Mining Mindset: Ian Pearce – How Tech Is Changing Mining and What’s Wrong

Anya:
And now joining us is our guest, Ian Pearce, an independent director and advisor. He has extensive experience working with both major corporations and small companies. Ian, go ahead.

Ian Pearce:
Thanks very much, Anya. Good to meet you. When you look at mining, one of the biggest things we’re always managing is uncertainty. It starts with geology. Drilling to identify a deposit often involves wide drill spacings because of the high cost. The challenge is how to use that data to improve control as you move from resource to reserve—the economic position where you determine if you can make money on a deposit.

This has always been the reality of mining, but today, with the digital revolution, there are exciting tools and processes that can redefine how we manage mining businesses.

Anya:
What strategies would you recommend for addressing short-term challenges in operations? For instance, when establishing operations, what should be prioritized to manage these challenges effectively?

Ian Pearce:
In most mining companies, the biggest costs are labor and energy. In the short term, you want to focus on these areas. Develop value driver trees to identify where you can optimize and get the most benefit for your investments. With limited capital, it’s essential to allocate resources effectively.

For example, mining operations are mapped on cost curves by commodity. You want to position your business at the lowest point on the cost curve to ensure resilience through economic cycles. Efficiency is critical. Digital tools can integrate decision-making and automation, replacing manual processes to improve efficiency and reduce costs.

Anya:
You mentioned cost challenges, especially in remote locations. Could you elaborate on ways to address these?

Ian Pearce:
Mines in remote locations face significant costs associated with fly-in-fly-out operations, housing, and transportation. With modern tools, much of this work can be done remotely. This not only reduces costs but also allows you to hire skilled professionals, like data scientists, who prefer urban environments.

For instance, condition monitoring can automate equipment maintenance, allowing remote oversight. By removing labor from the site and employing it in urban areas, companies can improve cost structures significantly.

Anya:
What would you consider the top priority technology for optimizing operations? AI, blockchain, or something else?

Ian Pearce:
I come from a metallurgical background, where improving metal recovery has always been a focus. However, I believe the priority should be upstream—understanding your ore body better. The process plant has limited flexibility, so investing in ore body knowledge, mine planning, and dynamic modeling provides the biggest impact.

For instance, dynamic simulations allow you to test various scenarios to address potential challenges proactively. It’s crucial to understand the ore body to maximize recovery and minimize waste.

Anya:
At K-Mine, we focus on scenario planning and risk management in mining design. For small companies, regulatory compliance is a significant challenge. How should they navigate this?

Ian Pearce:
The post-COVID world has shifted globalization from being purely economic to highly geopolitical. Companies must now address not just local regulations but also the ESG (Environmental, Social, and Governance) expectations of international investors.

Smaller companies often lack the in-house resources that larger ones have. They need to prepare by hiring competent general counsel and engaging specialized consultants to navigate regulations and geopolitical complexities. Proper preparation is key to avoiding pitfalls.

Anya:
With Donald Trump as U.S. President, what impact do you foresee on mining regulations in Canada and internationally?

Ian Pearce:
Financial markets dislike uncertainty, and uncertainty stalls investment. For instance, changes in U.S. energy transition policies could impact capital flows globally, not just in the U.S. Uncertainty around tariffs and supply chains also affects the sector. This lack of clarity hampers companies’ ability to plan and execute effectively.

Anya:
Looking at the Canadian market, what are the key takeaways for companies operating domestically versus internationally?

Ian Pearce:
Operating internationally requires understanding timelines, time zones, and local governance. Companies must have strong leadership in remote operations and reliable financial oversight. Building relationships with local governments and seeking partnerships can help mitigate risks.

Anya:
What are the long-term challenges for companies scaling their operations?

Ian Pearce:
Scaling operations incrementally is more prudent than going big immediately. Mining companies face uncertainties like ore body quality and metal prices. Long-term planning must account for capital-intensive activities like equipment maintenance, mine pushbacks, and exploration. These require flexibility and careful financial management.

Exploration is particularly important—it’s like R&D for a pharmaceutical company. Without ongoing exploration, you risk depleting reserves without replacements.

Anya:
Many exploration companies fail to reach operational stages. What mistakes do they make during capital raising?

Ian Pearce:
A key issue is insufficient capital to fully define projects. Inadequate drilling, poor processing design, and a lack of ESG planning lead to underperformance. Companies must prioritize defining their projects thoroughly before seeking funding.

Anya:
What innovations in mining technology stand out to you?

Ian Pearce:
Technologies like sensors in boreholes, XRF mapping, and machine learning for dynamic modeling are transforming ore body analysis. Real-time data from mining equipment enables better reconciliation with block models, improving accuracy and efficiency.

Anya:
Is there resistance to adopting new technologies in mining?

Ian Pearce:
Yes, mining is a conservative industry. Many practices have been in place for decades, and smaller companies often lack the capacity to explore new technologies. Collaboration and leadership are essential to drive adoption.

Anya:
What about large corporations? They have the budgets but seem hesitant to innovate.

Ian Pearce:
When things are good, companies may lack the urgency to innovate. Leadership needs to create constraints to drive innovation. The focus on quarterly results also makes it challenging to think long-term. However, preparing for 2050 will require new knowledge and approaches.

Anya:
One final question: Does the mining industry significantly impact climate change compared to other sectors?

Ian Pearce:
Rather than focusing on climate change debates, I advocate for an energy transition. Mining is critical for providing the materials needed for this transition. Technologies like microgrids, small nuclear reactors, and renewable energy sources will reshape how we manage energy and reduce environmental impact.

Anya:
Thank you, Ian, for sharing your insights.

Ian Pearce:
Thank you, Anya. It was a pleasure.