Crowdsourcing and open innovation are staring to be recognised within primary industry as effective ways to validate concepts at low risk, solve complex challenges, find new innovative suppliers and automate work. As a consequence, new industrial leaders are emerging with sustainable alternative business models that include crowdsourcing, and they are able to demonstrate the value that it is clearly delivering to the market.
In this post we run through two examples of companies leading the way with crowdsourcing in the extractives industry.
1. The OZ Minerals $1million AUD Explorer Challenge
Modern Australian mining company OZ Minerals and their partner Unearthed Solutions are changing the way the industry thinks about mineral exploration, and the value that can be unlocked by being open with data. Through the Explorer Challenge, OZ Minerals is opening up more than 5 terabytes of their private exploration data, with a $1million AUD prize pool for the crowd to locate new mineral targets.
OZ Minerals is not the first company to run this style of competition. Their point of difference, through the partnership with Unearthed, is making geological data accessible, open and attractive to data scientists in a push to involve more disciplines and approaches in the challenge of finding essential minerals. So what is the history of this approach to exploration prior to the Explorer Challenge?
Back in 1999, former CEO of Goldcorp Rob McEwen attended a lecture at the Massachusetts Institute of Technology about the benefits of employing open source software. Inspired by this framework and the value created by open collaboration, McEwen realised the significant potential for applying this concept in the mining industry. Finding new exploration targets presents a key resources sector challenge that fits this framework.
In 1999, Goldcorp was a $100 million gold mining company, with an under-producing mine, Red Lake. At the same time, it was struggling to find new resources, despite a high calibre exploration team. McEwen became aware that there might be more value locked in the exploration data than his geologists could extract. He released this data to the public, totalling a mere 400MB back in 2000, with a CA$575,000 incentive to review it and identify additional targets. The result? Thousands of submissions from geologists, mathematicians, and physicists that identified an additional $6 billion worth of gold on Goldcorp tenements. The process reduced the potential exploration period by two to three years, and transformed Goldcorp from a struggling junior miner into an industry leader.
The lecture attended by McEwen back in 1999 was presented by the founder of the Linux operating system, Linus Torvalds. If you think you are not familiar with Linux – guess again. Twenty years on from that lecture, every Android phone runs on Linux, and if you have an iPhone instead, almost all webpages and applications operate on Linux. This software has achieved world domination, and it is open.
And Goldcorp? Following the competition, Goldcorp grew the $1 billion worth of gold into a $10 billion company, and is nowadays considered one of the most innovative gold mining companies in the world.
Despite this success it took the industry a long time to look to repeat it. It wasn’t until 2015, when Integra Gold’s innovative CEO, Steve de Jong, launched the Gold Rush challenge, that we saw a similar approach. Integra had recently acquired 2 historic mining properties, along with over 6 terabytes of historical data. Steve realised that this would have taken his team many years to process and interpret in order to predict where the additional gold resources may occur. To speed up this process Integra launched the Goldrush challenge with a $1million CAD incentive for the crowd to work through the large dataset and identify potential new gold targets. The competition cut the process down from many years to a few months.
The OZ Minerals Explorer Challenge is now breaking new ground with Unearthed Solutions to use this approach and build scalable processes and tools for providing data to the crowd, and to provide industry with a clearer, long term path for using crowdsourcing in their workflows.
2. The Newcrest Crowd
Realising the value that crowdsourcing can deliver across the resources industry, Newcrest has positioned itself as a global leader in crowdsourcing. They are the first mining company to employ a global crowdsourcing strategy, enabling them to realise maximum impact.
Accessing digital talent on demand
As demand for digital capabilities and skills continues to grow, it becomes unrealistic to rely solely on internal talent sources, either by upskilling current teams, or hiring and contracting these skill sets into the organisation. Newcrest sought a long-term solution to easily access digital talent on demand and to work with some of the best innovators in the world to identify, develop and implement new solutions for multi-million dollar operational problems.
Gavin Wood, Chief Innovation Officer:
“We have mining business problems and challenges that we’ve been trying to solve for a long time. By putting these out to ‘the crowd’, we can access different thinking and not be constrained by resource or geographic boundaries. This allows us to develop new ideas and solutions in a low-risk and low-cost way, lets our people focus on using their domain expertise and provides opportunities for those who make up the labour force of the future.”
Newcrest worked with Unearthed Solutions to steadily build their strategy to access digital innovators via multiple competitions. Newcrest has provided information, data and tools that clearly articulate and quantify the impact that particular operational problems are causing the business. These well-defined problems and supporting datasets are then presented to the online innovation community through the Newcrest Crowd as a pipeline of ‘challenges’ to be ‘hacked’ for cash prizes and business development opportunities. In combination with their big data platform, Newcrest is minimising the time taken to transition these solutions to production. This will stimulate new opportunities for existing businesses to deliver innovative solutions to Newcrest and others.
Hydrosaver, Newcrest’s first online challenge, was released to Unearthed’s community in February 2018. Newcrest asked innovators to predict the density of a tailings underflow inefficiency at Cadia mine (and, therefore, water content), three hours ahead of time, to enable more efficient recycling of water from the tailings process. Participation was truly global with solutions received from countries including Canada, India, USA, Argentina, China and South Africa. 150 highly skilled individuals formed teams who submitted over 750 predictive models.
Sherief Khorshid and his team from AI tech startup Three Springs Technology took first place in the competition. Following their win, Three Springs signed a contract with Newcrest to implement their solution into production and integrate it with the Newcrest technology stack.
Since Hydrosaver, Newcrest has run four additional crowdsourcing challenges via the Newcrest Crowd ranging from extracting data from exploration photography, to engineering solutions for crushing circuits and safe plant startup processes. Newcrest are continuing to lead the way in crowdsourcing for industrial applications and have rolled out the Newcrest Crowd across their operations.
Who will be the next industrial enterprise to develop a crowdsourcing strategy – what’s your tip?
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