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The Quiet Clean Mining Revolution

Few industries have got the black eye, literally and metaphorically, of mining.

After centuries of environmental effects ranging from toxic emissions to unsightly tailings ponds, acid mine drainage, massive energy consumption and other impacts, mining is slowly cleaning up its act.

Why? Mostly because new clean technologies are increasing industrial efficiencies. They’re lowering mining companies’ power needs. And they’re even helping reduce water requirements, and/or remediating the produced water and mines of years past that are now leaching toxins. And that’s translating into cost savings for mining companies, which are being held increasingly accountable for their environmental impacts and are looking for ways to minimize the expenses of both the production phase of their operations, and reclamation (i.e. the mandated end-of-life cleanup expenses associated with mining in many jurisdictions, now).

In other words, now that it’s starting to be less expensive on net for mining companies to be clean, they’re starting to move in that direction.

Here’s a look at some selected companies at the forefront of new, clean processes in mining today.

New production
Mining project developer American Manganese is preparing to produce electrolytic manganese, used in everything from steel to batteries, from low-grade ore in Arizona.

And it plans to do so at vastly lower costs than the Chinese companies that currently dominate its industry.

How is the company hoping to do so? A lower-power production process intended to use only about six percent of the energy required by the high temperature roasting of conventional electrolytic manganese production. It also plans to produce power onsite from heat exchangers harvesting energy from the production of sulfur dioxide—performed by burning elemental sulfur. And it intends to reduce its water requirements by using precipitation to remove contaminants, with closed-loop water techniques that also involve nanofiltration.

The company also claims its tailings (the output of the process) will be solid and inert, benign enough to be placed right back into the ground with no further processing. No open pool tailing ponds.

Too good to be true? Kachan & Co. just published a report probing the American Manganese process, assessing its potential market impact and what other mining companies might learn from the company.

Toxin remediation and resource recovery
Sister companies BacTech Environmental and REBgold of Toronto, Canada are using a patented biological process to remediate toxins and recover gold, respectively, at a number of sites around the world.

The companies’ BACOX process uses vast amounts of naturally occurring bacteria—which the companies claim are harmless to humans and the environment—in bioreactors to liberate precious and base metals from difficult to treat ores, concentrates and tailings. By providing the bacteria with optimal conditions in closed reactors, BacTech and REBgold say they’re capable of oxidizing sulphides in as little as 5-6 days, as opposed to the many years it normally takes in their natural habitat. The process is also used to free gold and other metals like copper, nickel, zinc, cobalt and molybdenum, according to the company.

The recovery of such valuable materials allows BacTech to offer mine tailing remediation services at no charge to governments, and for REBgold to pursue acquiring and developing economic interests in gold mines, including existing operations in Australia, Tasmania and China.

AMD cleanup
Historically, at the end of production, many mines were abandoned with little environmental consideration. Today, heavy metals remain in tailings piles and in runoff from abandoned mines. Metals such as copper, lead, zinc, and mercury can seep into groundwater. Precipitation percolating through rocks can react with sulfur, forming sulfuric acid and leaching out heavy metals and significantly changing the pH of the water.

Water draining from these tailings piles is referred to as acid mine drainage (AMD). The acidity of the water plus the high metal concentrations can be deadly to animals and plants. Acid mine drainage coats waterways with iron hydroxide, giving impacted bodies of water an orange color.

Streams affected by acid mine drainage (AMD), also known as acid rock drainage (ARD). One of the most visible, but certainly not the only, toxin escaping from abandoned and production mining sites. Arsenic is another large problem.

BioteQ Environmental Technologies of Vancouver, Canada is one of a handful of companies specializing in remediation of AMD. It has built 14 industrial water treatment plants ranging in size up to 25,000 m3/day at mine sites in Canada, the U.S., Mexico, Australia, and China. It uses sulfide precipitation processes for metal removal and recovery, as well as lime treatment.

Lime is sometimes criticized for creating solid waste sludge, but it works. Other companies pursue reverse osmosis filtration or other techniques, usually at higher costs and lower rates. Still others attempt to fill in abandoned mines with water, clay slurry or other compounds to eliminate the source of AMD in the first place.

There are scores of new companies forming globally in water treatment, commercially inspired by opportunities associated with the problem of AMD and other mining-related produced water issues. The water-intensive oil sands refining in Northern Canada is also driving important innovation in water technology, as described in a Kachan & Co. report in conjunction with the Artemis Group that introduces corporate executives to the water industry. More details on that report here.

To many, cleantech is still synonymous with renewable energy. But air & environment and clean industry, where clean mining technologies are categorized, remain two important sub-categories of the over-arching cleantech sector. And few industries could benefit from clean technology innovation more than mining. We at Kachan & Co., with offices in Vancouver, Canada—one of the hotbeds of global mining—are encouraged by what we see going on behind the scenes.

After hundreds of years of poor environmental stewardship, and in a world with more watchful eyes than ever, one could argue the mining industry has nowhere to go but up.

This article was originally published here. Reposted by permission.

What cleantech should know about chasm crossing

If there’s really a significant gulf, as onetime marketer Geoffrey Moore put it, between selling to early adopters and the majority of technology buyers, what does this mean for companies in cleantech?

The technology adoption lifecycle and the chasm

The chasm model holds that there’s a big difference between what companies need to do to effectively sell technology products to early adopters and what they need to do to sell to the early and late majority of the technology adoption lifecycle (source: Joe M. Bohlen, George M. Beal and Everett M. Rogers)

 

In the mid-90s, I was a senior consultant at the venerable Silicon Valley strategy consultancy Regis McKenna Inc. (RMI). The firm is credited with innovative marketing and business insights that helped put Intel, Apple, Electronic Arts, Microsoft, 3COM and many other tech companies on the map. It was an important company recognized for doing important work (valley lore holds that founder and author Regis McKenna’s business cards once bore the title “Himself.” If true, it was before my time.)

One of our methodologies, based on the technology adoption lifecycle—itself based on work by Iowa State University tracking the purchasing of seed corn, of all things—became known as the chasm model, which Geoff Moore—then a partner at RMI, now a venture partner at Mohr Davidow—expanded on as the basis of his now-seminal Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. I didn’t overlap at RMI with Geoff. But my office was down the hall from his.

Twenty years later, I still find myself trotting out the same chasm model we used at RMI to help our cleantech clients today understand the non-intuitive changes that need to take place to most effectively introduce their clean technology products to mainstream markets.

Here’s a summary of what we at Kachan & Co. share with clients and how the chasm applies to cleantech.

Technology adoption lifecycle and chasm primer
One of the technology adoption lifecycle’s key insights is that the different constituents of the lifecycle adopt innovation for different reasons. Early adopters are technology enthusiasts looking for a radical shift, where the early majority simply seeks productivity improvement. Early adopters hope to get a jump on competition, lower their costs, get to market faster, have more complete customer service or get some other similar business advantage. Those in the majority of the market, however, want to minimize discontinuity. They want evolution, not revolution. They want technology to enhance, not overthrow, established ways of doing business. And they don’t want to debug someone’s product—they want it to work properly and to integrate with existing technology.

The chasm occurs because the majority of the market wants references from other customers like them, but all that pre-chasm vendors can offer are references to early adopters. Companies trying to cross the chasm run into trouble because they’re essentially operating without a reference base, trying to sell to a market that’s highly reference oriented.

Bridging this gulf is awkward, because if they’re to be successful, companies must adopt new strategies just at the time they’re becoming most comfortable with ones that seem to work.

The only reliable way to exit the chasm is to target a niche market on the other side made up of pragmatists united by a common problem for which there is no known solution. These pragmatists are motivated to help the new technology cross the chasm if it is packaged as a complete solution to their problem.

Moore uses the D Day metaphor for how to do this, and it’s apt. An invasion force, comprised of a company and its allies (the product), must establish an early beachhead niche market (Normandy), from which to take additional market segments (France) with a view to liberating the whole of the market (i.e. Europe). The metaphor argues that an overwhelmingly superior force concentrated on a highly focused target worked in 1944 for the Allies, and is equally relevant in high tech. It argues for laser-focused market segmentation, focusing 100% of a company’s sales and marketing budget on one, initial, small segment if it’s to be successful in the wide majority market.

Why is this counter-intuitive and hard?

  • Niche marketing feels like leaving sales on the table – Companies that are sales-driven and lured into selling to any market segment miss the opportunity to build momentum and authority in their strategically chosen segment
  • Everyone wants to be a big fish, but not in a small pond – Being a market leader is every company’s objective. But no company wants to be known of as king of a small hill. Even though conquering successive small hills leads to mountains.
  • Not all features and benefits may be required – For companies that have invested time and money developing a deep product, focusing on just one small niche and a subset of their features can feel insulting to engineering. Crossing the chasm means making decisions that are best for a narrowly defined customer, not for your product’s bragging rights.

What’s the relevance of all of this to cleantech? Are there chasms to cross? Absolutely. There are plenty of examples of clean technologies and companies to which the chasm metaphor applies, and for which learnings abound… or should:

Chasm crossing done well in cleantech
Some companies and industries appear to be doing things right.

  • Most resource sharing companies (e.g. car and bike sharing, tool sharing, etc.) all seek to be global powerhouses. But most of them, like P2P car sharing companies RelayRides, Spride and Getaround, start hyper-locally, then branch out to neighboring regions. Their segmentation is geographical, leveraging success in one locale to one nearby.
  • Vendors of EV charging, V2G, alternative fuel conversion, fuel additives and other related automotive technologies have appropriately targeted specific commercial vehicle fleets, often in their own backyards, as beachheads, and wisely don’t seek wide consumer adoption. Yet.
  • A123 Systems leveraged an initial modest focus on lithium ion batteries for power tools. The strategy succeeded, and A123 today is now known for its cell and full power solutions for transportation, the grid and commercial applications, and now employs more than 2,000 people worldwide.

At risk in cleantech chasm crossing
There are also companies and sectors in cleantech that would benefit from an understanding of the power of a well-defined target segment as path to the larger market they seek.

In all cases, the companies or sectors below would be best advised to focus more clearly on a specific initial beachhead segment. And then craft a whole product (first introduced by Theodore Levitt in The Marketing Imagination, and co-opted and used ad nauseam by us at RMI and now at Kachan & Co.) to best meet the expectations of that beachhead segment better than any other alternative on the market.

  • Geothermal equipment providers could stand to embrace chasm theory. Still stuck in relatively geeky early adoption, geothermal companies (and not just utility-scale providers like Ormat, U.S. Geothermal and Polaris, but companies with consumer and commercial-grade geothermal equipment like Trane, Carrier and Water Furnace) should focus better on segments for which their proposition is most compelling and target a single, self-referencing industry so as to leverage it to related segments.
  • The tech world is littered with the remains of mobile and stationary fuel cell companies that failed to achieve meaningful commercial traction in any specific segment. Even customers of Bloom Energy, perhaps the highest profile of the lot today, are all over the map: FedEx, Wal-Mart, Staples, Google and eBay. Interestingly, in fuel cells’ quest for widespread market adoption, at least one company now claims to have a volume deal with one of the top battery makers in the world (see description of Tekion, near the bottom of this here) – will it leapfrog past segmentation?
  • Tesla Motors is the poster child of EV startups. Its Roadster was classic early adopter candy. But will the company’s forthcoming Model S sedan allow it to cross the chasm by focusing on a specific market segment? Will Tesla implement all the non-intuitive whole product elements expected by its new, more mainstream customer (including delivery in quantity in reasonable timeframes?) Or will the company mistakenly rely too much on its Roadster experience and early customer resiliency and be relegated to an interesting footnote in the history of transportation?
  • Many still scoff at marine power, but breakthroughs can eventually be expected. Geographic segmentation for marine power makes most sense. Tidal and wave power developers, if they aren’t already, are advised to set up where there’s already critical mass for these technologies at the European Marine Energy Centre in Orkney, Scotland and focus all their work in the North Atlantic, working with Scotland as their narrowly-defined beachhead. It’s impractical to try to do expensive, far-flung installations of unproven marine power equipment away from the critical mass of support infrastructure, as Finavera and PG&E discovered trying to get their wave project in Humboldt County past the CPUC.

The chasm between early adoption and mainstream uptake is a formidable and unforgiving gulf. It typically goes unrecognized. So companies in cleantech are indeed advised to mind the gap.

Which market segments should cleantech vendors seeking mainstream adoption pick over others? In which single, narrowly-defined basket should they place their eggs? Beachhead segmentation is one of the highest-risk, lowest-data decisions a company will ever make. We at Kachan & Co. have developed methodologies to help cleantech companies make these decisions and minimize their risk.

My alum Geoff Moore, in books subsequent to Crossing the Chasm, introduces other metaphors like “bowling alley,” (co-opting one of RMI’s segmentation methodologies), “tornado,” “main street” and others to help businesspeople understand marketing precepts. But it’s the chasm he’ll be best remembered for. Cleantech companies and investors that don’t already own a copy of this book should. Those interested in details of more of the methodologies we used at RMI are encouraged to pick up The Regis Touch—one of Regis’ earlier, now-overlooked but surprisingly still relevant books. The examples in both books are so dated they’re distracting, but the methodologies in both are still sound.

Originally published here. Reproduced by permission.