(Photo courtesy of Lobo Tiggre)

Though Slow to Innovate in the Past, Mining Is Now Ripe for Disruptive Change

Lobo Tiggre has been working as an investment analyst for the past 14 years, focusing primarily on the world of mining in his role at Casey Research.

But after learning the industry from his mentor Doug Casey and developing into a recognized expert, he recently branched out on his own to form Louis James, LLC. The company’s new flagship newsletter, “The Independent Speculator,” builds upon the research and advice he produced for the past decade as the writer of Casey Research’s renowned publication, “International Speculator.”

While he was formerly known by the pen name Louis James — making it a fitting name for the new firm — he is now providing insights under his real name, Lobo Tiggre.

Now, for the benefit of Cognitive Business News readers, he breaks down how the world of mining is changing. While the sector has been a notoriously slow adopter of new technologies in many respects, Tiggre believes it is ready to innovate. “Of all the industries in the world right now, mining might actually be the ripest for disruptive change — and most in need of it,” said Tiggre.

In a conversation with Cognitive Business News Executive Editor Loren Moss, Tiggre discusses the need for innovation, the proliferation of XRF technology, the use of drones, how geological imaging could truly transform operations, and what role artificial intelligence and machine learning may be able to play in mining.

(Photo courtesy of Lobo Tiggre)

(Photo courtesy of Lobo Tiggre)

Loren Moss: What types of changes are happening when it comes to innovation and technological improvements in the mining and extractive sector? What do you see on the horizon in that area?

Lobo Tiggre: My mentor, Doug Casey, is famous for saying that mining is a crappy business. It’s a 19th century industry that’s hated everywhere in the world. And it’s true. It has changed very little over the last 100 years. The diamond drill, which is a main exploration tool for actually finding deposits, hasn’t changed much for decades.

To some degree it’s always going to be unwelcome because it’s an extractive industry. You’re leaving a hole in the ground. No matter how clean the hole is, it’s still a hole on the ground. Some people are never going to accept that.

That said, it is starting to change. Technologically, things are only just beginning to change, but culturally — in terms of corporate goals and values — things have changed a lot in recent decades. It used to be that you could show up, dig holes all over the place, and walk away if you didn’t find anything. You can’t do that anymore — and everybody knows this.

“Of all the industries in the world right now, mining might actually be the ripest for disruptive change — and most in need of it. This is an industry that can and should do much better, both in terms of production and profits as well as environmental and social stewardship.” – Lobo Tiggre of Louis James, LLC.

It’s not just that you have to comply with the new environmental regulations. The miners themselves want to. These are modern people brought up in our times, and they don’t want to see a destroyed planet anymore than anybody else does. The industry has actually changed in spirit before it has changed in terms of technical capabilities, and that actually makes a perfect-storm scenario. Because if nobody wanted to change — if people were still stuck in the way things were done in the past — it would be very difficult to see much innovation.

But the reality is the opposite. The industry wants to innovate. It wants to improve and get better, but the technology has lagged. There haven’t been many new tools for a long time to help the industry do better. As new tools now come on line, it will make a huge impact. There will be very quick adoption. People want this stuff.

Of all the industries in the world right now, mining might actually be the ripest for disruptive change — and most in need of it. This is an industry that can and should do much better, both in terms of production and profits as well as environmental and social stewardship.

To me, this is very exciting. I think there are going to be investment opportunities but also social good. The world will become a better, wealthier place because of the changes that are coming to mining.

Loren Moss: Mining is still a people-intensive business. You still have people suiting up and going underground with lights on their heads. In your travels around the world — as you have covered some of these very large mining companies that have vast resources behind them — what keeps things like robotics from playing a larger role in mining? Why haven’t people built robots that are remote controlled to go in the mines by themselves and drill the holes? If we have drones in the air, why do we still have so many people going underground?

Lobo Tiggre: Capital is the short answer for it. Even the best mine design by the most successful company in the world — with the most thoroughly studied engineering and with everything done to the highest standards — is still a gamble. You never know if you are going to make money on a mine until you actually build it.

Just as an example, one of the biggest gold companies in the world, Goldcorp, built a new world-class mine, with all the newest technology, called Eleonore in Quebec. They got underground and the geometry of the deposit wasn’t what they thought it would be. It turned out to be a little bit more variable. So they had to retool. To be clear, the mine is fine, and it is working now. But that’s an example of the risk all miners face.

And that’s why miners are always trying to invest as little capital as possible upfront. If the mine works, then maybe you have time to upgrade your equipment and use fancy stuff, like robotics. But few people will do it from the start because you never really know if you are going to get your money back when you build a mine — until you do. There is built-in resistance to gambling with large amounts of capital.

That being said, if you have miners killed by rockfalls, that is obviously bad for the mine. If you can use robots to remove that risk, it’s an obvious benefit. This is happening. It has taken its time — and you don’t see it a lot in new mines outside of those operated by very large companies — but this is happening. I have been underground and seen robot drills in action. The person operating the drill is still in the mine in most cases, but he or she is in an armored booth. If  there were a rock fall, the operator would be safe. I am seeing this sort of thing more and more.

Some of the larger mines, where they have the capital, have gone whole hog. They have mines in Australia where the truck drivers are all sitting somewhere in an air-conditioned room in Sydney, and the trucks are all remote controlled. There’s not a person at risk in the pit.

There are other things that are being done, too. Drones are a huge advantage in the mining industry. There are so many operations in areas that would challenge a mountain goat. But if you can map it — and maybe, soon, even sample it — with a drone, you don’t risk a person falling. You can have that drone fly in perfectly straight lines no matter what the topography is, resulting in straighter grids and more accurate results.

Loren Moss: Are there other new technologies that you see as difference makers?

Lobo Tiggre: Another technological innovation that I have seen spreading fast — because it is not so capital intensive — is the use of XRF technology to grade samples in the field. This is a major change.

Historically, your geologist went out, hammered the rock, and sent the sample to the lab. Typically, you waited — weeks or months — to find out if the samples had anything worth follow up. If you thought you had a discovery, you drilled and you sent samples to the lab — and waited weeks or months to find out if the samples had anything worth follow up.

“There is no imaging technology right now that can help you find metal deposits, but this is one of the big disruptions that I think is coming. This will change everything. I think this is the number-one technological revolution that is waiting to happen in the mining sector. Anybody who figures that one out will make billions.” – Lobo Tiggre

Now, you have a handheld XRF gun that will zap your sample with a high-energy x-ray. Then the readout from what bounces back can tell you the chemical composition of your sample. That is huge. Instead of waiting months, you can know a lot within minutes. You can find out where to focus your efforts as you go.

This technology’s effectiveness depends on the mineral. It is not a panacea. But this is a major change, and it’s technologically driven. These guns cost tens of thousands of dollars — but not millions of dollars — so they have proliferated quickly. The effectiveness of exploration increases immediately.

Loren Moss: So this is XRF (x-ray fluorescence), and they now they have self-contained, portable units that you can take with you out in the field?

Lobo Tiggre: Yes. Niton is one of the well-known manufacturers. Even though the technology is called XRF, most people in the field call it a “Niton Gun.” It is literally shaped like an industrial, plastic gun — kind of like a big phaser from the old Star Trek show.

You go out there, you zap the rock, and it tells you what is in it. It is not going to tell you the parts per million, in most cases, but it will give you percents if they’re there. So if you are looking for high-grade copper or nickel, you can know right away if you’ve hit the jackpot.

(Photo courtesy of Lobo Tiggre)

(Photo courtesy of Lobo Tiggre)

Loren Moss: What about being able to use topographical analysis or other data and then analyze it using things like artificial intelligence or machine learning? I know that they do things like this in the petroleum sector in terms of, for example, mapping the ocean floor and then using supercomputers to help determine where resources might be based upon known patterns. Has mining incorporated technologies like this?

Lobo Tiggre: There are some key differences. In oil and gas exploration, there are certain structures in the earth that tend to be fruitful. These are physical structures. If you find one, it can take one hole to both test it and put it into production.

This makes imaging really important in the oil and gas sector. You can send soundwaves through the earth, and the physical structures you’re looking for will reflect them back. You can effectively see through the ground.

In mining, you can’t do that. In most cases, the existence of a structure doesn’t tell you anything useful. The earth’s crust is full of quartz veins, for example, but few have minerals worth the cost of extraction.

There is no imaging technology right now that can help you find metal deposits, but this is one of the big disruptions that I think is coming. This will change everything. It would make exploration more efficient and less impactful on the environment. If you could look into the earth and see something that’s likely to pay — the way the oil and gas guys do — before you even drill, then you can greatly increase your rate of success and reduce your costs.

That technology doesn’t exist yet, but there are people working on it. The XRF gun we talked about can tell you what metals are in a sample, but it can only penetrate a millimeter. Still, it’s a beginning.

I think this is the number-one technological revolution that is waiting to happen in the mining sector: some kind of imaging technology that will look through the earth, not just for structures, but for mineral composition. If anybody has ideas, I’d be all ears. I could probably find investors for that. Anybody who figures that one out will make billions.

Loren Moss: And are there any developments in terms of artificial intelligence innovations?

Lobo Tiggre: That’s starting too. It’s clear to me that there are going to be benefits from smart programs combing large universes of data. That’s what machines do best, right? No human brain could look at such vast amounts of data and compare them in the way that a computer could. Even the most experienced geologist in the world can only hold so much data in his or her mind. So I do see a productive use of AI-type systems in exploration.

That said, exploration has always been an art as well as a science. There is a famous joke amongst mining people: A geophysicist takes his readings and says, “Where do you want the deposit to be?” That’s because it is all subject to interpretation.

“They have mines in Australia where the truck drivers are all sitting somewhere in an air-conditioned room in Sydney, and the trucks are all remote controlled. There’s not a person at risk in the pit.” – Lobo Tiggre

It’s always been a combination of art and science. The best, world-class geologists who make discoveries again and again are not just numbers guys. They don’t just sit there at a desk with computer models and drill according to those models. They all go out in the field, apply boot leather, and get their head into what nature might have done when torturing the rocks in question. I’m skeptical that AI would be able to do this well.

Maybe, over decades of experience, the machines will figure it out. If you remember, there was a recent AI milestone when a computer first beat a human world-champion Go player. That was considered orders of the magnitude harder than programming a chess-playing computer. There was a long time — about 20 years — between when Deep Blue beat chess champ Garry Kasparov and when a computer finally won against the world champion Go player. But then someone programmed a smarter computer that learned to beat the first one at Go — in 30 minutes.

So maybe if you had geological smart systems that learned from success and failure — and you could teach them based upon historical records — they could predict where make discoveries. But there’s only so much historical data. I don’t think it would work to have a computer learn from a million years of simulated data. The system would have to continue to learn from actual exploration results in the real world, and those still take time and money to produce. I don’t know how long this will take. But we are going to find out.

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