Smaller suppliers more invested in innovation
Failure to win funding from Canada’s Supercluster Initiative and phase two funding for the Ultra Deep Mining Network has led to a downsizing of the Centre for Excellence in Mining Innovation (CEMI), but the strategy of working with small and medium enterprises (SMEs) to spur innovation remains a core priority for the Sudbury-based organization.
“The objective of using government funding has to be to build the Canadian economy and we believe that working with the supply and service sector is the best way to do that,” said Doug Morrison, CEMI’s president and CEO.
“We know that there are three jobs in the supply and service sector for every direct job in the mines and with automation and other changes that are happening, that ratio is going to increase. The largest single component of the mining sector is not the mining companies. The largest component of the mining sector is the supply and service companies. That’s our focus and it’s going to remain our focus.”
According to Morrison, it’s the small, Canadian-based mining suppliers the mining industry needs to rely on for innovation and that government needs to support – not the large, global OEMs.
“Mining companies have a preference for working with the large OEMs because they’ve relied on them for so many years, but the large OEMs are continuing to do what they’ve been doing. They’re not necessarily interested in developing a new way to do it better because they’re making a nice profit with their current technology and product lines. They say they’re innovative, but they’re more interested in incremental changes to their existing products.”
Morrison cites RDH, a Sudbury-area supplier that was the first company to introduce battery electric technology to the mining industry.
“RDH (now RDH-Scharf since its acquisition by Germany’s SMT Scharf Group) went way out on the limb to develop battery-electric underground equipment and only then did the large OEMs come in and start to fall in line.”
But most small and medium sized enterprises need help to make the leap from research to commercialization, said Morrison, who calls the space between the two “the Valley of Death” because so many companies fail to make it to the other side.
“They need help with marketing, intellectual property protection and all the other components required for successful commercialization of a new product or service.”
Innovation is crucial for Canadian SMEs because they have an advantage if they are able to offer an innovative product or service that a mining company can’t buy from an established vendor or OEM, said Morrison.
SMEs with innovative products and services are also more easily able to penetrate export markets, but there again, they need help.
“It’s really difficult for small companies to expand globally,” said Morrison. One promising strategy though is to collaborate with SMEs in other countries.
Cold calling a mining company in Chile or Australia is very difficult for a small Sudbury-based company, but linking up with an SME overseas that already has the necessary relationships is a much easier way to go, he said. The same applies for SMEs in other jurisdictions trying to break into the Canadian market.
“That way, SMEs are not carrying the burden of opening an office in another jurisdiction. There’s more business to be gained by working collaboratively than by competing head to head because it’s a global business and we have to be thinking much more globally than we have in the past.”
The Ultra Deep Mining Network which CEMI ran for five years was an excellent model to emulate, said Morrison.
“It was very successful and expanded the business of several participants in the program. That kind of collaborative network is the best way to move innovation forward and to help companies learn from each other.
“We saw business relationships develop between members of the network. They talked to each other and found opportunities for synergy that they wouldn’t have found otherwise.”
Research itself is only of value if it results in something tangible, said Morrison.
“It’s not about how much money you have. It’s about how you focus those expenditures. You can spend money on research until you’re blue in the face, but it doesn’t automatically lead to a commercial product or service.”
CEMI is down to four full-time and two part-time staff, but is able to draw on consultants as needed for specific projects.
It currently has a contract with Natural Resources Canada to assist with the Crush It Challenge and is pursuing other funding through FedNor, the Canadian government’s economic development agency for Northern Ontario.
Relying on external funding sources to stimulate and commercialize innovations necessary to address some of Canada’s and the world’s major mining challenges is itself a challenge, but one that CEMI is determined to overcome.
