Mining innovation

By Fidel Báez Nuñez, Head of Technology and Innovation, Codelco, Chile

Chile is a mining country par excellence with an abundance of valuable metals and minerals such as gold, molybdenum and lithium, but none more important than copper. Chile holds around 30 percent of the world’s copper reserves and is responsible for around one-third of global copper production, making it the world’s largest producer and exporter of the red metal.

Global mining faces tough challenges

But Chile’s mining industry and the global industry as whole are facing a number of tough challenges. Ore deposits are increasingly low grade, complex, and deeper in the ground, making mining operations more technically challenging and costly.

Production costs are soaring. According to a study by the Chilean Copper Commission (Cochilco), since 2005 the cost of producing copper has gone up every year by 10 percent on average. In 2005 the cost of producing a pound of copper was 90 cents but in 2014 these costs rose to 217 cents per pound.

The industry is also facing wage inflation, water shortages, increasingly stringent environmental regulation and rising energy costs associated with the need to haul rocks containing the ore longer distances and to treat and refine more complex, lower-grade deposits.

Codelco: the world’s largest mining operation

The state-owned mining company, Codelco, is the world’s largest mining operation. We are Chile’s main copper producer and its second largest producer of molybdenum, a metallic element used in steel alloys.

Codelco is in the business of exploring, developing, exploiting, processing and commercializing copper and its byproducts. We produce around 10 percent of the world’s annual copper output and own nine percent of global copper reserves.

In 2014, Codelco produced over 1.84 million metric tons of fine copper. We currently employ over 18,000 workers and have operations in underground mining, open-pit mining, mineral processing, smelting, refinery and bio-hydrometallurgy. In our 44-year history, we have contributed over USD115 billion to the Chilean economy.

However, amid rising production costs, a gloomy global copper market and degrading mineral resources, Codelco, like others in the sector, is struggling to remain competitive. 

Reducing operating costs, expanding productivity and improving the safety and occupational health of employees are top priorities.

Innovation is crucial

In our drive to achieve greater sustainability and the highest levels of mining performance, Codelco is investing heavily to expand the production capacity of our aging mines and to find new high-grade deposits. Innovation has a key role to play in achieving these goals. In past decades, technological innovation has enabled us to increase productivity and reduce the risk of injury, and today innovation holds the key to future performance. 

Codelco’s technological innovation and research policy is designed to enable the company to come up with innovative solutions to overcome the challenges thrown-up by our mining activities and for which no market solutions are available. Every year we invest around USD100 million to develop cutting-edge technologies and to ensure our mining operations are world class. Our aim is to be at the forefront of mining technology. This will enable us to boost productivity, enhance worker safety, safeguard the environment and remain competitive.

Global demand for minerals and metals continues to increase – a two percent annual growth in demand means that current production has to double every 38 years. In order to meet this demand, we need to find new, more effective ways to identify and exploit the Earth’s reserves. As mines age, these reserves are becoming increasingly difficult to exploit, adding greater impetus to the innovation imperative that is driving the search for technological solutions. 

Smart mining technologies: the way forward

Codelco’s innovation strategy involves transferring and adapting existing technologies and developing new ones to address the challenges confronting each of the company’s eight mining and processing operations (Andina, Chuquicamata, El Teniente, Gabriela Mistral, Ministro Hales, Radomiro Tomic, Salvador and Ventanas).

In recent years Codelco has been focusing on developing smart mining technologies for use at every stage of the production process, from extraction at the mine site to the production of cathodes used in a wide variety of electrical and electronic goods and systems.

These technologies are helping us to improve productivity and operational efficiency and to make significant cost savings. Tele-robotic mining, for example, using remote-controlled robotic machinery to extract minerals is reducing the risks for miners. We are using robots at our Gabriela Mistral mine in Antofagasta to inspect equipment to improve the efficiency of our maintenance services. The haul trucks used there are also completely autonomous. New digital technologies are also allowing us to achieve higher levels of integration and automation of processing operations and to manage them remotely.

IP is central to Codelco’s innovation strategy

 In tackling new mining and metallurgical challenges, the company has pioneered many new technologies which we protect with patents. Intellectual property (IP) is extremely relevant to Codelco’s research and development activities.

The company’s IP strategy is applied in three main areas.

First, it plays a role in developing prototype mining equipment. We establish agreements with commercial suppliers to build prototypes which, once validated, are incorporated into our production processes. Within the framework of these agreements we transfer our IP to our commercial partner to optimize product development.

Second, Codelco protects with patents the technologies that it develops. So far Codelco has submitted 250 national and international patent applications, of which 134 have been granted in Chile and 21 in other countries. The company is among the top Chilean mining companies in its use of the patent system.

Codelco’s first patent, granted in 1978, was for the Teniente Converter, an energy-efficient furnace that is capable of melting and converting copper concentrate. Over the years we have significantly improved the converter’s performance and it is now used by mining companies in Chile, Mexico, Peru, Thailand and Zambia. We also hold patents on many mining processes, including, for example, bioleaching – where micro-organisms are used for low-cost and efficient extraction of copper from low-grade sulfide minerals.

Third, IP plays an important role in the context of the network of alliances we are building with different companies, research centers and universities to develop innovative, high-performance solutions in line with our strategic goals. Ten such alliances have been established so far. 

Boosting IP awareness among employees

In collaboration with the National Institute of Intellectual Property (INAPI) and the Institute for Innovation on Mining and Metallurgy (IM2), we are also initiating a plan to boost IP awareness across the corporation. The aim is to promote a deeper understanding of the impact that IP has on our activities and our bottom line, and why it is important to effectively protect and manage the company’s own IP assets and to respect those of third parties. Within the context of this initiative, we are also establishing a specialized IP unit at IM2’s office to offer IP-related advice and consultancy services.

Innovation is at the core of Codelco’s plans for the future. Only by leveraging cutting-edge technologies and developing new ones will it be possible for the company to meet its strategic objectives with any success.