy transmission company in Chile. So we are connecting Chile from north to south. And it's an important thing to mention because we are a good partner to scale up things like these things like Pools over the nation and even internationally. Now, to explain you really quick what Pools is, I will show you a video that I need to apologize because it's in Spanish, but I am sure that you will.

Still understand the concept behind it. And then I keep explaining. Please let me know if you don't hear the sound.

Persona: [Music] [Music] Is [Music] digital. [Music] Okay, I hope you understood a little bit with the images. But what Pools is, is a tracing and is tracing and registering what energy a company uses. And with that, validate if it's clean and make that traceability towards the products and end customers. So the video is an easy way to understand it towards the end customers.

But going deeper, Pools is the first marketplace of renewable attributes in the country. And we are allowing companies to offset their electricity consumption by acquiring acquiring renewable attributes. And that, of course, works for reportability of emissions with international standards and of emissions. So, uh, our phrase is that now the energy is digital, and we take its pulse.

Now, how does that happen? And I said it before, really quick, but it happened trading renewable attributes in Pools using G-Time smart contracts. I need here to explain really quick that in electricity, the energy itself is apart from the green attribute of that energy. So you can trade them separately. For instance, I can buy electricity from one company, but the green attribute to another company. And I will be still compensating my energy usage from company one with attributes from company two. Okay, so they are two separate things.

Now, how does that happen inside Pools? Every power plant that is generating, uh, one megawatt is recorded on the platform. And that attribute is a tradable thing, tradable and traceable thanks to G-Time technology. So with that, we can make a smart contract and give that attribute to a consumer, to an organization or company that gets the benefits of the traded attribute.

Nowadays, we have more than 600 megawatts of renewable capacity connected. We have nine ongoing up generation plans. We have two industrial clients connected and more than five to connect on the onboarding process from north to south.

And what do you have inside Pools? What, what, what are your products or of Pools? First, you have a general dashboard where you can see all the metrics, your information, your energy management. Here you can trade the attributes, etc. Also, we have a public map for the people to know what companies are with Pools and what companies are compromised with these sustainability, um, topics.

Then we have, uh, digital certifications or digital, um, QR codes in order to validate, uh, whenever you want, in offers, in reports, or in your webpage. I don't know that you are using clean energy. And for the last, my favorite one, the traceability and product labeling. With this specific tool, we are giving the hand back to the end customer, knowing that they are who can make a change in buying preferences. So this is the, the real final value of making traceability of energy in products.

And to summarize, who are we creating value for? The energy sector in general, the power plants, the intermediate clients, or any client that is using energy. Free clients, mining companies, organizations, etc. And of course, I said it before, the final consumer that are buyers and end users interested in sustainability.

Now, as an example, we have our biggest, biggest client is Nexans. I guess you may know, you may know them. They are a global player in the cable industry. And they are providing right now more than 30 countries. And they, in their mission to electrify the future, have also decarbonization plans for their operations. So it's a good example. With them, we are already recording the energy consumption data, I'm starting the the process to trade attributes with one of our connected power plants to be able to label a premium product and give it value. Have been made with clean energies. We do that attaching a QR code to the package. And with that, anybody can access certified information, equivalencies, sustainability metrics, and so on. It is a customizable, um, environment. And so this is a really good example in Nexans for us of a big company who trusted Pools and G-Time technology to make a change, to give more value and differentiate their products toward the clients.

And to finalize, I just want to say that I have been talking all the time about electricity, but electricity is for sure not the limit. And the same concept of measurement and traceability will be needed. It is needed in in general and other industries like transport, water, energies in general, electrolysis, electromobility, storage, and hydrogen, like the main connector to be traced where things like synchronic and granular certifications based on measurements is the future of certifications. We will, we will be needing every time more detail and more specific information to certificate something because green energies will be the energies of the future. So we need more detailed information to certificate them. And so just to say that energy or electricity is not only the unique case, the application case, but this the same system and concept applies to to a lot of things.

And my final, my final, sorry, invitation is for you to join Pools, to use G-Time technology, and take a hand with us on sustainability. So that was a presentation. Thanks for listening, and happy to answer some questions. After one and a half year pandemic, I still can't unmute myself. Well, um, thanks for letting me know. Thank you very much for the presentation, Thomas, and for presenting the practical cases. We indeed have some questions on the chat in the Q&A section. Um, one question on behalf of Ahmed Hassan, and he asked, what is scope 2 that Thomas mentioned while speaking about green copper? Could you please just refer on that?

Perfect. Yes, uh, with emissions, you have three scopes that are categories of emissions. The scope one is coming, the ones coming from the direct and straight operation of a company, and they are responsible of that emissions. The scope two includes energy and third parties or third things emissions that are not controllable one hundred percent, uh, by the company. And for the last, the scope three are completely out of hands of the company where you can find planes, travels, and things like that that, um, still makes a company have emissions, you know, using those services, but they are out of hands of the organizations. So in scope two, you have the energy usage, and if that energy energy creates emissions, they are being included in the scope two emissions of that company. So using green energy, you can attack and reduce your emissions of scope two. That's the, the big difference with between scope one, two, and three.

Thank you, Thomas. And, uh, Lewis asked a question, how much energy does it take to raise all this energy? Really good question. Well, the G-Time blockchain, as I said, is an specialized blockchain for energy. And why we are also using it is because it has less consumption and less effort to to build up the following block than a regular or more known blockchains like Ethereum or other ones. Because those ledgers are so big that it's a hot topic how many energies using Bitcoin and all of that cryptocurrencies. That's why we are using G-Time blockchain. It's a more small and specialized network that uses a really, really low energy to to build the block, the network. So it's not a matter of, of to be to be worried about in this particular case of Pools.

Thank you very much. Um, and we have a very also a very practical question on behalf of Abdullah Smith. So he tells us, I am a solar developer and financer in Ghana and I'm looking at contacting mining companies to propose my company's solution. Do you have any advice on what I should highlight?

Well, very good question. And actually, it's aligned with our value proposition because how it happens, uh, for companies, for solar companies or any energy company, that they need to the regular ways, uh, search and knock doors to make a contract with any client who is using energy. And with Pools, we also are creating this marketplace concept where, um, if you are in Pools, you will have access to a broad amount of companies that are asking for whether energy or renewable attributes. As I said, you can trade them separately, but with Pools, you can connect with those with those demands if you have the offer. And now, answering the straight question, if you want to add more value, and that's our, our proposition, also if you want to add more value to your energy, it's a good to differentiate it also with additional and sustainable products like this one. The energy is more or less a commodity. So if you don't differentiate it, it will be hard for somebody to choose you, um, for other reasons, price. But if you start including things like Pools, traceability, and you give your clients the chance to differentiate also their offer, their products through clean energies, clean labeling, and all that represented, it's a good differentiation for your offer, for sure.

Thank you. Um, and what infrastructure is needed to implement such traceability system? Sorry, what infrastructure is needed to implement such a traceability system?

Good. One of our main values is to measure, to really measure from the source and in the destination. That can be made, um, depending on the technology of the meters existing on sites, by two ways. If the meter has the proper technology, we can, we can ask that a meter remotely and we start to track all that data in our blockchain. And if not, we, and Finial in particular, has developed an IoT device that you install behind the meter and ask it every 15 minutes to send us the information to the blockchain.

Perfect. Thank you. And Stefan from Germany is asking, is cybersecurity an issue with blockchain?

Well, yes and yes, of course it is. But that's why also blockchain is more suitable for these kind of solutions. And it's an uncorruptable and decentralized a way of recording data. So cybersecurity is for for default a more and well managed than a regular network on the internet. So that's actually one of the reasons that we are using blockchain. And I will say that blockchain is more well prepared for prepared for cybersecurity attacks than a regular traditional network. But yes, of course that cybersecurity and cyber attacks are a matter of issue to any kind of network anywhere. But for sure, blockchain is more prepared for that.

Stefan just added the second part and he he wrote in the chat, sorry, the question sounds stupid. Of course it does, but can it be tempered? Can it be hacked and then cause disruption? It does not help to know that the code has been tempered with when the disruption already happened. So, um, he specified his his concern or his question about that.

Yes, well, it's related to what I said. Or I cannot say that it will never or it can never be corrupted because maybe somebody will create a the way to do it. But blockchain by itself is a more secure for that. Now, I don't want to get too too much technical, but let's say that that happened, you should need to corrupt all the nodes of the blockchain at the same time. That's why it makes it make it so secure and difficult to hack because you cannot hack it by one node. As I said, nobody is a unique owner of the network. So you will need to enter and hack all the nodes of the blockchain to corrupt it. Now, if that happened, it's still a way back making the opposite transaction that that cyber attack did. Let's say that they they steal 100, then you can create a 100 back operation that it's not the idea because you change all the blockchains, you you need to change all the previous blocks. So that's why it's secure. But if that happened, you still will have the the way to reverse that operation.

Perfect. Thank you, Thomas. And I'm looking at the time. We're just on time right now. But I think in a Q&A section, there are still two questions open about, uh, Pools, about the certification system you have. And I invite you, Thomas, to have a look at the question from one anonymous attendee and one question about Pools from Ramon. So could you just go to the question and answer section and type your answer in in this section? So thank you very much for being available. Thank you for the presentation. And I will just hand over to Denise again.

Perfect. Thank you. Thank you. Thanks, Thomas. And with this, we come to our last presentation today. And it's a pleasure to welcome Carl Weatherill, Executive Director and CEO at the Canadian Mining Innovation Council. He has over 20 years of experience working at the interface of business, government, and post-secondary institutions nationally and internationally. And he has taken on the challenge to help the Canadian mining sector transform towards zero waste and to rethink mining from outside the box. And now Carl will tell us more about current digitalization challenges and future leading efforts on a global scale. And after this presentation, we will have another Q&A session moderated by Arty. And Carl, um, thank you for joining us today. So please share your screen and start your presentation.

Great. Thank you. Thank you for that kind introduction. Everybody can hear me? The the audio is good? Yes. Awesome. Great. Thank you for the introduction and and and thanks for the opportunity to be here again, um, and talk to the German mining network. It's been really awesome to see the transition from an idea to actually forming this network and doing, um, seminal studies such as this. Um, as was mentioned, we're taking a different look at this. I'm not going to give a case study. And Thomas, that case study you gave was just awesome. We'll have to connect and and see how we can potentially work together, but that was really, really, really critical. So what we do is we're looking more paradigm shift and where we need to go in the future. And I'm going to be talking a little bit about that. Here's some examples. Here's the common challenges. I'm going to refer back to the the work that Arty already presented, which is which is, um, phenomenal and and basically look at if we really want to transform the industry, what do we need to do to do that to get there and focus on a couple of key things. Um, and I am very fortunate to have had, uh, Dr. Adrian Davids, Director, Deloitte, to help with the thought process and and put these slides together. Adrian's one of the top, uh, thought leaders in digital, basically, in the world. So, um, I'll try and do his his thought process justice here.

So just, just a little background so you know who we are, um, as a bit of a reminder. We're a non-profit corporation. Everything we do is defined by the mining, mining industry. This includes suppliers and mining companies. So we're not funded by government, we're funded by the private sector. And we, even though we sit in Canada, we have members and partners around the world in, in a number of countries. And here's a simple little footprint. And, um, in Europe, for example, the the countries where we have partnerships and active projects, uh, include, um, organizations in Sweden, in Austria, in, um, Switzerland, and in the UK. Plus, we we have some affiliations in Chile, Brazil, and Africa, Australia, Canada, and the US. And about more than 50% of our active participants and projects are from outside of Canada, which is really cool. So we're looking at this a little bit differently.

So a little bit about where we're coming from as well, really. And this relates to sustainability. And I want to jump on something that Arty and RD's presentation as well, uh, about sustainability. So our, and and this slide talks a little bit about what Arty was talking about as well. Our focus is to transform the industry to zero waste. So we're looking at longer term, higher order objectives that actually that actually integrate across the mining business, across the the value chain. And the transformation piece is key because this is about cultural shift and paradigm shift. So getting the mining companies, the suppliers, and other actors in the ecosystem to think about a paradigm shift. So for example, um, do we, we turn the question from how do we manage tailings to how do we eliminate tailings? Instead of going for net zero GHG, how do we go to net zero energy? So a little higher, a little higher sort of level. How do we change the platforms of the business? So this whole paradigm shift, and part of this presentation is going to be talking at the end about what's the next paradigm shift we need to do. And and there were references to it, and Thomas, some of your your presentation talked about it as well. And we do this by connecting people. We spend a lot, a lot of time connecting people.

Now, similar to what again, leaning on on the study and what what Arty had said as well, sustainability is not just about environment. You know, it's, it's, it's relatively, in some respects, you could you could address the net zero GHG really quickly, but it's not sustainable in a business perspective. So there are business aspects too. So in the business of mining, for example, this is mining and mining suppliers. There's different types of waste that can occur here, such as design waste, structural waste, process waste, and execution waste. So an example of design waste is, uh, and a colleague, a friend of mine, Andy Reynolds, who who runs a really interesting mining company out of Canada, pointed to this quite a while ago, is the fact that you've got a design for a mine with technology today that's going to be built into the future. And there's not a lot of design agility. So you can actually change and adapt and and bring in new technology, new assets. So there's a bit of a design waste with the industry. And this includes technology. And also at the corporate level, um, structural waste, you know, are we using the the the installed capital base efficiently and effectively? And are we actually getting the value out of that? Mining mines are typically, um, typically designed with an end goal in mind. So the the capacity is typically designed for over capacity versus let's build and meet this capacity and then at the next module, next module, the next module. Another good example of this as well is Dundee Precious Metals. A number of years ago did a pro, a digital project called Taking the Lid Off. And essentially what happened was they looked at their installed capacity, injected the installed capital, capital-based equipment, installed a bit of capital, spent a bit of capital, and their capital intensity, so in other words, what the value we're getting out of our capital increased significantly by a small injection of of money to change the effectiveness of the existing installed base. So capital intensity is really important, especially in the context of digital. Uh, one of the questions was was asked about, um, trying to sell things to to the mining industry. Capital intensity is something to something to consider as well.

And then of course, as process waste and execution waste. Really simple example, process waste, um, a recent project we did, two weeks to do the project, three months to sign the contract to go through the paperwork. So there's simple things like this. And then of course, on the execution side. So in general, in general, with respect to digital adoption, where are we? These are three simple examples from three different companies around the world, different commodities, etc. So in one example, $800,000 a month was saved on energy, energy and water by a company by looking at energy and water consumption across across their their top one operation. I know the company by looking at what the products are in particular markets, etc., increased the revenue by $120 million a year. These are all US numbers, US dollar numbers. And yet another company who saved $20 million a year, uh, looking at their haulage fleets.

Now, an interesting example, again, I said I wasn't going to do specific examples. I'm going to do one here. So for example, a project we had with mining companies looked at haul trucks and, and basically maintenance. Now, the way we did that was we looked at a very, very discreet set of data, two types of oil, the engine oil and the transmission oil, that had maintenance maintenance schedules of 5,000 and 10,000, every 10,000, 5,000 kilometers. The oil oil swapped it. I think it was engine 10,000, transmission 5,000. So what we did was looked at at the oil chemistry. And what we found was two things. What was really interesting? What we found was two things. One is that the the notional 10,000 or kilometer or 5,000 kilometer requirement to change, um, the oils was incorrect. That was just probably coming from the manufacturer. It was actually almost double that. So you didn't have to bring off the trucks to to change the oil, uh, every 10 and 5,000 kilometers, more like, you know, 10 and 20,000 kilometers. So you get a larger reduced maintenance costs, etc., and less downtime, etc. The other really important thing that was found, and this comes down to a common phrase that we hear from miners all the time is, we don't know what we don't know. So in other words, you have this data, or you're taking a look at things, and you don't make those connections that some simple analytics do. And in this case, what we, what we found was there wasn't a synchronization between these different oil changes. So a truck would come off at 5,000 kilometers for transmission, 5,000 for transmission, and then they come at a third time for the engine oil, instead of coming off twice, they came off three times. So by doing this, is really simple analytics project that took two weeks to analyze the data, saved significant amount of maintenance time on on trucks. So it, little things can have large value. There is a lot of potential.

And again, Arty, you talked about this in in your presentations. A couple of key key points I want to make here is, and this this is the one about uncertain outcomes because adoption of digital looking is looking at at a larger, uh, potential impact in the industry. And there's a bit of uncertainty. There's also uncertainty in in the, um, expectation of what are we going to get out of this? There's, there's not, not everybody's really comfortable with what the outcome is going to be. And some of this leads back to what Arty talked about about the management cultural shift because the industry is relatively new to digital, digital adoption. The the update curve is very significant. It's rising fast, but still a little bit behind. The other piece about this too is the systems and data. It's only going to empower being able to make accurate decisions, insights, etc., if the data is accurate, connected, and timely. Bad data is not very good. It's not going to do anybody any good. And you don't really know if the data is bad or if you don't have enough. It's very difficult to make decisions. And at the right time. But the critical thing about this too, is it's got to be converted into knowledge and insights. I'm sure people have seen these these pictures of remote operating centers that are huge with all this data. And one of the challenges with that is that they're not necessarily built with a human being in mind. There's no cognitive analysis of this, cognitive engineering, or even psychological analysis. One of the questions earlier was about small companies can't afford these things, but if you look at it differently, you can. There's an example of a remote operations center that was designed from scratch and built for under $400,000 versus $10 million, looking at it differently, going outside the box and trying new things.

The third piece too, is looking further down the road. As I mentioned when I started, the whole idea of of design waste. When when mining companies are doing this, the intent should be scenario planning, looks at various scenarios by using data, digital twins, etc., to understand the various strategy options in the future, in five to ten years down the road. So you move from a strategic plan that's kind of fixed in stone to flexibility and agility that you have, the ability to to navigate through as the external environment changes. So there's a couple of key things here with respect to the potential and, uh, what we need to focus on.

Now, the reality. And this is a term I use from somebody else. The reality is, and I'm going to use one I've already, one of Arty's slides to to basically lean on this and demonstrate this point, is a lot of the efforts today, the focus is on discrete, discrete data sets, discrete problems, or discrete software tools. So the example of oil and trucks, that was that was a very discreet. Let's take a look at, uh, oil chemistry in haul trucks. And it wasn't connected anywhere up and down the up and down the flowing forward, flowing backwards in the operation. Typically specific problems as well, discrete problems. Can we save water? Right? Versus what's a larger holistic thing look like? And software tools, most software tools are very discreet and can only analyze one or two or three aspects of the business versus all of them, which makes it more challenging. And an example of this, one mining company, um, wanted to take a look at their exploration data and hired a software gaming animation company to actually, you know, let's do something here. And the interesting, um, not conclusion, but what I noticed about this project is that is that that mining company had 12 different software packages looking at the different pieces of exploration data that did not talk to each other. So the software company actually built the middleware to get these, get these different pieces of data to talk to each other. So that data connectivity and the tools to to do that, and looking at the broader system, are basically, uh, major things going in the form going forward.

I'm just reiterating what Arty already said. Right? The McKinsey study of one to 1.5% is being used for decision making now. Why is that? A lot of times it's either not available, it's not timely, the data is not good, or it's not translated into a format that executives or operators can make real good decisions with. So there's a lot of challenge, potential challenges. The flip side of that is with by looking at all of the data, near real-time data, you can actually then decide what's important. So you can reduce the say, 50% of the available data down to something manageable and realistic versus looking at all of it in real time. It's got to do that one step first.

And thank you, Arty, for letting me use this slide. I put it up there because this is really good. It shows where the trends are and what people are doing. But there's one noticeable thing on this, and I wanted to use this slide to demonstrate that point. If you take a look at this, all of these pieces aren't connected. So it's, it's, it, this illustrates as well, the industry's going this way. We're going to do all of these things, but it's doing it in a discrete fashion. And I just pulled these out to demonstrate that point. You know, the connected workforce, the remote operations, etc. They're typically done discreetly in in their own little bubble or in their own digital twin. You have separate digital twins that are not connected. You have a digital twin for a processing plant or even just for a piece of equipment. It's not connected forward and backwards to, for example, the mining system or to the rest of the processing plant. Automated machines, are they connected to the connected workforce? Because there are, there are challenges with, uh, automated machines running around all over site with people and awareness and health and everything else. So it, in the, this challenge of discrete is actually something we're going to focus on.

I just want to throw in digital twins a little bit because what we noticed in a workshop that Adrian Davids actually did for us a couple of years ago, somebody brought up the the digital twin. They mentioned digital twin, and two other people and two other companies had like three people in three different companies had different definitions of digital twin. What does that mean? Now, the industry is getting a little more aligned with that, but when you talk about digital twin, you're going to get nuances on that. So we need to understand exactly what that is. And, and similar to what Arty's slide said, standardization, right? We need that common, this is what it is. Um, I already talked about this, multiple digital twins in a platform, connected in a platform, so they talk to each other. And, and this is, this is absolutely critical because it can't be be doing these things in isolation or discretely. And that's the way it's working now. And that's the way the data sets are doing, and the problems are working, basically, in general.

Now, the other idea behind the the digital twins is that they'll they'll provide the platform for modeling and simulation to explore the system, to look at these different scenarios, future scenarios, and and explore strategy. The what-if scenarios. What if there's a 100-year flood? What if, what if the financial markets crash? What if there's new technology for grinding that reduces energy by this much? What if we we adopt hydrogen fleets in the next five years? What if we we move to small modular reactors in remote areas? So you do these what-ifs and explore the system to see how you can extract value. And this whole modeling and simulation of digital twins will become the driver of mine design. And actually, you might even say that mine design is based on modeling. It will be based on modeling simulation. The challenges of tools to do this don't exist.

A couple of really critical points on digital twins, then I'll get into what's next. Um, on digital twins are basically this top, top diagram is temporal. So in other words, it's past, current, future. It's not just all today, it's past, current, and future. We're taking an existing asset, process, the state it's in in the past, creating a digital model based on that past, updating it to today, and then going forward, you you do the analytics, feeding forward the analytics, basically explore the system to unlock value, unlock value. So let's do a simple discrete example. You've got a, say, a grinding circuit. What if we increase the capacity, uh, past where the nominal value, you know, the metallurgists think it should be? Analyzing the data, feed forward, it says it should do it. Let's feed backwards and try it. And then you update the analytics. Actually, once you start operating, you update the digital model. So it becomes more, more, um, current. It, it, the digital model becomes not, not, um, it's updated, basically. It's updated constantly. So it's a temporal aspect to this. And back to the idea of real time, I like what Arty said about real time for environment, but once you do the first data filtering, you're not necessarily going to need real-time data. Once once you understand what's important, you don't need it in real time. Be data overload. You go back and check it every now and then to check your thesis, uh, and as things change, but you don't need it in real time. And also, I already mentioned this, there's multiple digital twins here. And the key piece of this is that there's layers of data, layers of complexity, and layers of people. What we're suggesting people, I'm sure people are out there thinking you can't do this, it's crazy, but you have to start simply with a simple layer of data, layer of complexity, and add on to it. And at the end of the day, bring in other data flows from outside, such as weather, financial, even geopolitical.

So if we want to move from discrete to integrated system, an integrated system that we're looking into the future, what do we need to do? And this kind of ties in some of the things that, um, that Arty talked about. It aligns really well with the results of the study, the talent, the culture, the innovation, um, and, and it's just up one level. And I'll talk about each one of those in, in a second as well. So basically, three things that we've already talked about. The data, it is going to be the future. It's a matter of how is it stored, who owns it, where is it, can we share it amongst companies? I love that question somebody else had. And it's got to be robust. How much do we need? All these sorts of things. Data trust and, and actually policies, systems. We have to look at the system, not just the discrete piece, but the entire system. And of course, we're also, um, suggesting that we need something that's missing. Other industries already have our open source platforms to actually actually tie in this, tie in the existing digital tools and then adding on to it. Other other customers or other other companies come in and can add on to that. So you get that interoperability and you get that common background or common software platform that is actually built by the industry. The industry being the suppliers as well. And all of this has to relate to stakeholder value. For not providing value for the the stakeholders, then it's not relevant.

So this is, I'm going to try and describe this based on, and this is a slide by Adrian's brilliant, actually, but this is all about people, right? And again, this leans on the study that Arty presented as well. This is about digital transformation, about augmenting human performance. It's not about the technology. So if you take a look, the the, um, value loop, the information value loop, which, uh, currently today, this is how it works with people, right? And there are some challenges with this loop. Data is incomplete. You're making decisions on on incomplete data, inaccurate data, it's incorrect. It comes by at the wrong time. So it's difficult to make these decisions. The whole, and this relates back to the the execution waste as well. Now, the whole, the whole, uh, role of digital is actually to augment this human performance. It's augmenting our capability to make these decisions, to take a look at the data, uh, and, and, and create, uh, new knowledge, etc. And, and it becomes more complete, accurate, in time. And then of course, there's different, different technologies that can go on to this. I talked about data access to data, right? Now, a lot of, in a lot of cases, siloed within industries. People talked about access to that data from remote communities, analytics, all these sorts of things. So it's all about people and, and how we're using that data and how we're making decisions going forward.

And I've only got a few more slides. I know I'm running a little, a little behind. Here's an example of what we've done to take a look at the systems approach. An example of this, and we're doing it at a discrete level, as I said, you can't do it all at once. So at a discrete level, so for example, a lot of mining companies are moving to net zero. And there's lots of options for haul trucks as you move to net zero. You know, going from diesel to LNG, battery electric, hydrogen, and new technologies such as this one here, the B-Hull, for example. The challenge, and this is what we're hearing from the mining companies, there's no methodology or digital tools to actually realistically analyze these options and decide, make decisions in a systematic way at a mine site. And, and this way, you have some companies making decisions may not be based on the proper analysis. So we did, and this is a model that actually Adam Davidson created. What we have actually created that, uh, holistic model of the system to look at the technologies and what's the impact of, uh, for example, this technology on the mining system, not just, you know, what's the NPV, IRR, and all these financial metrics, the capex, and all this sort of stuff, but at a higher level. We've looked at 27 technologies. We're currently working with software vendors to create that middle platform, as I mentioned before. This is the first step, as we see, at the system level. Can we take the models like this and expand it to a larger system? So you go outside of haulage and you add different data layers to this and expand the software platform.

We've also said, we're also pushing open source. The world runs on open source software. So we need the, the industry needs to move to open source. And, and why? It ensures collaboration. Arty talked about this. It's all about collaboration. You can build, uh, better businesses, smarter, make better decisions. You can get the products out the door and develop faster, better, cheaper. The, the edge is 10 times faster, 10 times better, 10 times cheaper technology adoption, which the mining industry is having a challenge with. You can actually accelerate that very quickly because you have a community of people building this stuff and using it and sharing their their experiences and data as well. We're actually doing a lot of data sharing in our projects. Just a simple example with this. If you take a look at automotive, and I'm going back to the study that talks about autonomous fleets and extraction, which it's about equipment, but if you take another industry, look at another industry like automotive, 90, and this is an old data, it's from 2018. Back then, 90% of automotive innovation came from software. What is it in mining? What will it be in mining? And where is it headed? So understanding that means that we've actually got to pay more attention to the software aspect of the business.

So what do we do next? And this is just at a really, really high level to try and spark some thought and discussion is that we've got to create this paradigm shift going from this discrete to this larger system that will include the supply chain. So a paradigm shift on that paradigm shift. And what we mean by, and how we're using data, and how we're doing, um, how we're how we're looking at the mining operations, the system as a complete holistic system. And also, can we use open source to actually actually move some of things forwards and build that platform? Uh, one things we're looking at now is kicking off a strategy workshop that's get people around the table. We've talked a number of companies that are really interested in this, a little bit stuck in how do we do this. So how, and the third thing we're already talking is open source software systems to figure out how to do this. Have you done it? How can we apply it to this? And start working with people outside of the industry. And I added this slide actually, as Arty was talking, a phrase I came up with about five years ago. It's all about people. Innovation happens at the speed of trust. Nothing is going to happen with the people around the table moving into the future and transforming mining unless you get that trust between the people around the table. And as, as Arty, as you said, your your presentation, it's not about technology, it's about the people. And I'll stop right there. My apologies for going over. Thank you.

Thanks, Carl. Thanks a lot. Um, that was that was a lot to digest, I think, but but really nice how it's, uh, how it tied in, um, with my presentation. I'm really glad it kind of got, um, got confirmed, you know, the findings. You participated also in the study as one of the experts that we interviewed, so, um, so that's really great. Um, there's one, uh, question in the in the Q&A that's, iOS and Android operating systems are popular in cell phones. However, there's a huge need to create operating systems for different OEMs to gather information from various machines. Is any effort being made in this field? I mean, you can answer this first. I mean, you know, the Global Mining Guidelines Group, I think this this might be part of it, um, addressing the standardization or, um, the, the open, uh, protocol for communication for machine to machine. But maybe have some more to add to this.

No, absolutely. Thanks for the question. But actually, there's a whole working group that's looking at this, uh, the idea of interoperability. They've actually collapsed two groups together, the Global Mining Guidelines Group, as suppliers, miners around the world, actually addressing this specific question, um, not the operating system, but the protocols for data exchange. The next step is what does the platform look like to do this? So all those data in the same format can come together and be analyzed in in a system on a platform. So absolutely, the work is, is actually been underway for a couple of years now.

Yeah, we're actually, um, our institute is actually part of the group developing the protocol. Um, but I mean, it's, it's really interesting. So are you, um, developing an open source platform with your partner organizations? Maybe you can also talk a little bit, um, for people who are not familiar, you know, how many companies do you have in the network? What does it talk to for the mining companies to actually get them to collaborate? Because you've been sort of paving the way, uh, for for for a decade or more than a decade now. And when we talk about, you know, it's important to collaborate, it's about people and so on, but like, how do we do it? Or what would you tell, you know, miners or suppliers, people who are listening, sort of, um, you know, how do you, how do you get there? You want to innovate, you know, how, how do we get to collaborate?

So I'll answer that question first and go backwards. But basically, CMIC is also a social experiment because it's like people ask, how do you do the social innovation? So the way we do it actually creates that cultural shift, that cultural change. We don't focus on it, it's being done by the way we do things. So, you know, we, we have 12 consortium mining companies and suppliers on the go right now. And there are some of them are around the world. It's getting a little busy. And we're looking at things from surface mining, underground mining, processing, and, and other pieces. Um, how we get people to collaborate is, it's actually really simple. Uh, a lot of it is about collisions, people having collisions. So one example, a workshop, it was Adrian that did this workshop, actually facilitated. We had people in a room, and we had, uh, oil and gas with precious metals, gold companies, we had suppliers, and we had, uh, I had base metal companies as well. And at the end of the workshop, the hard rock miners were saying, we had no idea we had so much in common with oil and gas. We've never spoke to them before. We've never worked with them before. We didn't know you could do this. Let's collaborate. And also by using the design pro, we use the design process a lot. And by using the design process, you break down those biases and get those paradigm shifts, which I'm sure you've seen. So there's, it's, it's the process to get people to collaborate. And we've seen now that a lot of the companies are actually, it's escalating how, how much they want to collaborate. We're getting four to five consortium projects every year with multiple mining companies, multiple suppliers. I think I answered most of the questions. Yeah.

Can, can, um, companies from outside Canada participate? It sounded like international. So, yeah, we have more, yeah, we have more than 50% of the people on our projects are from outside of Canada, Australia, Africa, Europe. Uh, we just signed a contract with a company in Europe last week. Okay.

So I can, uh, openly encourage, uh, people if they, like their presentation of this to something that maybe we're waiting for to find a network to collaborate on innovation to maybe, uh, contact you. Absolutely, absolutely right. Um, you can put your email in the chat. I can also, um, if anybody wants to contact me, I have cards, contacts, so this shouldn't be a problem. But you mentioned, um, a really interesting point also, which is, um, sort of oil and gas and, you know, mining companies talking, uh, with each other, um, looking at outside the industry. I think this is also something that's that's big on your agenda. So you had a look at the automotive and, and is that something that you do in a systematic way to inform also the innovation process with your members?

A lot, a lot of what we're trying to do is encourage the industry to look outside the industry. It's starting to do that now, but by bringing in experts and people speaking from outside the industry to see, this is how we've done it. You know, the example I mentioned near the end was open innovation software platform. So we, we've brought in a speaker and we've introduced that person, the head of that organization, and many people, uh, that build open source platforms to multiple companies in the industry to try and get that paradigm shift. So we, it's not systematic in the way of here's our target to do it, it's here's the challenge, here's how somebody else does it. Can we learn from that? Uh, also to our business model, the business model we have, and, uh, is based on a software engineering company. Has nothing to do with the mining or the natural resources industry. So we're actually introducing it by the way we do things, the design process that actually came from somebody from Germany, actually Robbie Stancil from VCI in Germany. He's the one that brought that in for us. We introduced it to the, the industry at large to get people to think differently about how it's done. And he's done work with Lufthansa, BMW, etc. So we do it. I wouldn't say it's as systematic as it could be. We're being driven by our members to actually get projects going, but we do try and bring these things in as we go. Yeah.

Yeah, really nice. I mean, maybe, you know, this sums it up quite well that we have technical challenges, but we need to change our, our way of how we do things and how we go about attaining them. I also really like the, uh, how you focused on the discrete versus integrated, because this was one of the main outcomes also. I think we still have a pretty long way to go, but it is the way to go to not have the discrete, uh, innovations, but to really look at the more holistic systems approach. Um, but we can also see that it's really complex, right? You have to do the cultural innovation, you have to get the people on board, the right skills, and, and the right technology, and, and pick, you know, the, the right technology. So I think it's really great to, uh, connect to a network. We have, um, the Canadian Mining Innovation Council, we have the German Mining Network, we can also act as a platform to, to connect. So, so in this sense, I would, um, yeah, like to finish off our session by just saying, you know, let's collaborate and innovate. Exactly. Thank you.

Okay. Thanks a lot. Thanks, Carl. So I will hand over to Denise again for the final stretch. Thank you.

Yes, this, um, brings us to the end of the event. And we are really happy that you all joined us today and that you have contributed to an interesting exchange with your questions. So many thanks again to Iris and Arty, as well, and of course, to our speakers. And lastly, I invite you again to get in touch with us. On this slide, you see our contacts as well. And, um, I also would like to to draw attention on the next event, or Arty already mentioned it before, the Smart Mining Conference featuring the German Mining Network and virtual business delegations from Australia, Africa, and Canada. And this year's conference will take place virtually the 17th and 18th of November and focus on Smart Mining in a post-COVID world and key trends for shaping the mining future. I will share the link in the chat for more information. And with this, yes, I say goodbye, and we look forward to hearing from you and seeing you again at one of our upcoming events. Thank you.