Transforming exploration - Sykes et al - Sep 2016 - Centre for Exploration Targeting / The University of Western Australia

TRANSFORMING
THE FUTURE OF
MINERALS
EXPLORATION
John P. Sykes, MAusIMM 1,2, Allan Trench, FAusIMM 1,3,4, T. Campbell McCuaig, MAusIMM 1,5,
Tim Craske 6, Joe Dwyer 7, Naren Subramaniam 3,8,Siobhan Sullivan 9,10,† & Will Turner11
1. Centre for Exploration Targeting, The University of Western Australia
2. Greenfields Research Ltd., United Kingdom
3. Business School, The University of Western
4. CRU Group Ltd., United Kingdom
5. BHP Billiton plc., Australia
6. Thinkercafe, Geowisdom Pty Ltd., Australia
7. HiSeis Pty Ltd., Australia
8. Transmin Pty Ltd., Australia
9. School of Plant Biology, The University of Western Australia
10. Botanic Gardens and Parks Authority of Western Australia
11. Independent Geological Consultant, Australia
† Today’s presenter
6 September 2016
AusIMM New Zealand Branch Conference: Wellington, New Zealand

TRANSFORMING THE FUTURE OF MINERALS EXPLORATION
What is the future of minerals exploration?
• What will we be exploring for?
• Where will we be exploring?
• How will we be exploring?
• Who will be doing the exploring?
• Who will pay for the exploration?
• In summary, what is the future, high-level
‘strategic’ approach to exploration?
6 Sept 2016
AusIMM New Zealand Branch Conference, Wellington, New ZealandSlide 2 of 32

The future of minerals exploration scenarios
6 Sept 2016
AusIMM New Zealand Branch Conference, Wellington, New Zealand
Literaturereviewandconceptualplanning
•Undertakenthroughout2013-4
•Oneresearcher:JohnSykes
•PublishedatSEGAnnualConferenceinOctober2014
•Reference:Sykes&Trench(2014a)
•Focusonunderstandinglongtermperspectivesonthemining
industrywithscenarioplanningattheemergenttoolforproblem
solving
Group scenario planning
trial
• Workshop in early June 2016
• Deductive and inductive
approach
• Three researchers: John
Sykes, Allan Trench &
Campbell McCuaig
• Six participants: All CET PhD
students
• To be published at the World
Renewable Energy Congress in
February 2017
• Reference: Sykes et al. (2017)
• Emergent focus on the energy
transition
Individual scenario
planning trial
• Undertaken throughout 2015
• Deductive approach
• Two researcher participants:
John Sykes & Allan Trench
• Published at AusIMM
International Mine Management
Conference in August 2016
• Reference: Sykes & Trench
(2016)
• Emergent focus on mineral
economic cycles over time
Expert scenario planning
workshop 1
• Workshop in mid-June 2016
approach, with emergent
transformative approach
Campbell McCuaig
• Nineteen participants: Experts
in exploration, mining,
renewables, commerce and
environment from industry and
academia
• Four guest speakers: Mining
law, history, economic geology
and sustainability
• Published at AusIMM New
Zealand Branch Conference in
September 2016
• Reference: Sykes et al. (2016)
• Emergent focus on technology,
skills and social licence
STAGE 1
STAGE 2
STAGE 3
STAGE 4
Expert scenario planning
workshop 2
• Workshop in late-June 2016
approach
Campbell McCuaig
• Twenty-four participants:
Experts in exploration, mining,
commerce, environment and
society from industry and
academia
• Four guest speakers: Mining
technology, indigenous
relations, Asian commerce and
leadership
• Yet to be published (planned
2016-17).
• Focus on synthesizing the
previous workshops
STAGE 0
Synthesis&communication
(planned2016-17)
STAGE 5
THIS PRESENTATION
Slide 3 of 32

THE TRADITIONAL APPROACH:
‘SMALL’ EXPLORATION
6 Sept 2016

Business strategy is traditionally ‘rationalist’
MOVES TOWARDS A GOAL:
• Traditional ‘rationalist’ strategy;
• Focused on ‘predicting and controlling’ the
‘transactional environment’ e.g. competitors,
suppliers, regulators, investors;
• Objective – there is a ‘best’ strategy, which can
be worked out with enough analysis and then
pursued;
• Military & sporting analogies – reflecting
interaction with transactional environment e.g.
competition, supply chains;
• Mechanical & machine analogies – reflecting
objective, predictive approach.
6 Sept 2016
COMPANY
TRANSACTIONAL
ENVIRONMENT
Competitors Investors
NGOs
Regulators
Suppliers
Clients
Employees
Based on: Van der Heijden, 2005; Ramirez & Van der Heijden, 2007; Ramirez & Wilkinson, 2016
Slide 5 of 32

Traditional exploration strategy also rationalist
MOVES TOWARDS A GOAL:
• Conceptually also a rationalist ‘traditional business
strategy’;
• Moving out across the world and finding new ore
deposits;
• Whilst also beating your rivals to the prize – as
there are objectively better places to explore;
• Aim is predict where the best deposits will be &
gain control of the land, then detect the deposit;
• The transactional environment covers the whole
world – it’s just a matter of getting there;
• Also known as ‘small’ exploration.
6 Sept 2016
Based on: Van der Heijden, 2005; Ramirez & Van der Heijden, 2007; Ramirez & Wilkinson, 2016; Trench, 2016
EXPLORER
TRANSACTIONAL
ENVIRONMENT
Competitors
InvestorsNGOs
Regulators
Suppliers
Mineral deposits
Employees
Slide 6 of 32

New technology & skills to predict & control
• Exploration is technology and skills
focused;
• Traditionally used to open up the
‘transactional environment’;
• Aim of finding new deposits before
competitors;
• Mitigates increasing maturity of
exploration ‘search space’;
• A ‘rationalist’ approach – predict
and control;
• The scenarios workshop initially
started out in this mindset focused
on technology.
6 Sept 2016
Workshop photo courtesy of Will Turner
Slide 7 of 32

THE CURRENT APPROACH:
‘SHRINKING’ EXPLORATION
6 Sept 2016

Business strategy has since ‘evolved’
MOVES AWAY FROM CONSTRAINTS:
• Reaction to the traditional ‘rationalist’ approach;
• The world is big, fast-changing, complex and
inherently unpredictable;
• Key strategic constraints impact from the
‘contextual environment’ (e.g. economics,
politics, society, environment) outside of the
influence of the ‘transactional environment’;
• Transactional environment seems to be
shrinking – can lead to strategic paralysis;
• Emergent – strategy is only recognised
retrospectively, from multiple small decisions;
• Ecological, adaptive & systems analogies.
6 Sept 2016
TRANSACTIONAL
ENVIRONMENT
COMPANY
CONTEXTUAL
ENVIRONMENT
Geo-politics
Finance Commerce
Economics Legislation
Demography
Ecology
Technology
Slide 9 of 32

Broken promises and confused perceptions
• Exploration increasingly affected by the
‘contextual environment’;
• Financial (affecting funding),
environmental and socio-political
(affecting access) issues now much more
important;
• Exploration and mining suffers from poor or
mixed perceptions;
• Not helped by a track-record of broken
promises – financial, environmental and
socio-political;
• Reduced support for exploration from
financiers, employees and communities;
• Social licence and commercial licence to
operate under threat (Andrews et al., 2016).
6 Sept 2016
Why the wealth of
Africa does not make
Africans wealthy
- CNN, 22 April 2016
BHP, Vale joint
venture boss in Brazil
‘environmental crime’
probe
- The Australian, 14 July 2016
Junior explorers under
pressure as commodity
price malaise deepens
- Sydney Morning Herald,
27 Sept 2015
One in three
geologists
unemployed or
underemployed
- ABC, 16 Feb 2015
Slide 10 of 32

Exploration has ‘evolved’ but is ‘shrinking’
MOVES AWAY FROM CONSTRAINTS:
• Unplanned reaction to a bigger, fast-changing,
complex and inherently unpredictable world;
• Traditional ‘rationalist’ approach impossible as
too many important ‘contextual environment’
constraints are beyond explorers control;
• Transactional environment (and places to
explore) seems to be shrinking;
• Different rules and contexts around the world
means explorers have to re-learn the strategic
environment every time they go somewhere new;
• Exploration is paralysed by the complex,
shrinking transactional environment.
6 Sept 2016
TRANSACTIONAL
ENVIRONMENT
EXPLORER
CONTEXTUAL
ENVIRONMENT
Geo-politics
Finance Commerce
Demography
Ecology
Technology
Slide 11 of 32

THE CAPABILITIES APPROACH:
TOWARDS ‘BIG’ EXPLORATION
6 Sept 2016

A strategic middle way can be charted
AIMS TO UNCONSTRAIN A KEY PART OF THE
STRATEGIC ENVIRONMENT:
• Known as ‘processual’ strategy, based on internal
capabilities;
• Aim is to reclaim part of the contextual
environment by extending your transactional
environment – both evolutionary and ‘controlling’;
• Key strategic skills are perception, institutional
memory and adaption (i.e. learning
organisations) – diversity is key;
• Scenario planning is an important strategic tool;
• Analogous to living organisms – adapting and
specialising in each new environment.
6 Sept 2016
TRANSACTIONAL
ENVIRONMENT
COMPANY
CONTEXTUAL
ENVIRONMENT
Geo-politics
Finance Commerce
Demography
Ecology
Technology
Slide 13 of 32

Is there a middle way for exploration?
AIMING TO UNCONSTRAIN AREAS WE CURRENTLY
CANNOT EXPLORE:
• Build appropriate processes and capabilities in
exploration companies / teams;
• Turn the key challenges into new opportunities;
• Currently ‘constrained’ areas for exploration (both
physical and conceptual) are the next ‘new’ search
spaces;
• Diverse, adaptive, learning teams / companies that
can operate in many ‘new’ environments;
• Scenario planning could be a useful tool for
learning how to understand and respond to new
exploration environments and ‘search spaces’.
6 Sept 2016
Based on: Van der Heijden, 2005; Ramirez & Van
der Heijden, 2007; Ramirez & Wilkinson, 2016
TRANSACTIONAL
ENVIRONMENT
COMPANY
CONTEXTUAL
ENVIRONMENT
Geo-politics
Finance Commerce
Demography
Ecology
Technology
Slide 14 of 32

Technology & skills are influenced by context
• Technology and technical skills sometimes
seen as of limited use in tackling the ‘non-
technical’ challenges facing exploration;
• However, technology and skills do not exist in
a vacuum – they interact with society;
• Exploration technology and skills (in the
transactional environment) are thus
influenced by the contextual environment;
• Other industries have effectively used
technology and skills to improve the industry
social and commercial licence:
– Reduce impact on society;
– Resolve societal / environmental problems;
– Increase economic / social well-being;
– Attract ‘talent’ to the industry;
– Provide better returns to financiers.
6 Sept 2016
Slide 15 of 32

Can technology & skills improve our reputation?
• Aim of the scenarios workshop emerged as:
– to investigate the interaction of technology
and skills in exploration and mining with
wider society;
• The key question was:
– Can technology and skills be used to
improve exploration industry reputation,
support and access, by targeting
economically viable, yet socio-politically
and environmental acceptable deposits?
• Such an approach could:
– Reduce exploration’s impact on society;
– Resolve societal / environmental problems;
– Increase economic / social well-being;
– Attract ‘talent’ to exploration;
– Provide better returns to financiers from
exploration.
6 Sept 2016
Slide 16 of 32

THE SCENARIOS: TECHNOLOGY,
SKILLS AND SOCIETAL SUPPORT
6 Sept 2016

A Tale of Two Peoples: Trapped in a Cycle
• Starting from a divided society:
– Wealthy, educated urban elite;
– Poor & uneducated in regions working in primary industries;
– Mining & exploration professionals are part of the urban elite;
• The elites control society and resources:
– Use technological sophistication and education to control societies
resources, inc. mines;
– Resources extracted at lowest cost possible to provide cheap goods for
urban elite;
– Mining and undesirable activities occur away from the urban elite,
impacting only on the regional poor;
• The division leads to revolution:
– Eventually the regional poor rise up and take control;
– Mining industries and financiers are destroyed;
– Employees are endangered;
• The cycle begins again:
– The regional poor have to resort to artisanal mining;
– Eventually, technology advances and a new elite emerges…
• An “extractionist” society:
– Society focused on extracting existing resources, rather than
discovering new resources;
– Malthusian – Fighting over ‘limited’ resources
– Akin to “The Hunger Games”.
6 Sept 2016
Image: The Hunger Games
Slide 18 of 32

iWorld: Breaking the Cycle
• Starting from an open society:
– Open use of technology and innovation;
– Global collaborative projects and research;
– Global democratic institutions;
– A positive feedback loop is created with technology and innovation driving
wealth creation and distribution;
– Society becomes wealthier, more educated and technologically
sophisticated as one;
• The mining industry is a key part of society:
– The mining industry benefits from the technological; sophistication and
innovation;
– Mining is simultaneously more profitable, safer and with a reduced
environmental and socio-political footprint;
– Mining is an important, sophisticated industry able to attract the best talent;
– Mining links local operations with global ambitions so is a key part of the
socio-economic ladder – everyone has a chance to succeed;
• Humanity rises to new highs:
– A global, united, open, sophisticated society is able to take on colossal
projects, perhaps even conquering space… [where mining is also key]
• An “explorationist” society:
– Society focused on discovering and developing resources;
– Human ingenuity is essentially infinite, so global resources are also seen
as infinite;
– Akin to “Star Trek”.
6 Sept 2016
Image: Star Trek
Slide 19 of 32

Towards ‘BIG’ exploration
• Capabilities required for the “Two Peoples” scenario:
– Ability to communicate and work with different local
communities, across a differing and fractionated world;
– Ability to locally adapt technologies and innovations as new
ideas do not travel across a divided society;
• Capabilities required for the “iWorld” scenario:
– Ability to collaborate at a global-level with multiple
government, industry and academic stakeholders;
– Ability to adopt fast-evolving new technologies and
innovations which sweep across an open access world;
6 Sept 2016
Both scenarios are fantastical, but contain important lessons for the exploration industry:
• Strategically sophisticated explorers are able to operate in both, recognise which environment they are in, and apply the relevant capabilities;
• This is the process or capability orientated strategic approach to the future of exploration;
• Explorers can generate extra ‘shared’ value for society and their corporate owners:
– Via minerals discovery (aka ‘small’ exploration); but also:
– As technology and innovation ‘hot houses’ using the small, focused, fast-moving, adaptive teams typical of the exploration industry;
– As first contact with key stakeholders be these local communities, or local, national or international government;
This is ‘BIG’ exploration (Trench, 2016)
Slide 20 of 32

THE NEXT STEP:
TRANSFORMATIVE EXPLORATION
6 Sept 2016

Even the best are vulnerable to collective liability
• An explorer’s [or miner’s] reputation [its social and commercial licence],
however, is affected by the ‘broken promises’ of every player in the industry
and the industry as a whole;
• When environmental disaster, social injustice, financial failure or employee
negligence occurs everyone in the industry finds their reputation damaged
and their social and commercial licence diminished;
• As such, even ‘best practice’ BIG explorers would remain vulnerable to
collective industry liability over ‘broken promises’ – their access to new
opportunities would be as diminished as everyone elses;
• Therefore there is a need to move forward together as an exploration
industry – together doing BIG exploration;
• At this stage the workshop began to progress from simply a strategic scenario
planning workshop [generating outputs useful to individual exploration teams
and companies] to transformative scenario planning [aimed at changing the
exploration industry as a whole for the better].
6 Sept 2016
Influenced by: Kahane, 2012a, 2012b
Slide 22 of 32

Overcoming collective vulnerability
• The two scenarios are linked:
• “iWorld” is what happens when the cycle trapping us in the
“Two peoples” scenario is broken;
• The “iWorld” scenario is clearly preferable;
• In the “Two peoples” scenario ‘small’ exploration would be
the default strategy;
• The aim should be for explorers to move from the “Two
peoples” scenario to the “iWorld” scenario – this is done via
‘BIG’ exploration;
• However, due to the collective liability of ‘broken promises’
all explorers must move towards ‘BIG’ exploration;
• Otherwise we will be dragged back to ‘small’ exploration
and the “Two peoples” scenario;
• Collective ‘BIG’ exploration becomes ‘TRANFORMATIVE’
exploration involving the whole industry.
6 Sept 2016
A Tale of Two Peoples
“Trapped in a cycle”
iWorld
“Breaking the cycle”
Slide 23 of 32

Towards ‘TRANSFORMATIVE’ exploration
Local “Two Peoples” scenario
Local “iWorld” scenario
6 Sept 2016
Both scenarios exist at different places and times in the present world
‘Small’ exploration ‘BIG’ exploration
Global “iWorld”
‘Small’ exploration ‘BIG’ exploration
Collective ‘BIG’ exploration aka ‘TRANSFORMATIVE exploration
Slide 24 of 32

But how?
• Collective ‘TRANSFORMATIVE’ response to shrinking exploration
opportunities is the only way to mitigate the collective liability of ‘broken
promises’;
• Additional skills likely to be required by explorers:
– Technology adoption and adaption;
– Major global collaboration and local authenticity;
• Areas of knowledge required by a future explorer:
– Focused knowledge (of exploration);
– Inter-disciplinary knowledge of the technical and non-technical aspects of
mining (the ‘transactional environment’)
– Broad knowledge of the world beyond mining (the ‘contextual
environment’)
– The ability to connect all of this together (systems and scenario thinking)
• We need to train exploration professionals more broadly and create
broader skilled, more diverse exploration teams;
• This will require the efforts of individuals, companies, educators and
professional organisations: How can the AusIMM help?
6 Sept 2016
Focused
Knowledge
Inter-disciplinary
Knowledge
Broad
Knowledge
Systemic
Thinking
Source: Sykes & Trench, 2014b
Slide 25 of 32

CONCLUSIONS
6 Sept 2016

TRANSFORMING EXPLORATION
• Traditional exploration was rationalist – travelling where we wanted in the world, and using whatever technology
and skills were needed to unveil new deposits;
• However, exploration technology and skills have become constrained by many external factors – economic,
environmental, socio-political etc;
• We need to turn these constraints into opportunities – these are new exploration search spaces so important
exploration opportunities;
• Diverse teams and a scenario mindset are required to learn about and adapt to these new search spaces;
• Technology and skills can be used to improve industry reputation and open up new search spaces, by helping
discover and develop deposits that are economically, environmentally and socially viable;
• Future explorers (BIG explorers) will be the first contact with communities, securing social licence;
• Future explorers (BIG explorers) will act as technological hot houses attracting the best talent to the industry;
and acting as a ladder for economic and social elevation;
• However, the mining industry remains collectively vulnerable to ‘broken promises’ which affect everyone’s
reputation – even the best, BIG explorers;
• As such we need to transform the whole exploration industry, so that everyone explores in a ‘BIG’ way, and the
whole search space (or transactional environment) increases – TRANSFORMATIONAL exploration.
6 Sept 2016

PRESENTATION FUNDED BY:
6 Sept 2016
www.thinkercafe.orgwww.cet.edu.au www.uwa.edu.au
Slide 28 of 32

THANK YOU
CONTACT DETAILS
John P. Sykes: john.sykes@research.uwa.edu.au
Allan Trench: allan.trench@uwa.edu.au
T. Campbell McCuaig: campbell.mccuaig@uwa.edu.au
Tim Craske: timcraske50@gmail.com
Joe Dwyer: j.dwyer@hiseis.com
Naren Subramaniam: naren.subramaniam@googlemail.com
Siobhan Sullivan: siobhan.t.sullivan@research.uwa.edu.au
Will Turner: william.ja.turner@gmail.com
AusIMM New Zealand Branch Conference
Wellington, New Zealand: 4-6 September 2016

SCENARIOS TEAM
6 Sept 2016
Team photo courtesy of Will Turner
Slide 30 of 32

SCENARIOS TEAM
Investigators
• John Sykes: Centre for Exploration Targeting (CET),
University of Western Australia (UWA)
• Allan Trench: Business School / CET, UWA
• Campbell McCuaig: BHP Billiton / CET, UWA
Participants
• Aida Carneiro: Mining Engineering, UWA
• Aaron Colleran: Evolution Mining
• Tim Craske: Geowisdom
• Liz Dallimore: KPMG
• Deon deBruin: Diamond Indicator Minerals
• Edoaldo Di Dio: Calibre Projects
• Joe Dwyer: HiSeis
• Chris Gonzalez: CET, UWA
• Paul Hodkiewicz: Anglo American
• Amy Imbergamo: Environmental Science, UWA
• Heta Lampinen: CET, UWA
• Sandra Occhipinti: CET, UWA
• Narendran Subramaniam: Transmin / Business
School, UWA
• Siobhan Sullivan: Plant Biology, UWA / Botanic
Gardens & Parks Authority of Western Australia
• Daniel Sully: Teck
• Marcus Tomkinson: MMG
• Will Turner: Independent Geological Consultant
• Stanislav Ulrich: AngloGold Ashanti
• Wenchao Wan: Chemical Engineering, UWA
Guest speakers
• David Groves: CET, UWA
• Martin Lynch: Author “Mining in World History”
• John Southalan: Law School, UWA
• Jessica Volich: BHP Billiton
6 Sept 2016

REFERENCES
This presentation
• Sykes, J.P., & Trench, A., 2016, Strictly Boardroom: The light and dark side of education and technology, MiningNewsPremium.net, 4 July:
http://www.miningnews.net/insight/strictly-boardroom/the-light-and-dark-side-of-education-and-technology/
• Sykes, J.P., Trench, A., McCuaig, T.C., Dwyer, J., Subramaniam, N., Sullivan, S.T.M., & Turner, W., 2016, Transforming the future of minerals
exploration, AusIMM New Zealand Branch Conference, Wellington, 4-6 September.
Other relevant references
• Andrews, T., Harman, J., Horgan, M., & Volich, J., 2016, ‘Future licence to prosper’ key to unlock mining sustainability, CET News and Events, 19 February: http://www.cet.edu.au/news-and-media/news/news-
details/2016/02/19/future-licence-to-prosper-key-to-unlock-mining-sustainability
• Kahane, A., 2012a, Transformative scenario planning: changing the future by exploring alternatives, Strategy & Leadership, 40 (5), pp 19-23.
• Kahane, A., 2012b, Transformative scenario planning: working together to change the future. 168p, Berrett-Koehler Publishers, Oakland, CA.
• Ramirez, R., & Van der Heijden, K., 2007, Scenarios to develop strategic options: a new interactive role for scenarios in strategy. In: Scenarios for Success, Sharpe, B., & Van der Heijden, K., eds, pp 89-119, John
Wiley & Sons, Chichester, UK.
• Ramirez, R., & Wilkinson, A., 2016, Strategic reframing: the Oxford Scenario Planning Approach. 242p, Oxford University Press, Oxford, UK.
• Trench, A., 2016, Strictly Boardroom: Towards big exploration, MiningNewsPremium.net, 11 January: http://www.miningnews.net/insight/strictly-boardroom/towards-big-exploration/
• Van der Heijden, K., 2005, Scenarios: the art of strategic conversation. 2nd ed. 356p, John Wiley & Sons, Chichester, UK.
Other related work by the authors
• Sykes, J.P., & Trench, A., 2014a, Chapter 14: Finding the copper mine of the 21st century: conceptual exploration targeting for hypothetical copper reserves. In: Special publication 18: Building exploration capacity
for the 21st century, Kelley, K.D., & Golden, H.C., eds, pp 273-300, Society of Economic Geologists, Boulder, CO.
• Sykes, J.P., & Trench, A., 2014b, Resources versus reserves – towards a systems-based understanding of exploration and mine project development and the role of the mining geologist, AusIMM International
Mining Geology Conference, Adelaide, SA, 18-20 August, pp 243-270.
• Sykes, J.P., & Trench, A., 2016, Using scenarios to investigate the long-term future of copper mining and guide exploration targeting strategies, AusIMM International Mine Management Conference, Brisbane,
QLD, 4-6 September, pp 265-289.
• Sykes, J. P., Trench, A., & McCuaig, T.C., 2017, The energy transition: a mining and exploration industry perspective, World Renewable Energy Congress, Perth, WA, 5-9 February, in press.
6 Sept 2016

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