Mines by nature have limited life spans. Companies are continuously competing for fewer mineral deposits, of lower grades, which are more difficult to reach and more complex to mine. This, in addition to high operating costs, high shareholder expectations, uncertainty regarding mining rights and infrastructure constraints, means that the mining industry must constantly develop, acquire or adapt innovative technologies to ensure their sustainability.

“In this current economic reality, and with competition so tight, innovation is more important than ever,” says Sipho Nkosi, Chief Executive Officer of Exxaro Resources, one of South Africa’s largest black-empowered diversified resources companies. “The rate and scale of change is rapid. World knowledge doubles every five years. If you are not at the cutting edge of technology, you are not going to survive.” The development of innovative technologies has been a key strategy in the group’s history of identifying growth opportunities and adding value, and has influenced decisions to maintain aresearch and development division when others were reducing the scope and scale of their R&D.

Over the last two years Exxaro has been working on a programme to make blue sky innovation part of the group’s DNA. The “Internalising Systematic Innovation” programme will broaden the company’s technology strategy and innovation programme to work streams as diverse as Services, Human Resources, Supply Chain, Information Management, and SHEC. Blank Canvas International, an innovation and sustainability consultancy, was appointed to help Exxaro meet these expectations.

“We’ve defined exactly what innovation means to us at Exxaro,” says Ernst Venter, Executive Head: Growth, Technology and Services, “and we’ve developed a systematic process and supporting infrastructure which enables employees to log and evaluate ideas, develop a compelling business case and if proven, add them to our project pipeline, which is itself guided by our 10-step technology strategy development process that ensures projects support Exxaro’s business goals.” The company has a number of breakthrough innovations about to become commercial operations. Nkosi believes they’ll contribute significantly to the group’s strategic goal of achieving a $20bn market capitalisation by 2020, and its vision of contributing to the development of Southern Africa. The Ultra High Dense Medium Separation processing technology provides a solution to the challenge of declining ore qualities and the limitations of existing technologies by improving resource utilisation and increasing life of mine.  

Exxaro’s AlloystreamTM team is commercialising a new smelting process with a manganese partner using coal fines. It’s the first new manganese smelting process innovation in the industry in nearly 80 years. Proving that innovation is not necessarily a quick thing, as it took 18 years of testing, but the benefits are worth the wait. They include a 1-step steel smelting process, life of mine extensions and energy savings of up to half the costs of a traditional smelter. Exxaro’s diversification strategy has extended outside the mining industry to the field of cleaner energy. As a coal producer, and intensive energy user, Exxaro plays a significant role in the energy environment in South Africa. Over the last six years, Exxaro has addressed three issues that have become central to this environment, namely energy security, economic productivity and environmental impact, including climate change, land and water usage and carbon emissions. A major achievement of the group’s energy strategy has been the formation of a company aimed at generating power via a mix of renewable and cleaner energy sources. Cennergi was launched in April 2012 as a joint venture with Tata Power of India. Exxaro also recently announced a deal with US pigment manufacturer, Tronox, to form the world’s first vertically integrated mineral sands processing and pigment company.

The group’s future mine programme was kicked off in 2012 on the back of the innovation culture drive. Under the guidance of senior functional coaches, a group of young professionals was tasked with defining technology focus areas for Exxaro and aligning them to the group’s commodity strategy for 2020, 2030 and 2050 horizons. They conducted local and global research, performed benchmarking visits to companies around the world and attended numerous conferences in their quest to identify innovative opportunities and development initiatives which Exxaro could pursue in the future. “The project has managed to articulate a future mine conceptual design for 2030, that will enable Exxaro to develop a roadmap on how we should be planning for, designing and building future mines and businesses,” says Venter. “It is entirely about sustainability and, we believe, will give us a competitive advantage in the future with regard to our environmental performance, technology use, and employee development opportunities.”

The group’s innovation efforts were recognised last year when CEO, Sipho Nkosi, was awarded the Frost & Sullivan 2012 Growth Innovation Leadership Award for his commitment and dedication to building a greater sustainable mining industry, while continuing to drive and lead South Africa into the future as a major world market. The group’s position in the list of top 10 mining companies globally for highest total shareholder returns in the period 2001-2011, as announced by the Boston Consulting Group recently, is another acknowledgement of Exxaro’sachievements.